Document:

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                                                                   Exhibit 10.12

                         CRESTLINE CAPITAL CORPORATION

                    1998 COMPREHENSIVE STOCK INCENTIVE PLAN

                      (As amended on September 15, 1999)
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                               Table Of Contents

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                                                                      Page
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ARTICLE I ESTABLISHMENT, PURPOSE AND DURATION.........................   1

   1.1   Establishment of the Plan....................................   1
   1.2   Purpose of the Plan..........................................   1
   1.3   Duration of the Plan.........................................   1

ARTICLE II DEFINITIONS AND CONSTRUCTION...............................   2

   2.1   Definitions..................................................   2
      Allocation Agreement............................................   2
      Approved Retiree................................................   2
      Award...........................................................   2
      Beneficial Owner................................................   2
      Board...........................................................   2
      Stock Bonus Award...............................................   2
      Chief Executive Officer.........................................   2
      Code............................................................   2
      Committee.......................................................   2
      Company.........................................................   2
      Compete.........................................................   2
      Conversion Award................................................   3
      Covered Employee................................................   3
      Current Award...................................................   3
      Deferred Award..................................................   3
      Deferred Stock..................................................   3
      Deferred Stock Agreement........................................   3
      Director........................................................   3
      Disability......................................................   3
      Distribution....................................................   3
      Distribution Date...............................................   3
      Distribution Record Date........................................   3
      Effective Date..................................................   3
      Employee........................................................   4
      Exchange Act....................................................   4
      Fair Market Value...............................................   4
      Host Marriott Corporation.......................................   4
      Incentive Stock Option or ISO...................................   4
      Nonqualified Stock Option or NQSO...............................   4
      Officer.........................................................   4
      Option..........................................................   4
      Option Agreement................................................   4
      Option Price....................................................   4
      Participant.....................................................   4
      Performance-Based Award.........................................   4
      Performance Goal................................................   4
      Period of Restriction...........................................   5
      Person..........................................................   5
      Plan............................................................   5
      Predecessor Plan................................................   5
      Restricted Stock................................................   5
      Restricted Stock Agreement......................................   5
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      Retirement.......................................................    5
      Rule 16b-3.......................................................    5
      SEC..............................................................    5
      Shares...........................................................    5
      Special Recognition Award........................................    5
      Stock Appreciation Right.........................................    5
      Subsidiary.......................................................    5
   2.2   Gender and Number.............................................    5
   2.3   Severability..................................................    6

ARTICLE III ADMINISTRATION.............................................    7

   3.1   The Committee.................................................    7
   3.2   Authority of the Committee....................................    7
   3.3   Decisions Binding.............................................    8
   3.4   Unanimous Consent in Lieu of Meeting..........................    8
   3.5   Delegation and Reliance.......................................    8

ARTICLE IV SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS...............    9

   4.1   Number of Shares..............................................    9
   4.2   Lapsed Awards.................................................    9
   4.3   Adjustments in Authorized Shares..............................    9

ARTICLE V ELIGIBILITY AND PARTICIPATION................................   10

   5.1   Eligibility...................................................   10
   5.2   Actual Participation..........................................   10
   5.3   Employment....................................................   10

ARTICLE VI STOCK OPTIONS...............................................   11

   6.1   Award of Options..............................................   11
   6.2   Terms of Options..............................................   11
   6.3   Incentive Stock Options.......................................   15
   6.4   Performance-Based Awards......................................   17
   6.5   No Replacement of Out-of-the-Money Options....................   18

ARTICLE VII RESTRICTED STOCK...........................................   19

   7.1   Award of Restricted Stock.....................................   19
   7.2   Restricted Stock Agreement....................................   19
   7.3   Nature of Restrictions........................................   19
   7.4   Nontransferability of Restricted Stock........................   20
   7.5   Removal of Restrictions.......................................   21
   7.6   Voting Rights.................................................   22
   7.7   Dividends and Other Distributions.............................   22
   7.8   Termination of Employment.....................................   22

ARTICLE VIII STOCK BONUS AWARDS AND DEFERRED STOCK AGREEMENTS..........   24

   8.1   Awards of Stock Bonus Awards and Deferred Stock Agreements....   24
   8.2   Standard Stock Bonus Awards...................................   24
   8.3   Deferred Stock Agreements.....................................   26
   8.4   Assignment....................................................   27
   8.5   Lump Sum Payments.............................................   27

ARTICLE IX OTHER AWARDS................................................   28

   9.1   Stock Appreciation Rights.....................................   28
   9.2   Other Stock-Based Awards......................................   28
   9.3   Assignment....................................................   28
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ARTICLE X PERFORMANCE-BASED COMPENSATION.............................................................................. 30

   10.1     Performance-Based Awards.................................................................................. 30
   10.2     Eligible Class............................................................................................ 30
   10.3     Performance Measures...................................................................................... 30
   10.4     Committee Certification................................................................................... 31
   10.5     Terms and Conditions of Awards; Committee Discretion to Reduce Performance Awards......................... 31
   10.6     Adjustments for Material Changes.......................................................................... 32
   10.7     Interpretation............................................................................................ 32
   10.8     Financial and Accounting Terms............................................................................ 32

ARTICLE XI SPECIAL RECOGNITION AWARDS................................................................................. 33

ARTICLE XII AMENDMENT, MODIFICATION AND TERMINATION................................................................... 34

ARTICLE XIII TAX WITHHOLDINGS......................................................................................... 35

ARTICLE XIV INDEMNIFICATION........................................................................................... 36

ARTICLE XV SUCCESSORS................................................................................................. 37

ARTICLE XVI REQUIREMENTS OF LAW....................................................................................... 38

   16.1     Requirements of Law....................................................................................... 38
   16.2     Governing Law............................................................................................. 38
   16.3     Plan Construction......................................................................................... 38
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                                   ARTICLE I
                      ESTABLISHMENT, PURPOSE AND DURATION

     1.1  Establishment of the Plan.

          Crestline Capital Corporation, a Maryland corporation (the "Company"),
hereby establishes an incentive compensation plan to be known as the "Crestline
Capital Corporation 1998 Comprehensive Stock Incentive Plan" (hereinafter
referred to as the "Plan"), as set forth in this document. The Plan permits the
grant of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock,
Stock Bonus Awards, Deferred Stock Agreements, Stock Appreciation Rights,
Special Recognition Awards and other stock-based Awards.

