COMMERCIAL ASSETS, INC.

                            1998 STOCK INCENTIVE PLAN

Section 1.  General Purpose of Plan; Definitions.

                  The name of this  plan is the  Commercial  Assets,  Inc.  1998
Stock  Incentive  Plan (the "Plan").  The Plan was adopted by the Board on April
21, 1998,  subject to the  approval of the  stockholders  of the Company,  which
approval was obtained on June 30, 1998. The purpose of the Plan is to enable the
Company to attract and retain highly qualified  personnel who will contribute to
the Company's  success by their  ability,  ingenuity and industry and to provide
incentives to the participating officers, directors, employees,  consultants and
advisors  that are linked  directly to increases in  stockholder  value and will
therefore inure to the benefit of all stockholders of the Company.

                  For purposes of the Plan, the following terms shall be defined
as set forth below:

                  (1)  "Administrator"  means the Board, or if and to the extent
the Board does not administer the Plan, the Committee in accordance with Section
2.

                  (2)  "Annual  Non-Employee  Director  Stock  Option"  means an
annual grant of stock options to a non-employee director of the Company pursuant
to Section 5A.

                  (3) "Board" means the Board of Directors of the Company.

                  (4) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.

                  (5) "Committee" means the Compensation  Committee of the Board
or any committee the Board may  subsequently  appoint to administer the Plan. To
the extent  applicable,  the Committee shall be composed entirely of individuals
who meet the  qualifications  referred to in Section 162(m) of the Code and Rule
16b-3 under the Securities  Exchange Act of 1934, as amended.  If at any time or
to any extent the Board shall not administer the Plan, then the functions of the
Board specified in the Plan shall be exercised by the Committee.

                  (6)  "Company"  means  Commercial  Assets,  Inc.,  a  Maryland
corporation (or any successor corporation).

                  (7) "Deferred Stock" means an award made pursuant to Section 7
below of the right to receive Stock at the end of a specified deferral period.

                  (8) "Effective  Date" shall mean the date set forth in Section
11.



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                  (9) "Eligible Recipient" means an officer, director, employee,
consultant or advisor of the Company or any Subsidiary.

                  (10) "Fair Market  Value"  means,  as of any given date,  with
respect to any awards granted  hereunder,  (A) if the Stock is publicly  traded,
the  closing  sale price of the Stock on such date as  reported  in the  Western
Edition of the Wall Street  Journal,  (B) the fair market  value of the Stock as
determined in accordance  with a method  prescribed in the agreement  evidencing
any award  hereunder,  or (C) the fair  market  value of the Stock as  otherwise
determined by the Administrator in the good faith exercise of its discretion.

                  (11) "Incentive  Stock Option" means any Stock Option intended
to be designated as an  "incentive  stock option"  within the meaning of Section
422 of the Code.

                  (12)  "Limited  Stock   Appreciation   Right"  means  a  Stock
Appreciation  Right  that can be  exercised  only in the event of a  "Change  of
Control"  (as  defined  in  Section  13 or as  otherwise  defined  in the  award
agreement evidencing such Limited Stock Appreciation Right).

                  (13) "Non-Qualified  Stock Option" means any Stock Option that
is not an Incentive  Stock Option,  including any Stock Option that provides (as
of the time such option is granted)  that it will not be treated as an Incentive
Stock Option.

                  (14) "Parent  Corporation"  means any  corporation  (other the
Company) in an unbroken chain of corporations  ending with the Company,  if each
of the  corporations in the chain (other than the Company) owns stock possessing
50% or more of the  combined  voting power of all classes of stock in one of the
other corporations in the chain.

                  (15)  "Participant"  means any Eligible  Recipient selected by
the Administrator, pursuant to the Administrator's authority in Section 2 below,
to receive grants of Stock Options,  Stock  Appreciation  Rights,  Limited Stock
Appreciation Rights, Restricted Stock awards, Deferred Stock awards, Performance
Shares or any combination of the foregoing.

                  (16) "Partnership"  means any operating  partnership which may
hereafter be formed by the Company.

                  (17) "Partnership Units" means units of limited partnership of
the Partnership.

                  (18)  "Performance  Share"  means an award of  shares of Stock
pursuant to Section 7 that is subject to restrictions  based upon the attainment
of specified performance objectives.

                  (19)  "Restricted  Stock" means an award  granted  pursuant to
Section 7 of shares of Stock subject to certain restrictions.

                  (20) "Stock" means the Common Stock, par value $.01 per share,
of the Company.

                  (21) "Stock Appreciation Right" means the right pursuant to an
award granted under


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Section 6 to  receive an amount  equal to the  excess,  if any,  of (A) the Fair
Market Value, as of the date such Stock Appreciation Right or portion thereof is
surrendered,  of the  shares  of Stock  covered  by such  right or such  portion
thereof,  over (B) the  aggregate  exercise  price of such right or such portion
thereof.

                  (22) "Stock  Option"  means any option to  purchase  shares of
Stock granted  pursuant to Section 5 or any Annual  Non-Employee  Director Stock
Option granted pursuant to Section 5A.

                  (23)  "Subsidiary"  means  any  corporation  (other  than  the
Company) in an unbroken chain of  corporations  beginning  with the Company,  if
each of the corporations (other than the last corporation) in the unbroken chain
owns stock  possessing  50% or more of the total  combined  voting  power of all
classes of stock in one of the other corporations in the chain.

Section 2.  Administration.