          Host Marriott Corporation, as sole shareholder of the Company, shall
approve adoption of the Plan.  The Plan shall become effective as of the date of
such approval or such other dates, as determined by the Board of Directors, (the
"Effective Date"), and shall remain in effect as provided in Section 1.3.  The
Company shall take such actions with respect to the Plan as may be necessary to
satisfy the requirements of Rule 16b-3(b) under the Exchange Act.

     1.2  Purpose of the Plan.

          The purpose of the Plan is to promote and enhance the long-term
growth, development and financial success of the Company by aligning the
personal interests of key management employees to those of Company shareholders
and allowing such employees to participate in the growth, development and
financial success of the Company.  Awards under the Plan may be, but need not
be, Performance-Based Awards.

          The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract and retain the services of key employees who
have been or will be given management responsibilities.

     1.3  Duration of the Plan.

          The Plan shall commence on the Effective Date, as described in Section
1.1 hereof, and shall remain in effect, subject to the right of the Board of
Directors of the Company to terminate the Plan at any time pursuant to Article
XII hereof, until all Shares subject to it shall have been purchased or acquired
according to the Plan's provisions.

                                       1
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                                  ARTICLE II
                         DEFINITIONS AND CONSTRUCTION

     2.1  Definitions.

          Whenever used in the Plan, the following terms shall have the meanings
set forth below and, when the meaning is intended, the initial letter of the
word is capitalized:

          Allocation Agreement means the Employee Benefits Allocation and Other
Employment Matters Agreement between the Company and Host Marriott Corporation
and Host Marriott, L.P.

          Approved Retiree has the meaning set forth in Section 6.2(g) hereof.

          Award means individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, Restricted Stock, Stock
Bonus Awards, Deferred Stock Agreements, Stock Appreciation Rights, Special
Recognition Awards or other stock-based Awards.

          Beneficial Owner has the meaning ascribed to such term in Rule 13d-3
of the General Rules and Regulations under the Securities Exchange Act of 1934.

          Board means the Board of Directors of the Company.

          Stock Bonus Award means a grant of Shares pursuant to Article 8
hereof.

          Chief Executive Officer means the chief executive officer of the
Company however such person may be titled.

          Code means the Internal Revenue Code of 1986, as amended from time to
time.

          Committee has the meaning set forth in Section 3.1 hereof.

          Company has the meaning set forth in Section 1.1 hereof.

          Compete means to engage, individually or as an employee, consultant or
owner (of more than 5%) of any entity, in any business engaged in significant
competition with any business operated by the Company, as determined by the
Board or the Committee.

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          Conversion Award means an Award made pursuant to the Allocation
Agreement to reflect the effect of the Distribution on outstanding shares made
under the Predecessor Plans and held by the grantee immediately before the
Distribution.

          Covered Employee means a Participant who, as applicable, is one of the
group of "covered employees," as defined in the regulations promulgated under
Section 162(m) of the Code, or any successor statute.

          Current Award means a Stock Bonus Award granted under the terms and
conditions described in Section 8.2(c) hereof.

          Deferred Award means a Stock Bonus Award granted under the terms and
conditions described in Section 8.2(b) hereof.

          Deferred Stock means Shares subject to a Deferred Award or to a
Deferred Stock Agreement.

          Deferred Stock Agreement means an Award of Deferred Stock granted
under the terms and conditions described in Section 8.3 hereof.

          Director means any individual who is a member of the Board.

          Disability means a permanent and total disability, within the meaning
of Section 22(e)(3) of the Code, as determined by the Committee in good faith,
upon receipt of sufficient competent medical advice from one or more
individuals, selected by or satisfactory to the Committee, who are qualified to
give professional medical advice.

          Distribution means the distribution to the holders of outstanding
shares of common stock of Host Marriott Corporation Company Shares and the
related arrangements between the Company and Host Marriott Corporation, and the
policies to be adopted by such companies, in connection therewith.

          Distribution Date means a date to be established by the Board of
Directors of Host Marriott Corporation, upon which Host Marriott Corporation
will deliver shares of the Crestline Capital Corporation Common Stock to a
distribution agent, who will disburse stock certificates representing those
shares in a manner consistent with the terms of the Distribution.

          Distribution Record Date means a date to be established by the Board
of Directors of Host Marriott Corporation to determine those shareholders of
Host Marriott Corporation who will participate in the Distribution and, as such,
be entitled to receive shares of Crestline Capital Corporation Common Stock.

          Effective Date has the meaning set forth in Section 1.1 hereof.

                                       3
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          Employee means any employee of the Company.

          Exchange Act means the Securities Exchange Act of 1934, as amended
from time to time, or any successor Act thereto.

          Fair Market Value means the average of the highest and lowest quoted
selling prices for the Shares on the relevant date, or (if there were no sales
on such date) the average so computed on the nearest day before and the nearest
day after the relevant date, as reported in the Wall Street Journal or a similar
publication selected by the Committee.

          Host Marriott Corporation means Host Marriott Corporation, a Delaware
corporation, and is successors and assigns.

          Incentive Stock Option or ISO means an Award of an option to purchase
Shares, granted under Article VI hereof, which is designated as an Incentive
Stock Option and is intended to meet the requirements of Section 422 of the
Code.

          Nonqualified Stock Option or NQSO means an Award of an option to
purchase Shares, granted under Article VI hereof, which is not intended to be an
Incentive Stock Option.

          Officer means an officer of the Company within the meaning of the term
"officer" set forth in Rule 16a-1(f), as amended from time to time, under the
Exchange Act.

          Option means an Award of an Incentive Stock Option or of a
Nonqualified Stock Option.

          Option Agreement has the meaning set forth in Section 6.2 hereof.

          Option Price means the price at which a Share may be purchased by a
Participant pursuant to an Option.