                  The  Plan  shall  be   administered  in  accordance  with  the
requirements of Section 162(m) of the Code (but only to the extent  necessary to
maintain  qualification  of awards  under the Plan under  Section  162(m) of the
Code) and, to the extent  applicable,  Rule 16b-3 under the Securities  Exchange
Act of 1934, as amended ("Rule  16b-3"),  by the Board or by the Committee which
shall be  appointed  by the Board and which shall  serve at the  pleasure of the
Board.

                  Pursuant  to the terms of the Plan,  the  Administrator  shall
have the power and  authority  to grant to Eligible  Recipients  pursuant to the
terms of the Plan: (a) Stock Options,  (b) Stock Appreciation  Rights or Limited
Stock  Appreciation  Rights,  (c) Restricted Stock, (d) Performance  Shares, (e)
Deferred Stock or (f) any combination of the foregoing.

                  In particular, the Administrator shall have the authority:

                           (a) to select those Eligible  Recipients who shall be
Participants;

                           (b) to  determine  whether and to what  extent  Stock
Options,   Stock  Appreciation   Rights,   Limited  Stock  Appreciation  Rights,
Restricted  Stock,  Deferred Stock,  Performance  Shares or a combination of the
foregoing, are to be granted hereunder to Participants;

                           (c) to determine  the number of shares of Stock to be
covered by each such award granted hereunder;

                           (d)  to  determine  the  terms  and  conditions,  not
inconsistent  with  the  terms  of the  Plan,  of any  award  granted  hereunder
(including,  but not limited to, (x) the  restrictions  applicable to Restricted
Stock or Deferred  Stock  awards and the  conditions  under  which  restrictions
applicable to such Restricted  Stock or Deferred Stock shall lapse,  and (y) the
performance  goals and periods  applicable to the award of Performance  Shares);
and

                           (e)  to  determine  the  terms  and  conditions,  not
inconsistent  with  the  terms of the  Plan,  which  shall  govern  all  written
instruments  evidencing the Stock Options,  Stock Appreciation  Rights,  Limited



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Stock Appreciation Rights,  Restricted Stock, Deferred Stock, Performance Shares
or any combination of the foregoing granted hereunder to Participants.

                  The Administrator shall have the authority, in its discretion,
to adopt, alter and repeal such administrative  rules,  guidelines and practices
governing  the Plan as it shall from time to time deem  advisable;  to interpret
the terms and  provisions  of the Plan and any award  issued under the Plan (and
any agreements relating thereto);  and to otherwise supervise the administration
of the Plan.

                  All  decisions  made  by  the  Administrator  pursuant  to the
provisions  of the Plan shall be final,  conclusive  and binding on all persons,
including the Company and the Participants.

Section 3.  Stock Subject to Plan.

                  The number of shares of Stock  reserved  for  issuance  at any
time  pursuant to  outstanding  awards under the Plan shall be limited to 15% of
the sum of (i) the  number  of then  outstanding  shares  of Stock  and (ii) the
number of then outstanding  Partnership Units; provided,  that in no event shall
the total  number of shares of Common Stock  issuable  under the 1998 Stock Plan
exceed 3 million shares of Stock.  The aggregate number of shares of Stock as to
which Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred Stock
and Performance Shares may be granted to any individual during any calendar year
may not,  subject to adjustment as provided in this Section 3, exceed 80% of the
shares of Stock  reserved  for the purposes of the Plan in  accordance  with the
provisions of this Section 3.

                  Consistent  with the provisions of Section 162(m) of the Code,
as from time to time  applicable,  to the extent that (i) a Stock Option expires
or is otherwise terminated without being exercised,  or (ii) any shares of Stock
subject to any  Restricted  Stock,  Deferred  Stock or  Performance  Share award
granted  hereunder  are  forfeited,  such shares  shall again be  available  for
issuance in connection with future awards under the Plan. If any shares of Stock
have been pledged as collateral  for  indebtedness  incurred by a Participant in
connection  with the  exercise of a Stock Option and such shares are returned to
the Company in  satisfaction  of such  indebtedness,  such shares shall again be
available for issuance in connection with future awards under the Plan.

                  In the  event of any  merger,  reorganization,  consolidation,
recapitalization,   stock  dividend  or  other  change  in  corporate  structure
affecting  the Stock,  a  substitution  or  adjustment  shall be made in (i) the
aggregate  number of shares reserved for issuance under the Plan, (ii) the kind,
number and option price of shares subject to outstanding  Stock Options  granted
under the Plan, and (iii) the kind, number and purchase price of shares issuable
pursuant to awards of Restricted Stock,  Deferred Stock and Performance  Shares,
in each case as may be determined by the Administrator,  in its sole discretion.
Such other  substitutions  or adjustments  shall be made as may be determined by
the Administrator,  in its sole discretion.  An adjusted option price shall also
be used to determine the amount  payable by the Company upon the exercise of any
Stock  Appreciation  Right or Limited  Stock  Appreciation  Right related to any
Stock Option.  In connection  with any event  described in this  paragraph,  the
Administrator  may  provide,  in its  discretion,  for the  cancellation  of any
outstanding awards and payment in cash or other property therefor.



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Section 4.  Eligibility.