          Participant means an Employee or former Employee of the Company to
whom an Award granted under the Plan is outstanding, or any other individual to
whom a Conversion Award granted under the Plan is outstanding.

          Performance-Based Award has the meaning set forth in Section 10.1
hereof.

          Performance Goal means one or more performance targets that are
measured, on an absolute or relative basis, by the performance measures
described in Section 10.3 hereof and on which the grant, vesting, exercisability
or payment of any Award (other than any Option or Stock Appreciation Right)
depends on the degree of achievement of those performance targets.

                                       4
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          Period of Restriction means the period during which (i) the transfer
of Shares of Restricted Stock pursuant to an Award is restricted and (ii) the
Award of Restricted Stock is subject to a substantial risk of forfeiture, as
provided in Article VII hereof.

          Person has the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and shall include a "group," as defined in Section 13(d)(3)
thereof.

          Plan has the meaning set forth in Section 1.1 hereof.

          Predecessor Plan means the Host Marriott Corporation 1997
Comprehensive Stock Incentive Plan (formerly called the Host Marriott
Corporation 1993 Comprehensive Stock Incentive Plan).

          Restricted Stock means an Award granted to a Participant pursuant to
Article VII hereof.

          Restricted Stock Agreement has the meaning set forth in Section 7.2
hereof.

          Retirement means termination of employment which is approved as a
retirement by the Committee.

          Rule 16b-3 means Rule 16b-3 or any successor or amended rule
promulgated by the SEC under the Exchange Act.

          SEC means the Securities and Exchange Commission.

          Shares means shares of common stock, par value $0.01, of the Company.

          Special Recognition Award means an award of Shares or of an option to
purchase Shares pursuant to Article XI hereof.

          Stock Appreciation Right has the meaning set forth in Section 9.1
hereof.

          Subsidiary means any corporation more than fifty percent of the
combined voting power of all classes of stock of which is beneficially owned by
the Company, or by any of its Subsidiaries.

     2.2  Gender and Number.

          Except where otherwise indicated by the context, any masculine term
used herein also shall include the feminine; the plural shall include the
singular and the singular shall include the plural.

                                       5
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     2.3  Severability.

          In the event any provision of the Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included, except that the Plan
shall be construed to continue to comply with Section 162(m) of the Code and
Rule 16b-3 under the Exchange Act and, in the case of Incentive Stock Options,
Section 422 of the Code.

                                       6
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                                  ARTICLE III
                                ADMINISTRATION

     3.1  The Committee.

          The Plan shall be administered by a Committee (the "Committee")
composed of  the Compensation Policy Committee of the Board of Directors.
Provided that , with respect to Officers and Covered Employees, the Plan shall
be administered by a Committee composed of only those members of the
Compensation Committee who qualify as (i) a "Non-Employee Director" within the
meaning of Rule 16b-3(b) under the Exchange Act and (ii) "Outside Directors"
within the meaning of Section 162(m) of the Code and Treasury Regulation ((S))
1.162-27(e), or any successor provision(s) thereto. A majority of the members of
the Committee (but not fewer than two) shall constitute a quorum.  The vote of a
majority of a quorum or the unanimous written consent of the Committee shall
constitute action by the Committee.

     3.2  Authority of the Committee.

          Except as limited by law or by the Articles of Incorporation or Bylaws
of the Company, and subject to the provisions set forth herein, the Committee,
consisting of the full Compensation Policy Committee or only those members
qualifying as "Non-Employee Directors" and "Outside Directors" (as defined
above), as appropriate, shall have sole power to select Employees who shall
participate in the Plan, to determine the sizes and types of Awards and to
determine the amounts, pricing, timing and other terms and conditions (e.g.,
vesting, term, manner of exercise, distribution, etc.) of such Awards in a
manner consistent with the Plan, except that Stock Bonus Awards authorized by
Article VIII hereof shall be granted and administered by the Chief Executive
Officer in the case of any recipients who are not Officers or Covered Employees.
The Committee shall have full power to construe and interpret the Plan and any
agreement or instrument entered into under the Plan; to establish, amend or
waive rules and regulations for the Plan's administration; and, subject to the
provisions of Article XI herein, to amend the terms and conditions of any
outstanding Award. Further, the Committee shall have the full power to make all
other determinations which it deems necessary or advisable for the
administration of the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the terms of any Award or in the
terms of the Plan, in the manner and to the extent it shall deem expedient. The
Committee shall be the sole and final judge of such expediency, and its
determinations shall be conclusive.

                                       7
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     3.3  Decisions Binding.

          All determinations and decisions made by the Committee pursuant to the
provisions of the Plan and all related orders or resolutions of the Board shall
be final, conclusive and binding on all Persons, including the Company and its
shareholders, Employees and Participants, and the estates, beneficiaries or
other representatives of any of the foregoing Persons.

     3.4  Unanimous Consent in Lieu of Meeting.

          A memorandum signed by all Committee members shall constitute the act
of the Committee without the necessity, in such event, of holding a meeting.

     3.5  Delegation and Reliance.

          The Committee may delegate to the officers or employees of the Company
the authority to execute and deliver those instruments and documents, to do all
acts and things, and to take all other steps deemed necessary, advisable or
convenient for the effective administration of this Plan in accordance with its
terms and purpose, except that the Committee may not delegate any discretionary
authority to grant or amend an Award or with respect to substantive decisions or
functions regarding this Plan or Awards as these relate to the material terms of
Performance-Based Awards to Covered Employees or to the timing, eligibility,
pricing, amount or other terms (including the terms of Performance-Based Awards)
of Awards to insiders. In making any determination or in taking or not taking
any action under this Plan, the Board and the Committee may obtain and may rely
upon the advice of experts, including professional advisors to the Company. No
director, officer, employee or agent of the Company shall be liable for any such
action or determination taken or made or omitted in good faith.

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                                  ARTICLE IV
                 SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

     4.1  Number of Shares.

          Subject to Sections 4.2 and 4.3 herein, (a) in the aggregate, no more
than four million (4,000,000) shares of Common Stock of the Company may be
issued pursuant to Awards granted under the Plan, and (b) the maximum aggregate
number of Shares that may be subject to any Awards (other than Conversion
Awards) granted in any one fiscal year to any single Employee shall be one
million (1,000,000).  No more than 20% of the Shares available for Awards will
be issued with respect to Awards other than Options.

     4.2  Lapsed Awards.

          If any Award granted under this Plan is canceled, terminates, expires,
or lapses for any reason, any Shares subject to such Award shall again be
available for the grant of an Award under the Plan.

     4.3  Adjustments in Authorized Shares.

          In the event of any change in corporate capitalization, such as a
stock split, or a corporate transaction, such as any merger, consolidation,
separation, including a spin-off, or other distribution of stock or property of
the Company, any reorganization (whether or not such reorganization comes within
the definition of such term in Code Section 368) or any partial or complete
liquidation of the Company, (a) such adjustment shall be made in the number and
class of Shares which may be delivered under Section 4.1 and the Award limits
set forth in Section 4.1 as may be determined to be appropriated and equitable
by the Committee, in its sole discretion, to prevent dilution or enlargement of
rights; and (b) the Committee or the Board of Directors or similar body of any
other legal entity assuming the obligations of the Company hereunder, shall
either (i) make appropriate provision for the protection of outstanding Awards
by the substitution on an equitable basis of appropriate equity interest or
awards similar to the Awards, provided that the substitution neither enlarges
nor diminishes the value and rights under the Awards; or (ii) upon written
notice to the Participants, provide that Awards will be exercised, distributed,
canceled or exchanged for value pursuant to such terms and conditions (including
the waiver of any existing terms or conditions) as shall be specified in the
notice. Any adjustments of an ISO under this paragraph shall be made in such a
manner so as not to constitute a "modification" within the meaning of Section
424(h)(3) of the Code.

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                                   ARTICLE V
                         ELIGIBILITY AND PARTICIPATION

     5.1  Eligibility.

          Persons eligible to participate in this Plan include all Employees of
the Company, including Employees who are members of the Board, but excluding
Directors who are not Employees.

     5.2  Actual Participation.

          Subject to the provisions of the Plan, and with the exception that
Stock Bonus Awards (other than those to Officers and Covered Employees) shall be
approved by the Chief Executive Officer, the Committee in its sole and absolute
discretion may, from time to time, select from all eligible Employees, those
employees to whom Awards shall be granted and shall determine the nature and
amount of each Award.  No Employee who is eligible under Section 5.1 shall have
any right to be granted an Award under this Plan.

     5.3  Employment.

          Nothing in the Plan or in any Award, Option Agreement, Deferred Stock
Agreement, Restricted Stock Agreement, Stock Appreciation Right or other Award
shall interfere with or limit in any way the right of the Company to terminate
any Participant's employment at any time with or without cause, or to increase
or decrease the Employee's compensation from the rate in existence at the time
an Award is granted (subject to Section 10.6), and nothing in the Plan shall
confer upon any Participant any right to continue in the employ of the Company.

                                       10
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                                  ARTICLE VI
                                 STOCK OPTIONS

     6.1  Award of Options.

          Subject to the terms and provisions of the Plan, Options may be
awarded to Employees at any time and from time to time as shall be determined by
the Committee.  The Committee shall have complete discretion in determining the
number of Shares subject to Options awarded to each Participant.  The Committee
may award Incentive Stock Options, Nonqualified Stock Options or a combination
thereof.  No person shall be eligible to receive Incentive Stock Options who
owns, directly or indirectly (as ownership is defined in Section 424(d) of the
Code), more than ten percent (10%) of the combined voting power of all classes
of stock of the Company or of any of its Subsidiaries.  Nothing in this Article
VI shall be deemed to prevent the grant of Nonqualified Stock Options in excess
of the maximum established by Section 422 of the Code.

     6.2  Terms of Options.

          A grant of an Option shall be evidenced by an Option Agreement in form
consistent with the Plan as the Committee shall approve from time to time (an
"Option Agreement").  Such Option Agreements need not be identical, but shall
incorporate in substance the following terms and conditions and, if providing
for the grant of an Incentive Stock Option, shall also contain the provisions
set forth in Section 6.3 of the Plan.  In the case of a conflict, the terms of
the Plan shall control.

               (a)  Price.  The Option Price for each Share deliverable upon the
exercise of an Option shall be not less than its Fair Market Value of the stock
as determined by the Committee on the day the award of the Option is approved by
the Committee, which shall be deemed to be the date the Option is awarded.  In
the case of Conversion Awards of Options, the purchase price for each Share
deliverable upon the exercise of an Option shall be the amount determined in
accordance with Section 2.5 of the Allocation Agreement.

               (b)  Number of Shares. The Option Agreement shall specify the
number of Shares to which it pertains. In the case of Conversion Awards, the
number of Shares to which the Option pertains may be adjusted in accordance with
Section 2.5 of the Allocation Agreement.

               (c)  Waiting Period and Exercise Dates.  Each Option shall be
exercisable by the Optionee in accordance with the exercise provisions the
Committee may include, in its sole discretion, in the Option Agreement;
provided, however, that no Nonqualified Stock Option shall be exercisable after
the expiration

                                       11
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of fifteen (15) years from the date such Nonqualified Stock Option is granted
and no Incentive Stock Option shall be exercisable after the expiration of ten
(10) years from the date such Incentive Stock Option is granted (or such shorter
period of time as determined by the Committee upon the award of such
Nonqualified Stock Option or Incentive Stock Option). Partial exercise of an
Option may be permitted.

          (d)  Medium and Time of Payment.  Shares purchased pursuant to an
Option Agreement shall be paid for in full at the time of purchase, either upon
a full or partial exercise of an Option subject to such Option Agreement.  Such
payment shall be made either in cash or its equivalent or, if requested by the
Participant and approved by the Committee, by delivery of Shares having an
aggregate Fair Market Value equal to the Option Price, including Shares received
upon exercise of the Option.  The Committee also may allow, if requested by the
Participant and approved by the Committee, cashless exercise as permitted under
the Federal Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law.  Upon receipt of payment
the Company shall, without transfer or issue tax to the Participant or other
Person entitled to exercise the Option, deliver to the Participant or such other
Person either a stock certificate or stock certificates for such Shares or
confirmation from the transfer agent for the Shares that said transfer agent is
holding Shares for the account of the Participant or such other Person in a
certificateless account.