                  Officers,  directors  and  employees  of  the  Company  or any
Subsidiary,  and consultants and advisors to the Company or any Subsidiary,  who
are responsible for or are in a position to contribute to the management, growth
and/or  profitability  of the  business of the  Company  shall be eligible to be
granted Stock Options,  Stock  Appreciation  Rights,  Limited Stock Appreciation
Rights,  Restricted  Stock awards,  Deferred Stock awards or Performance  Shares
hereunder.  The Participants  under the Plan shall be selected from time to time
by the Administrator, in its sole discretion, from among the Eligible Recipients
recommended by the senior management of the Company, and the Administrator shall
determine, in its sole discretion, the number of shares of Stock covered by each
award.

Section 5.  Discretionary Grants of Stock Options.

                  Stock  Options  may be granted  alone or in  addition to other
awards  granted under the Plan. Any Stock Option granted under the Plan shall be
in such  form as the  Administrator  may  from  time  to time  approve,  and the
provisions  of Stock  Option  awards  need not be the same with  respect to each
optionee.  Recipients of Stock Options shall enter into an award  agreement with
the Company, in such form as the Administrator shall determine,  which agreement
shall set forth,  among other things, the exercise price of the option, the term
of the option and  provisions  regarding  exercisability  of the option  granted
thereunder.

                  The Stock Options  granted under the Plan may be of two types:
(i) Incentive Stock Options and (ii) Non-Qualified Stock Options.

                  The  Administrator  shall  have the  authority  to  grant  any
officer or employee of the Company (including directors who are also officers of
the Company) Incentive Stock Options,  NonQualified Stock Options, or both types
of Stock  Options  (in each case with or without  Stock  Appreciation  Rights or
Limited  Stock  Appreciation  Rights).  Directors  who are not  officers  of the
Company,  consultants  and  advisors  may only be  granted  Non-Qualified  Stock
Options (with or without Stock Appreciation Rights or Limited Stock Appreciation
Rights).  To the extent that any Stock  Option does not qualify as an  Incentive
Stock Option,  it shall constitute a separate  NonQualified  Stock Option.  More
than  one  option  may  be  granted  to the  same  optionee  and be  outstanding
concurrently hereunder.

                  Stock  Options  granted under the Plan shall be subject to the
following  terms and  conditions  and shall  contain such  additional  terms and
conditions,  not inconsistent  with the terms of the Plan, as the  Administrator
shall deem desirable:

                  (1)  Option  Price.  The  option  price  per  share  of  Stock
purchasable under a Stock Option shall be determined by the Administrator in its
sole  discretion  at the time of grant but shall not,  in the case of  Incentive
Stock  Options,  be less than 100% of the Fair Market Value of the Stock on such
date and shall  not,  in any  event,  be less than the par value (if any) of the
Stock.  If an  employee  owns or is deemed to own (by reason of the  attribution
rules applicable under Section 424(d) of the Code) more than 10% of the combined
voting  power of all classes of stock of the  Company or any Parent  Corporation

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and an Incentive  Stock Option is granted to such employee,  the option price of
such Incentive  Stock Option (to the extent  required by the Code at the time of
grant)  shall be no less than 110% of the Fair Market  Value of the Stock on the
date such Incentive Stock Option is granted.

                  (2) Option Term.  The term of each Stock Option shall be fixed
by the  Administrator,  but no Stock Option shall be  exercisable  more than ten
years after the date such Stock Option is granted; provided, however, that if an
employee owns or is deemed to own (by reason of the attribution rules of Section
424(d) of the Code) more than 10% of the combined voting power of all classes of
stock of the Company or any Parent  Corporation and an Incentive Stock Option is
granted to such employee, the term of such Incentive Stock Option (to the extent
required by the Code at the time of grant) shall be no more than five years from
the date of grant.

                  (3) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the  Administrator  at or after grant.  The  Administrator  may provide,  in its
discretion, that any Stock Option shall be exercisable only in installments, and
the Administrator may waive such installment  exercise provisions at any time in
whole or in part based on such factors as the  Administrator  may determine,  in
its sole discretion.

                  (4) Method of Exercise.  Subject to Section 5(3) above,  Stock
Options  may be  exercised  in whole or in part at any time  during  the  option
period,  by giving  written  notice of exercise to the  Company  specifying  the
number of shares to be purchased, accompanied by payment in full of the purchase
price  in  cash  or its  equivalent,  as  determined  by the  Administrator.  As
determined by the Administrator,  in its sole discretion, payment in whole or in
part may also be made (i) by means of any cashless exercise  procedure  approved
by the  Administrator,  (ii) in the form of unrestricted  Stock already owned by
the  optionee  or (iii)  in the case of the  exercise  of a  NonQualified  Stock
Option,  in the form of Restricted  Stock or  Performance  Shares  subject to an
award hereunder  (based,  in each case, on the Fair Market Value of the Stock on
the date the option is  exercised);  provided,  however,  that in the case of an
Incentive  Stock Option,  the right to make payment in the form of already owned
shares  may be  authorized  only at the time of grant.  If payment of the option
exercise  price of a  Non-Qualified  Stock Option is made in whole or in part in
the form of Restricted Stock or Performance Shares, the shares received upon the
exercise  of such  Stock  Option  shall be  restricted  in  accordance  with the
original terms of the Restricted  Stock or Performance  Share award in question,
except that the Administrator may direct that such restrictions shall apply only
to that  number of shares  equal to the  number of shares  surrendered  upon the
exercise  of such  option.  An  optionee  shall  generally  have the  rights  to
dividends  and any  other  rights of a  stockholder  with  respect  to the Stock
subject to the Stock Option only after the optionee has given written  notice of
exercise,  has paid in full for such shares,  and, if  requested,  has given the
representation described in paragraph (1) of Section 10.