          (e)  Rights as a Shareholder.  The Participant shall have no rights as
a shareholder with respect to any Shares covered by the Option until the date of
issuance of a stock certificate or confirmation for such Shares.  Except as
otherwise expressly provided in the Plan, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date of
issuance.

          (f)  Non-Assignability of Option Rights. No Option shall be assignable
or transferable by the Participant except by will or by the laws of descent and
distribution, and during the life of a Participant, the Option shall be
exercisable only by the Participant; provided, however, that upon the
Participant's request to the Committee and the Committee's subsequent approval,
any Option that is not designated by the Committee as an Incentive Stock Option,
may, to the extent permitted by the applicable Option Agreement, be assigned or
transferred by the Participant to (and may be exercisable by or on behalf of)
one or more members of the Participant's immediate family or one or more trusts
established for the exclusive benefit of one or more members of the
Participant's immediate family. For this purpose, the term "immediate family"
means the Participant's children, stepchildren, grandchildren, parents,
stepparents, grandparents, spouse, siblings (including half-brothers and half-
sisters), in-laws and persons so related by legal adoption. The transferee of
any Option pursuant to this paragraph shall have the same rights and shall be
subject to the same obligations with respect to the Option and the Shares
subject to the Option as the Participant would have had or been but

                                       12
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for the transfer, except that the transferee of any Option shall not assign or
transfer that Option to anyone other than the Participant, except by will or by
the laws of descent and distribution.

          (g)  Effect of Leave of Absence, Termination of Employment or Death.
In the event that a Participant during the Participant's lifetime goes on leave
of absence for a period of greater than twelve (12) months, or ceases to be an
Employee of the Company or of any Subsidiary for any reason, including
Retirement (except a leave of absence approved by the Board or the Committee, as
the case may be), except as otherwise provided in the Option Agreement, any
Option or unexercised portion thereof which was otherwise exercisable on the
date of termination of employment shall expire unless exercised within a period
of ninety (90) days (or, in the case of a Participant's Disability, within a
period of one year) from the date on which the Participant ceased to be an
Employee, or has been on leave for over twelve (12) months, but in no event
after the expiration of the term for which the Option was granted; provided,
however, that in the case of a Participant of a Nonqualified Stock Option who is
an Approved Retiree, said Participant may exercise such Option until the sooner
to occur of (i) the expiration of such Option in accordance with its original
term or (ii) one year from the date on which the Option latest in time awarded
to the Participant under the Plan has become fully exercisable under Section
6.2(c) above.  For purposes of the proviso to the preceding sentence.

          (1)  An "Approved Retiree" is any Participant who (A) retires from
employment with the Company with the specific approval of the Board on or after
such date on which the Participant has completed 20 Years of Service or has
attained age 55 and completed 10 Years of Service, and (B) has entered into and
has not breached an agreement to refrain from Engaging in Competition in form
and substance satisfactory to the Committee;

          (2)  Any time period during which a Participant may continue to
exercise an Option within clause (ii) of said proviso shall count in determining
compliance with any schedule pursuant to Section 6.2(c) above; and

          (3)  If an Approved Retiree is subsequently found by the Committee to
have violated the provisions of the agreement to refrain from Engaging in
Competition referred to in clause (1)(B) above, such Approved Retiree shall have
ninety (90) days from the date of such finding within which to exercise any
Options or portions thereof which are exercisable on such date, any Options or
portions thereof which are not exercised within such ninety- (90-) day period
shall expire and any Options or portion thereof which are not exercisable on
such date shall be canceled on such date.

          In the event of the death of a Participant during either (i) the three
(3) month period described above for the exercise of an Option by a terminated

                                       13
<PAGE>

Participant or by a Participant on leave for over twelve (12) months, or (ii)
any period during which an Approved Retiree may exercise an Option, then, in
either of such cases, the Option shall be exercisable by the Participant's
personal representatives, heirs or legatees to the same extent and during the
same period that the Participant could have exercised the Option if the
Participant had not died. In the event of the death of a Participant while an
Employee or Approved Retiree of the Company or of any Subsidiary, the total
Option granted to the deceased Participant (but, in the case of an Employee,
only if the required holding or waiting period specified in the Option Agreement
has elapsed) shall be fully vested upon death and shall be exercisable by the
deceased Participant's personal representatives, heirs or legatees at any time
prior to the expiration of one year from the date of the death of the
Participant, but in no event after the expiration of the term for which the
Option was granted.

          In the event that a Participant ceases to be an Employee of the
Company or of any Subsidiary for any reason, including death or Retirement
(except in the case of either (i) an extended leave of absence approved by the
Committee pursuant to Section 6.2(h) below, or (ii) an Approved Retiree) prior
to the lapse of the required holding or waiting period specified in the Option
Agreement, unless provided otherwise in the Option Agreement, the Option shall
terminate immediately and be void.

          (h)  Extended Leave of Absence.  In the case of an Employee who is on
approved leave of absence in excess of twelve (12) months, the Committee may, as
it deems equitable, make provision for the continuance of an Option during the
period of the leave of absence, except that in no event shall an Option be
exercised after the expiration of the term for which such Option was granted.

          (i)  General Restriction. Each Option shall be subject to the
requirement that, if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the Shares
subject to such Option upon any securities exchange or under any state or
federal law, or the consent or approval of any government regulatory body, is
necessary or desirable as, for example, a condition of, or in connection with,
the issuance or purchase of Shares thereunder, such Option may not be exercised
in whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.

          (j)  Designation of Option. Each Option issued under the Plan shall be
clearly identified as an Incentive Stock Option or as a Nonqualified Stock
Option.

          (k)  Holding Period.  Unless otherwise approved by the Committee in
accordance with Rule 16b-3(d) under the Exchange Act in connection with or
following the grant of an Option, a Participant who is subject to Section 16

                                       14
<PAGE>

of the Exchange Act may not dispose of any Shares acquired as a result of an
exercise of an Option until six (6) months after the date of the grant of such
Option.