                  The Administrator  may require the voluntary  surrender of all
or a portion of any Stock Option granted under the Plan as a condition precedent
to the grant of a new Stock Option.  Subject to the provisions of the Plan, such
new Stock Option shall be  exercisable  at the price,  during such period and on
such other terms and  conditions  as are specified by the  Administrator  at the

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time the new Stock Option is granted.  Consistent with the provisions of Section
162(m), to the extent applicable,  upon their surrender,  Stock Options shall be
canceled and the shares previously  subject to such canceled Stock Options shall
again be available for grants of Stock Options and other awards hereunder.

                  (5)  Loans.  The  Company  may make loans  available  to Stock
Option holders in connection  with the exercise of outstanding  options  granted
under the Plan, as the  Administrator,  in its discretion,  may determine.  Such
loans shall (i) be  evidenced  by  promissory  notes  entered  into by the Stock
Option  holders  in favor of the  Company,  (ii) be  subject  to the  terms  and
conditions  set forth in this Section 5(5) and such other terms and  conditions,
not inconsistent with the Plan, as the Administrator shall determine, (iii) bear
interest, if any, at such rate as the Administrator shall determine, and (iv) be
subject to Board approval (or to approval by the Administrator to the extent the
Board may delegate such authority).  In no event may the principal amount of any
such loan exceed the sum of (x) the  exercise  price less the par value (if any)
of the shares of Stock covered by the option,  or portion thereof,  exercised by
the holder,  and (y) any federal,  state,  and local income tax  attributable to
such  exercise.  The  initial  term of the loan,  the  schedule  of  payments of
principal  and  interest  under the loan,  the extent to which the loan is to be
with or without  recourse  against  the holder  with  respect  to  principal  or
interest and the conditions upon which the loan will become payable in the event
of  the  holder's   termination  of  employment   shall  be  determined  by  the
Administrator.  Unless the Administrator  determines  otherwise,  when a loan is
made, shares of Stock having a Fair Market Value at least equal to the principal
amount of the loan shall be pledged by the holder to the Company as security for
payment of the unpaid balance of the loan, and such pledge shall be evidenced by
a pledge agreement, the terms of which shall be determined by the Administrator,
in its  discretion;  provided,  however,  that each loan shall  comply  with all
applicable laws,  regulations and rules of the Board of Governors of the Federal
Reserve System and any other governmental agency having jurisdiction.

                  (6)  Transferability  of  Options.   Stock  Options  shall  be
transferable by the optionee, and all Stock Options shall be exercisable, during
the optionee's lifetime, only by the optionee or such transferee; provided, that
the   Administrator   may,   in   its   sole   discretion,   provide   for   the
non-transferability  of Stock  Options  under such terms and  conditions  as the
Administrator  shall  determine and set forth in the agreement  evidencing  such
award.  Notwithstanding the foregoing, except to the extent permitted by Section
422 of the Code,  no Stock  Option  intended  to qualify as an  Incentive  Stock
Option shall be transferable by the optionee.

                  (7)  Termination  of Employment  or Service.  If an optionee's
employment or service as a director,  consultant or advisor terminates by reason
of death, disability or for any other reason, the Stock Option may thereafter be
exercised  to the extent  provided  in the  applicable  award  agreement,  or as
otherwise determined by the Administrator.

                  (8) Annual Limit on  Incentive  Stock  Options.  To the extent
that the aggregate  Fair Market Value  (determined  as of the date the Incentive
Stock  Option is  granted)  of shares of Stock with  respect to which  Incentive
Stock Options  granted to an Optionee under this Plan and all other option plans
of the Company or its Parent  Corporation  become exercisable for the first time
by the Optionee  during any calendar year exceeds  $100,000,  such Stock Options
shall be treated as NonQualified Stock Options.


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Section 5A.  Annual Non-Employee Director Stock Option Grants

                  Immediately  following  each annual  meeting of the  Company's
stockholders, each then non-employee director of the Company shall automatically
be granted a  Non-Qualified  Stock Option to purchase  7,500 shares of Stock (an
"Annual  Non-Employee  Director Stock Option").  The terms and conditions of the
Annual  Non-Employee  Director Stock Options granted pursuant to this Section 5A
shall be as follows:

                  (1)  Option  Term.  The term of the  option  shall be ten (10)
years from the date of grant.

                  (2)  Exercise  Price.  The  exercise  price per share of Stock
subject to such option  shall be 100% of the Fair  Market  Value of the Stock on
the date of grant.

                  (3)  Vesting  and  Exercisability.  The  option  shall be 100%
vested and exercisable as of the date of grant.

                  (4)  Transferability.  The  option  shall be  transferable  as
provided in Section 5(6).

                  (5)  Payment of  Exercise  Price.  The  exercise  price of the
option  shall  be  paid  in  cash  or  its   equivalent  as  determined  by  the
Administrator.

                  (6) Termination of Service.  Following  termination of service
as a director for any reason,  the option shall be  exercisable as determined by
the Administrator at or after grant.

Section 5B.  Stock Grants to Non-Employee Directors in Lieu of Meeting Fees

                  Each non-employee director of the Company may elect to receive
all or any portion of any Meeting Fees in shares of Stock.  "Meeting Fees" shall
mean all annual  retainers and other fees payable for attendance at each regular
or special  meeting of the Board or any  committees  attended by a  non-employee
director.  The number of shares of Stock issuable  pursuant to any such election
shall be  determined  based on (i) the  amount of Meeting  Fees  subject to such
election and (ii) the Fair Market Value of the Stock as of the date of grant. If
no such election is timely received by the Company,  such director shall receive
any Meeting Fees in cash.