          (l)  Additional Terms. Each Option shall be subject to such additional
terms and conditions and provisions as the Committee may deem advisable, in its
sole discretion, which are not inconsistent with the Plan or Rule 16b-3 under
the Exchange Act, including, without limitation, restrictions upon the transfer
of the Shares received upon exercise of the Option.

     6.3  Incentive Stock Options.

          The Committee may designate that any Options granted pursuant to the
Plan shall be Incentive Stock Options, any such designation to be subject to the
following additional terms and conditions:

          (a)  Exercised Options.  No Option which has been exercised may
retroactively be designated as an Incentive Stock Option.

          (b)  Limitation on Date of Grant.  No Incentive Stock Option shall be
granted later than ten years from the date this Plan is adopted or, if earlier,
the date this Plan is approved by the shareholders pursuant to Section 1.1
hereof.  However, if the Plan is amended and shareholder approval of such
amendment is obtained, which approval complies with the requirements of Section
422 of the Code, no Incentive Stock Option shall be granted later than ten (10)
years from the date the Plan is amended or, if earlier, the date such amendment
is approved by the shareholders.

          (c)  Limitation on Annual Exercise. In the case of all Incentive Stock
Options granted hereunder, the aggregate Fair Market Value (determined at the
time the Options are granted) of the Shares for which Incentive Stock Options
are exercisable for the first time by any individual during any calendar year
(under plans of the Company and any of its Subsidiaries) shall not exceed
$100,000.

          (d)  Duration of Incentive Stock Options. Subject to earlier
termination as provided in Section 6.3(e) and (f) hereunder, each Incentive
Stock Option shall expire on the date specified by the Committee, but not more
than ten (10) years from the date of its grant.

          (e)  Effect of Termination of Employment on Incentive Stock Options.
All Incentive Stock Options shall terminate after the passage of ninety (90)
days from the date of termination of a Participant's employment by the Company
or any of its Subsidiaries but in no event later than on their specified
expiration dates, except to the extent that such Incentive Stock Options (or
unexercised installments thereof) have been converted into Nonqualified Stock
Options (in which case the provisions of Section 6.3(i) hereof shall control).
Leave of

                                       15
<PAGE>

absence with the written approval of the Committee shall not be considered a
termination of employment under the Plan, provided that such written approval
contractually obligates the Company to continue the employment of the Employee
after the approved period of absence. Employment shall also be considered as
continuing uninterrupted during any other bona fide leave of absence (such as
those attributable to illness, military obligations or governmental service),
provided that the period of such leave does not exceed ninety (90) days or, if
longer, any period during which such Participant's right to reemployment is
guaranteed by statute or by contract.

          (f)  Effect of Death or Disability on Incentive Stock Options.  If a
Participant ceases to be employed by the Company by reason of his death, any of
such Participant's Incentive Stock Options may be exercised (to the extent of
the number of Shares with respect to which such Participant could have exercised
such Incentive Stock Options on the date of the Participant's death) by the
Participant's estate, personal representative or beneficiary who has acquired
the Incentive Stock Option by will or by the laws of descent and distribution,
at any time prior to the earlier of (i) the date specified in the Incentive
Stock Option Agreement, (ii) the Incentive Stock Option's specified expiration
date or (iii) one year after the death of the Participant.

          If a Participant ceases to be employed by the Company by reason of the
Participant's Disability, the Participant shall have the right to exercise any
Incentive Stock Option held by such Participant on the date of termination of
employment (to the extent of the number of Shares with respect to which the
Participant could have exercised such Incentive Stock Option on that date), at
any time prior to the earlier of (i) the date specified in the Incentive Stock
Option Agreement, (ii) the Incentive Stock Option's specified expiration date
or, (iii) one year from the date of termination of the Participant's employment.

          (g)  Adjustments.  Any adjustment made pursuant to Section 4.3 hereof
with respect to the Incentive Stock Options shall be made only after the
Committee, after consulting with the General Counsel of the Company, determines
whether such adjustments would constitute a "modification" of such Incentive
Stock Option (as such term is defined in Section 424(h)(3) of the Code) or would
cause any adverse tax consequences for the holders of such Incentive Stock
Options.  If the Committee determines that such adjustments made with respect to
Incentive Stock Options would constitute a "modification" of such Incentive
Stock Options, the Committee may refrain from making such adjustments.

          (h)  Notice to Company of Disqualifying Dispositions.  Each Employee
who receives an Incentive Stock Option agrees to notify the Company in writing
immediately after the Employee makes a "disqualifying disposition" of any Shares
acquired pursuant to the exercise of an Incentive Stock Option.  A
"disqualifying disposition" is any disposition (including any sale) of such
Shares

                                       16
<PAGE>

before the later of (i) two years after the date the Employee was granted the
Incentive Stock Option, or (ii) one year after the date the Employee acquired
such Shares by exercising the Incentive Stock Option. If the Employee has died
before such Shares are sold, these holding period requirements do not apply.

          (i)  Conversion of Incentive Stock Options into Nonqualified Stock
Options; Termination of Incentive Stock Options. The Committee, at the written
request of any Participant, may in its discretion take such actions as may be
necessary to convert such Participant's Incentive Stock Options (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Nonqualified Stock Options at any time prior to
the expiration of such Incentive Stock Options, regardless of whether the
Participant is an Employee of the Company at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the Option Price of the appropriate installment of such Incentive Stock
Options. At the time of such conversion, the Committee (with the consent of the
Participant) may impose such conditions on the exercise of the resulting
Nonqualified Stock Options as the Committee in its discretion may determine,
provided that such conditions shall not be inconsistent with the provisions of
Section 6.2 hereof or any other applicable Section hereof. Nothing in the Plan
shall be deemed to give any Participant the right to have such Participant's
Incentive Stock Options converted into Nonqualified Stock Options, and no such
conversion shall occur unless and until the Committee takes appropriate action.
The Committee, with the consent of the Participant, may also terminate any
portion of any Incentive Stock Option that has not been exercised at the time of
such termination. The above provisions notwithstanding, the Committee shall not
have discretion to take any action with respect to Incentive Stock Options
intended to be qualified performance-based compensation which is inconsistent
with Section 162(m) of the Code.

          (j)  Compliance with Code. Any designation of an Option as an
Incentive Stock Option and any related Option Agreement shall be subject to and
contain such further terms and conditions as shall be necessary to comply with
all provisions of the Code (including any regulations thereunder or
interpretations thereof) which apply to Incentive Stock Options (as defined in
Section 422(b) of the Code). In addition, the Committee may, with respect to any
Option (and any related Option Agreement) granted hereunder which is designated
as an Incentive Stock Option, adopt any amendment thereto which it may deem
necessary or advisable to comply with the provisions of Section 422 of the Code.

     6.4  Performance-Based Awards.

          All Options granted under this Article VI to Officers or Covered
Employees shall be treated as Performance-Based Awards subject to the applicable
restrictions of Article X.

                                       17
<PAGE>

     6.5  No Replacement of Out-of-the-Money Options.

          The Committee may not without the prior approval of the stockholders
of the Company lower the exercise price of an outstanding Option, whether by
amending the exercise price of the outstanding Option or through the
cancellation of the outstanding Option and reissuance of a replacement or
substitute Option; provided that stockholder approval shall not be required for
adjustments made in connection with a corporate event described in Section 4.3
of the Plan in order to prevent enlargement, dilution or diminishment of rights.

                                       18
<PAGE>

                                  ARTICLE VII
                               RESTRICTED STOCK

     7.1  Award of Restricted Stock.

          Subject to the terms and conditions of the Plan, the Committee, at any
time and from time to time, may award Shares of Restricted Stock to Employees in
such amounts, and bearing such restrictions, as the Committee shall determine.

     7.2  Restricted Stock Agreement.

          Each Restricted Stock Award shall be evidenced by a Restricted Stock
Agreement that shall specify the Period or Periods of Restriction, the number of
Shares of Restricted Stock awarded, and such other provisions as the Committee
shall determine (a "Restricted Stock Agreement").

     7.3  Nature of Restrictions.

          The restrictions to be imposed on the Shares of Restricted Stock to be
awarded shall be removed in phases over a period of years depending upon the
fulfillment of conditions to be determined by the Committee, including, but not
limited to: (i) continued employment with the Company over a prescribed period
of time, (ii) the Participant's refraining from Competing with the Company or
otherwise engaging in activities which are inimical to the Company's best
interests, (iii) Performance Goals consistent with Section 162(m) of the Code,
(iv) a requirement that the Participant pay a stipulated purchase price for each
Share of Restricted Stock, (v) time-based restrictions on vesting following the
attainment of the Performance Goals, and/or (vi) restrictions under applicable
Federal or state securities laws.  The conditions set forth herein are
illustrative and not exhaustive of the conditions the Committee may establish.

          It is intended that the restrictions imposed by the Committee will,
until removed, constitute a "substantial risk of forfeiture" of the Shares of
Restricted Stock within the meaning of Section 83(c)(1) of the Code and Section
1.83-3 of the Federal Income Tax Regulations and are to be construed
accordingly.  If the conditions are not met, then any Shares that otherwise
would be freed from the restrictions will be returned to the Company for
cancellation.  Each Conversion Award of Restricted Stock denominated in Shares
of the Company shall be released from restrictions at the same time and on the
same schedule as the corresponding restricted shares of Host Marriott
Corporation retained in connection with such Conversion Award as of the
Distribution, under the terms of the restrictions to which the grantee's award
under the Predecessor Plan or under an individual

                                       19
<PAGE>

restricted stock contract with Host Marriott Corporation were subject except
that: (a) release of such Shares of Restricted Stock shall be contingent upon a
finding by the Chief Executive Officer (or other equivalent or higher officer)
of Host Marriott Corporation that a grantee who is an employee of Host Marriott
Corporation has satisfied conditions for such release; or (b) release of such
Shares of Restricted Stock shall be contingent upon a finding by the Chief
Executive Officer (or other equivalent or higher officer) of the Company that a
grantee who is an Employee has satisfied conditions for such release.

     7.4  Nontransferability of Restricted Stock.

          Except as otherwise provided in this Article VII, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Restricted Stock
Agreement, or upon earlier satisfaction of any other conditions, as specified by
the Committee in its sole discretion and set forth in the Restricted Stock
Agreement. Except as otherwise provided in this Article VII, all rights with
respect to the Shares of Restricted Stock granted to a Participant under the
Plan shall be available during his or her lifetime only to such Participant;
provided, however, that upon the Participant's request to the Committee and the
Committee's subsequent approval, any Shares of Restricted Stock may, to the
extent permitted by the applicable Restricted Stock Agreement, be assigned or
transferred by the Participant to (and may be exercisable by or on behalf of)
one or more members of the Participant's immediate family or one or more trusts
established for the exclusive benefit of one or more members of the
Participant's immediate family. For this purpose, the term "immediate family"
means the Participant's children, stepchildren, grandchildren, parents,
stepparents, grandparents, spouse, siblings (including half-brothers and half-
sisters), in-laws and persons so related by legal adoption. The transferee of
any such Shares of Restricted Stock pursuant to this paragraph shall have the
same rights and shall be subject to the same obligations with respect to the
Shares of Restricted Stock as the Participant would have had or been but for the
transfer, except that the transferee of any Shares of Restricted Stock shall not
assign or transfer such Shares of Restricted Stock to anyone other than the
Participant, except by will or by the laws of descent and distribution. The
Shares of Restricted Stock granted hereunder shall bear a legend reflecting the
non-transferability of such Shares for so long as such Shares remain non-
transferable. Nothing in this Article precludes the Committee, in its sole
discretion, from permitting a transfer prior to the end of the Period of
Restriction so long as the waiver or modification of transferability is set
forth in the Restricted Stock Agreement.