Section 6.  Stock Appreciation Rights and Limited Stock Appreciation Rights.

                  (1) Grant and Exercise.  Stock Appreciation Rights and Limited
Stock  Appreciation  Rights may be granted either alone ("Free Standing Rights")
or in  conjunction  with all or part of any Stock Option  granted under the Plan
("Related Rights"). In the case of a Non-Qualified Stock Option,  Related Rights
may be granted either at or after the time of the grant of such Stock Option. In
the case of an Incentive Stock Option, Related Rights may be granted only at the
time of the grant of the Incentive Stock Option.

                  A Related  Right or  applicable  portion  thereof  granted  in

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conjunction  with  a  given  Stock  Option  shall  terminate  and no  longer  be
exercisable upon the termination or exercise of the related Stock Option, except
that,  unless  otherwise  provided by the  Administrator at the time of grant, a
Related  Right  granted  with  respect  to less  than the full  number of shares
covered  by a related  Stock  Option  shall only be reduced if and to the extent
that the number of shares  covered by the exercise or termination of the related
Stock Option exceeds the number of shares not covered by the Related Right.

                  A Related Right may be exercised by an optionee, in accordance
with paragraph (2) of this Section 6, by surrendering the applicable  portion of
the related Stock Option.  Upon such exercise and surrender,  the optionee shall
be  entitled  to  receive  an amount  determined  in the  manner  prescribed  in
paragraph (2) of this Section 6. Stock  Options which have been so  surrendered,
in whole or in part,  shall no longer be  exercisable  to the extent the Related
Rights have been so exercised.

                  (2) Terms and Conditions.  Stock Appreciation  Rights shall be
subject to such terms and conditions,  not  inconsistent  with the provisions of
the  Plan,  as  shall  be  determined  from  time to time by the  Administrator,
including the following:

                           (a) Stock Appreciation Rights that are Related Rights
("Related Stock Appreciation  Rights") shall be exercisable only at such time or
times and to the extent  that the Stock  Options to which they  relate  shall be
exercisable in accordance with the provisions of Section 5 and this Section 6 of
the Plan.

                           (b) Upon the exercise of a Related Stock Appreciation
Right,  an optionee  shall be  entitled to receive up to, but not more than,  an
amount in cash or that number of shares of Stock (or in some combination of cash
and shares of Stock)  equal in value to the excess of the Fair  Market  Value of
one share of Stock as of the date of  exercise  over the option  price per share
specified  in the related  Stock  Option  multiplied  by the number of shares of
Stock  in  respect  of  which  the  Related  Stock  Appreciation  Right is being
exercised,  with the  Administrator  having the right to  determine  the form of
payment.

                           (c)  Related  Stock  Appreciation   Rights  shall  be
transferable  only when and to the extent that the underlying Stock Option would
be transferable under paragraph (6) of Section 5 of the Plan.

                           (d) Upon the exercise of a Related Stock Appreciation
Right, the Stock Option or part thereof to which such Related Stock Appreciation
Right is related  shall be deemed to have been  exercised for the purpose of the
limitation  set forth in  Section 3 of the Plan on the number of shares of Stock
to be  issued  under the Plan,  but only to the  extent of the  number of shares
issued under the Related Stock Appreciation Right.

                           (e) A Related  Stock  Appreciation  Right  granted in
connection  with an Incentive Stock Option may be exercised only if and when the
Fair Market Value of the Stock subject to the Incentive Stock Option exceeds the
exercise price of such Stock Option.



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                           (f) Stock Appreciation  Rights that are Free Standing
Rights ("Free Standing Stock Appreciation  Rights") shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Administrator at or after grant.

                           (g) The term of each Free Standing Stock Appreciation
Right  shall  be  fixed  by  the  Administrator,  but  no  Free  Standing  Stock
Appreciation  Right shall be exercisable more than ten years after the date such
right is granted.

                           (h)  Upon  the  exercise  of a  Free  Standing  Stock
Appreciation Right, a recipient shall be entitled to receive up to, but not more
than, an amount in cash or that number of shares of Stock (or any combination of
cash or shares of Stock)  equal in value to the excess of the Fair Market  Value
of one  share of  Stock as of the date of  exercise  over the  price  per  share
specified in the Free Standing Stock Appreciation Right (which price shall be no
less  than  100% of the Fair  Market  Value of the  Stock on the date of  grant)
multiplied  by the  number of shares of Stock in  respect  of which the right is
being exercised,  with the Administrator  having the right to determine the form
of payment.

                           (i) Free Standing Stock Appreciation  Rights shall be
transferable  only  when  and to  the  extent  that  a  Stock  Option  would  be
transferable under paragraph (6) of Section 5 of the Plan.

                           (j) In the event of the  termination of employment or
service of a Participant  who has been granted one or more Free  Standing  Stock
Appreciation  Rights, such rights shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Administrator
at or after grant.

                           (k)  Limited  Stock  Appreciation  Rights may only be
exercised  within the 30-day period following a "Change of Control" (as defined
in  Section  13 or as  otherwise  defined  by the  Administrator  in  the  award
agreement evidencing such Limited Stock Appreciation Right) and, with respect to
Limited Stock  Appreciation  Rights that are Related  Rights  ("Related  Limited
Stock Appreciation Rights"),  only to the extent that the Stock Options to which
they relate shall be exercisable in accordance  with the provisions of Section 5
and this Section 6 of the Plan.

                           (l) Upon the exercise of a Limited Stock Appreciation
Right,  the  recipient  shall be  entitled to receive an amount in cash equal in
value to the  excess  of the  "Change  of  Control  Price"  (as  defined  in the
agreement  evidencing  such Limited  Stock  Appreciation  Right) of one share of
Stock as of the date of exercise  over (A) the option price per share  specified
in the related Stock Option, or (B) in the case of a Limited Stock  Appreciation
Right which is a Free Standing  Stock  Appreciation  Right,  the price per share
specified  in the Free  Standing  Stock  Appreciation  Right,  such excess to be
multiplied  by the  number of  shares in  respect  of which  the  Limited  Stock
Appreciation Right shall have been exercised.



<PAGE>



Section 7.  Restricted Stock, Deferred Stock and Performance Shares.

                  (1) General.  Restricted Stock,  Deferred Stock or Performance
Share awards may be issued  either alone or in addition to other awards  granted
under the Plan. The  Administrator  shall  determine the Eligible  Recipients to
whom, and the time or times at which, grants of Restricted Stock, Deferred Stock
or  Performance  Share awards shall be made; the number of shares to be awarded;
the price,  if any, to be paid by the  recipient of Restricted  Stock,  Deferred
Stock or  Performance  Share  awards;  the  Restricted  Period  (as  defined  in
paragraph  (3) of this Section 7)  applicable  to  Restricted  Stock or Deferred
Stock  awards;  the  performance  objectives  applicable  to  Restricted  Stock,
Performance  Share  or  Deferred  Stock  awards;  the  date or  dates  on  which
restrictions  applicable to such Restricted Stock or Deferred Stock awards shall
lapse during such Restricted  Period; and all other conditions of the Restricted
Stock, Deferred Stock and Performance Share awards.  Subject to the requirements
of  Section  162(m) of the  Code,  as  applicable,  the  Administrator  may also
condition the grant of Restricted  Stock,  Deferred  Stock awards or Performance
Shares upon the exercise of Stock  Options,  or upon such other  criteria as the
Administrator  may  determine,  in  its  sole  discretion.   The  provisions  of
Restricted  Stock,  Deferred Stock or  Performance  Share awards need not be the
same with respect to each  recipient.  In the  discretion of the  Administrator,
loans may be made to  Participants in connection with the purchase of Restricted
Stock under  substantially  the same terms and conditions as provided in Section
5(5) with respect to the exercise of stock options.

                  (2) Awards and  Certificates.  The prospective  recipient of a
Restricted  Stock,  Deferred Stock or Performance Share award shall not have any
rights with respect to such award,  unless and until such recipient has executed
an  agreement  evidencing  the  award (a  "Restricted  Stock  Award  Agreement,"
"Deferred  Stock Award  Agreement" or  "Performance  Share Award  Agreement," as
appropriate) and delivered a fully executed copy thereof to the Company,  within
a period of sixty days (or such other period as the  Administrator  may specify)
after the award date.  Except as otherwise  provided below in this Section 7(2),
(i) each Participant who is awarded Restricted Stock or Performance Shares shall
be issued a stock  certificate in respect of such shares of Restricted  Stock or
Performance Shares; and (ii) such certificate shall be registered in the name of
the  Participant,  and shall bear an appropriate  legend referring to the terms,
conditions, and restrictions applicable to such award.

                  The Company may require that the stock certificates evidencing
Restricted Stock or Performance Share awards hereunder be held in the custody of
the Company until the  restrictions  thereon  shall have lapsed,  and that, as a
condition  of any  Restricted  Stock  award  or  Performance  Share  award,  the
Participant shall have delivered a stock power,  endorsed in blank,  relating to
the Stock covered by such award.

                  With respect to Deferred  Stock awards,  at the  expiration of
the Restricted Period,  stock certificates in respect of such shares of Deferred
Stock shall be delivered to the participant,  or his legal representative,  in a
number  equal to the  number of shares of Stock  covered by the  Deferred  Stock
award.

                  (3)   Restrictions  and  Conditions.  The   Restricted  Stock,

<PAGE>

Deferred Stock and Performance  Share awards granted  pursuant to this Section 7
shall be subject to the following restrictions and conditions:

                           (a) Subject to the  provisions  of the Plan,  and the
Restricted Stock Award Agreement,  Deferred Stock Award Agreement or Performance
Share Award Agreement, as appropriate,  governing such award, during such period
as may be set by the Administrator commencing on the grant date (the "Restricted
Period"),  the Participant shall not be permitted to sell,  transfer,  pledge or
assign shares of Restricted Stock,  Performance Shares or Deferred Stock awarded
under the Plan;  provided,  however,  that the  Administrator  may,  in its sole
discretion,  provide  for the  lapse  of such  restrictions  (other  than  those
pursuant to any  stockholders  agreement) in installments  and may accelerate or
waive  such  restrictions  in whole or in part  based on such  factors  and such
circumstances  as the  Administrator  may  determine,  in its  sole  discretion,
including,  but not limited to, the  attainment of certain  performance  related
goals or the  Participant's  termination  of  employment  or  service,  death or
disability.

                           (b) Except as  provided in  paragraph  (3)(a) of this
Section 7, the  Participant  shall generally have, with respect to the shares of
Restricted Stock or Performance  Shares, all of the rights of a stockholder with
respect to such stock  during  the  Restricted  Period.  The  Participant  shall
generally not have the rights of a stockholder  with respect to stock subject to
Deferred  Stock awards during the Restricted  Period;  provided,  however,  that
dividends  declared  during the Restricted  Period with respect to the number of
shares  covered  by a Deferred  Stock  award  shall be paid to the  Participant.
Certificates  for  shares  of  unrestricted  Stock  shall  be  delivered  to the
Participant  promptly after, and only after, the Restricted  Period shall expire
without  forfeiture in respect of such shares of Restricted  Stock,  Performance
Shares or Deferred Stock,  except as the Administrator,  in its sole discretion,
shall otherwise determine.

                           (c)  The  rights  of  holders  of  Restricted  Stock,
Deferred Stock and  Performance  Share awards upon  termination of employment or
service for any reason  during the  Restricted  Period shall be set forth in the
Restricted Stock Award Agreement,  Deferred Stock Award Agreement or Performance
Share Award Agreement, as appropriate, governing such awards.

                           (d) With  respect to awards  intended  to  constitute
"qualified  performance based compensation for purposes of Section 162(m) of the
Code, the applicable  performance goals shall be based on funds from operations,
adjusted funds from operations, net income and stock price performance.

Section 8.  Amendment and Termination.

                  The Board may amend,  alter or  discontinue  the Plan,  but no
amendment,  alteration,  or discontinuation  shall be made that would impair the
rights of a  Participant  under  any  award  theretofore  granted  without  such
Participant's  consent,  or that,  without the approval of the  stockholders (as
described below), would:

                  (1) except as provided in Section 3, increase the total number
of shares of Stock reserved for the purpose of the Plan;

<PAGE>


                  (2)  change  the  class  of  directors,  officers,  employees,
consultants and advisors eligible to participate in the Plan; or

                  (3)  extend  the maximum option period  under paragraph (2) of
Section 5 of the Plan.

                  Notwithstanding the foregoing, stockholder approval under this
Section 8 shall only be  required at such time and under such  circumstances  as
stockholder approval would be required under Section 162(m) of the Code or other
applicable law, rule or regulation with respect to any material amendment to any
employee benefit plan of the Company.

                  The Administrator may amend the terms of any award theretofore
granted,  prospectively  or  retroactively,  but, subject to Section 3 above, no
such amendment shall impair the rights of any holder without his or her consent.

Section 9.  Unfunded Status of Plan.

                  The Plan is  intended to  constitute  an  "unfunded"  plan for
incentive  compensation.  With  respect  to  any  payments  not  yet  made  to a
Participant  by the  Company,  nothing  contained  herein  shall  give  any such
Participant any rights that are greater than those of a general  creditor of the
Company.

Section 10.  General Provisions.

                  (1) The  Administrator  may  require  each  person  purchasing
shares pursuant to a Stock Option or otherwise  acquiring  shares under the Plan
to  represent  to and agree  with the  Company in  writing  that such  person is
acquiring the shares without a view to distribution  thereof.  The  certificates
for such shares may include any legend which the Administrator deems appropriate
to reflect any restrictions on transfer.

                  All  certificates for shares of Stock delivered under the Plan
shall be subject to such  stock-transfer  orders and other  restrictions  as the
Administrator  may deem  advisable  under  the  rules,  regulations,  and  other
requirements of the Securities and Exchange Commission,  any stock exchange upon
which the Stock is then listed,  and any applicable  federal or state securities
law,  and the  Administrator  may cause a legend or  legends to be placed on any
such certificates to make appropriate reference to such restrictions.

                  (2) Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation  arrangements,  subject to stockholder
approval,  if such  approval is required;  and such  arrangements  may be either
generally  applicable or applicable only in specific cases.  The adoption of the
Plan  shall not confer  upon any  officer,  director,  employee,  consultant  or
advisor of the Company any right to  continued  employment  or service  with the
Company, as the case may be, nor shall it interfere in any way with the right of
the  Company to  terminate  the  employment  or service of any of its  officers,
directors, employees, consultants or advisors at any time.

                  (3) Each Participant shall, no later than the date as of which

<PAGE>

the  value of an award  first  becomes  includible  in the  gross  income of the
Participant  for  federal  income  tax  purposes,  pay to the  Company,  or make
arrangements  satisfactory  to  the  Administrator  regarding  payment  of,  any
federal,  state,  or local taxes of any kind required by law to be withheld with
respect to the award.  The  obligations  of the Company  under the Plan shall be
conditional  on the making of such  payments  or  arrangements,  and the Company
shall,  to the extent  permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Participant.

                  (4) No  member  of the  Board  or the  Administrator,  nor any
officer  or  employee  of the  Company  acting  on  behalf  of the  Board or the
Administrator,  shall be  personally  liable for any action,  determination,  or
interpretation  taken or made in good  faith with  respect to the Plan,  and all
members of the Board or the  Administrator  and each and any officer or employee
of the Company acting on their behalf shall, to the extent  permitted by law, be
fully  indemnified  and  protected by the Company in respect of any such action,
determination or interpretation.

Section 11.  Effective Date of Plan.

                  The Plan became  effective (the "Effective  Date") on June 30,
1998, the date the Company's stockholders formally approved the Plan.

Section 12.  Term of Plan.

                  No Stock  Option,  Stock  Appreciation  Right,  Limited  Stock
Appreciation Right,  Restricted Stock, Deferred Stock or Performance Share award
shall be granted  pursuant to the Plan on or after the tenth  anniversary of the
Effective Date, but awards theretofore granted may extend beyond that date.

Section 13.  Change of Control

                  Except as otherwise  determined  by the  Administrator  in its
sole discretion,  the exercisability and vesting of all awards granted under the
Plan shall be accelerated upon the occurrence of a Change of Control.

                  For purposes of the Plan,  except as otherwise  determined  by
the  Administrator  in its sole  discretion,  "Change of Control" shall mean the
occurrence of any of the following events:

                  (1) An  acquisition  (other than directly from the Company) of
         any voting  securities  of the  Company  ("Voting  Securities")  by any
         "person" (as used for purposes of Section 13(d) or Section 14(d) of the
         Securities  Exchange  Act of 1934,  as amended  (the  "Exchange  Act"))
         immediately after which such person has "beneficial  ownership" (within
         the  meaning  of  Rule  13d-3   promulgated  under  the  Exchange  Act)
         ("Beneficial Ownership") of 20% or more of the combined voting power of
         the Company's then outstanding Voting Securities; provided, however, in
         determining  whether a Change in Control has occurred,  the acquisition
         of Voting  Securities  in a  Non-Control  Acquisition  (as  hereinafter
         defined)  shall  not  constitute  a  Change  in  Control.  "Non-Control
         Acquisition"  shall mean an acquisition by (A) an employee benefit plan
         (or a trust  forming a part  thereof)  maintained by (i) the Company or

<PAGE>

         (ii) any  corporation,  partnership or other person of which a majority
         of its voting power or its equity  securities or other equity interests
         is owned  directly or indirectly by the Company or of which the Company
         serves  as a general  partner  or  manager  (a  "Subsidiary"),  (B) the
         Company  or any  Subsidiary,  or (C) any  person in  connection  with a
         Non-Control Transaction (as hereinafter defined); or

                  (2)  The  individuals  who  constitute  the  Board  as of  the
         Effective  Date  (the  "Incumbent  Board")  cease  for  any  reason  to
         constitute at least two-thirds (2/3) of the Board;  provided,  however,
         that if the  election,  or  nomination  for  election by the  Company's
         stockholders,  of any new  director  was approved by a vote of at least
         two-thirds  (2/3) of the Incumbent  Board,  such new director  shall be
         considered as a member of the Incumbent Board; provided,  further, that
         no individual  shall be  considered a member of the Incumbent  Board if
         such  individual  initially  assumed  office  as a result  of either an
         actual or  threatened  "election  contest" (as described in Rule 14a-11
         promulgated  under the Exchange Act) (an  "Election  Contest") or other
         actual or  threatened  solicitation  of  proxies or  consents  by or on
         behalf of a person other than the Board (a "Proxy  Contest")  including
         by reason of any  agreement  intended  to avoid or settle any  Election
         Contest or Proxy Contest; or

                  (3) Approval by  stockholders of the Company of: (A) a merger,
         consolidation,  share exchange or reorganization involving the Company,
         unless (i) the  stockholders  of the Company,  immediately  before such
         merger, consolidation, share exchange or reorganization,  own, directly
         or indirectly immediately following such merger,  consolidation,  share
         exchange or  reorganization,  at least 80% of the combined voting power
         of the outstanding  voting  securities of the  corporation  that is the
         successor   in  such   merger,   consolidation,   share   exchange   or
         reorganization  (the  "Surviving  Company") in  substantially  the same
         proportion as their ownership of Voting Securities  immediately  before
         such merger, consolidation, share exchange or reorganization,  (ii) the
         individuals who were members of the Incumbent Board  immediately  prior
         to  the  execution  of  the   agreement   providing  for  such  merger,
         consolidation,  share  exchange or  reorganization  constitute at least
         two-thirds  (2/3)  of the  members  of the  board of  directors  of the
         Surviving  Company,  and (iii) no person (other than the Company or any
         Subsidiary,  any  employee  benefit  plan (or any trust  forming a part
         thereof)  maintained  by the  Company,  the  Surviving  Company  or any
         Subsidiary,  or any  person  who,  immediately  prior  to such  merger,
         consolidation,   share  exchange  or   reorganization   had  Beneficial
         Ownership of 15% or more of the then outstanding Voting Securities) has
         Beneficial Ownership of 15% or more of the combined voting power of the
         Surviving  Company's then  outstanding  voting  securities  immediately
         following such merger, consolidation,  share exchange or reorganization
         (a  transaction  described in clauses (i) through  (iii) is referred to
         herein as  "Non-Control  Transaction");  (B) a complete  liquidation or
         dissolution  of the Company;  or (C) an agreement for the sale or other
         disposition of all or substantially all of the assets of the Company to
         any person (other than a transfer to a Subsidiary).

                  Notwithstanding  the foregoing,  a Change in Control shall not
be deemed to occur  solely  because  any person (a  "Subject  Person")  acquires
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities  as a result of the acquisition of  Voting Securities  by the Company

<PAGE>

that,  by reducing the number of Voting  Securities  outstanding,  increases the
proportional  number  of  shares  Beneficially  Owned  by such  Subject  Person,
provided  that if a Change in Control would occur (but for the operation of this
sentence) as a result of the  acquisition  of Voting  Securities by the Company,
and after such share acquisition by the Company, such Subject Person becomes the
Beneficial  Owner  of  any  additional  Voting  Securities  that  increases  the
percentage of the then outstanding Voting Securities  Beneficially Owned by such
Subject Person, then a Change in Control shall occur.