                                       20
<PAGE>

     7.5  Removal of Restrictions.

          Except as otherwise provided in this Article VII, Shares of Restricted
Stock granted under the Plan shall become freely transferable by the Participant
after the last day of the Period of Restriction applicable to such Shares;
provided, however, that in no event shall a Participant who is subject to
Section 16 of the Exchange Act dispose of any Shares of Restricted Stock until
six (6) months after the date of the grant of such Restricted Stock as
determined in accordance with Rule 16b-3 and only with the prior written
approval of the General Counsel of the Company.

                                       21
<PAGE>

     7.6  Voting Rights.

          During the Period of Restriction, Participants awarded Shares of
Restricted Stock hereunder may exercise full voting rights with respect to those
Shares.

     7.7  Dividends and Other Distributions.

          During the Period of Restriction, Participants awarded Shares of
Restricted Stock hereunder shall be entitled to receive all dividends and other
distributions paid with respect to the underlying Shares.  If any such dividends
or distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.

          The Committee may apply any restrictions to the dividends that the
Committee deems appropriate.  Without limiting the generality of the preceding
sentence, if the grant or vesting of an Award granted to a Covered Employee is
designed to comply with the requirements of a Performance-Based Award, the
Committee may apply any restrictions it deems appropriate to the payment of
dividends declared with respect to Shares covered by such Award, such that the
dividends and/or the Shares covered by such Award maintain eligibility as a
Performance-Based Award.

          In the event that any dividend constitutes a "derivative security" or
an "equity security" pursuant to Rule 16(a) under the Exchange Act, such
dividend shall be subject to a vesting period equal to the remaining vesting
period of the Shares with respect to which the dividend is paid.

     7.8  Termination of Employment.

          Except as determined otherwise by the Committee at the time of grant,
in the event a Participant's employment with the Company (or Host Marriott
Corporation, as applicable, with respect to Conversion Awards) is terminated
because of (i) death, or (ii) Disability, the release of the Shares pursuant to
this Article VII shall nevertheless continue in the same manner as though his or
her active employment with the Company (or Host Marriott Corporation, as
applicable, with respect to Conversion Awards) were continuing on a satisfactory
performance basis; and the Participant's rights thereunder in case of death or
mental incapacity shall inure to the benefit of his or her beneficiaries or, in
the absence of such beneficiaries, to the Participant's estate.  In the event
that a Participant's employment with the Company (or Host Marriott Corporation,
as applicable, with respect to Conversion Awards) is terminated for any reason
other than death or

                                       22
<PAGE>

Disability during the Period of Restriction, such Participant's outstanding
Restricted Shares shall be forfeited to the Company without payment, unless the
Committee, in its sole discretion, determines otherwise.

                                       23
<PAGE>

                                 ARTICLE VIII
               STOCK BONUS AWARDS AND DEFERRED STOCK AGREEMENTS

     8.1  Awards of Stock Bonus Awards and Deferred Stock Agreements.

          Subject to the terms and provisions of the Plan, the Chief Executive
Officer may grant Stock Bonus Awards to Employees who are not Officers or
Covered Employees, the Committee may grant Stock Bonus Awards to Officers or
Covered Employees, and the Committee, in response to a recommendation from the
Chief Executive Officer, may award a Deferred Stock Agreement.

     8.2  Standard Stock Bonus Awards.

          Stock Bonus Awards may be used as a part of a management incentive
program under which part of the annual performance bonus awarded to managers and
other key employees is made in Shares.  Shares covered by a Stock Bonus Award
are reserved for the benefit of the Employee who may elect to take either a
Current Award or a Deferred Award, unless the Employee is classified by the
Company as below Salary Grade 56, in which case only a Current Award will be
available.  Stock Bonus Awards will be dated the second day of the January
following the end of the fiscal year for which the Stock Bonus Award is granted,
or if the Company's fiscal year ends on January 2 or a later date, Stock Bonus
Awards for such fiscal year shall be dated the next day in January following the
end of such fiscal year.

               (a)  Method of Election. Each eligible Employee classified by the
Company as Salary Grade 56 or above may elect, in writing, on a form to be
furnished by the Company, to receive a Current Award or a Deferred Award. Each
eligible Employee who does not elect to take a Deferred Award within the time
designated by the Company will be granted a Current Award.

               (b)  Deferred Award.

                    (i)  Vesting. Except as otherwise provided at the time of
grant, the Shares granted in connection with a Deferred Award shall vest pro
rata in annual installments commencing one year after the date of the Stock
Bonus Award and continuing on each January 2 thereafter until the expiration of
a ten (10) year period from the commencement date.

               All Shares subject to Award vest upon (A) termination of
employment after reaching age fifty-five (55) with ten (10) years of Company
service, (B) termination of employment after twenty (20) years of Company
service

                                       24
<PAGE>

with retirement approval from the Committee (or its designee, in the case of
Employees who are not Officers), (C) Disability or (D) death. If employment
terminates for any reason other than as set forth above, all unvested Shares are
forfeited.

                    (ii) Distribution of Shares. Vested Shares will be
distributed to the Participant in two (2) to ten (10) consecutive, approximately
equal, annual installments, or over such shorter period as the Committee (or its
designee, in the case of Employees who are not Officers) may direct, commencing
in the month of January coincident with or following the date the Participant
terminates employment; provided, however, that to the extent permitted by Rule
16b-3 under the Exchange Act, the Participant may elect to receive his or her
vested Shares in a single payment which shall take place in the month of January
coincident with or following his or her termination. All elections made pursuant
to this Section shall be made in writing at the time the Stock Bonus Award is
granted. Upon the Participant's death, all undistributed vested Shares will be
distributed in a single distribution to the Participant's designated
beneficiaries or, in absence of such beneficiaries, to the Participant's estate,
unless the Committee in its sole discretion determines otherwise.

               (c)  Current Award.

                    (i)  Distribution of Shares. Shares subject to a Current
Award will be distributed in ten (10) consecutive, approximately equal, annual
installments commencing one year after the date of the Stock Bonus Award. If a
Participant dies prior to distribution of all Shares in the Stock Bonus Award,
the remaining shares will be distributed in a single distribution to the
Participant's designated beneficiaries or, in absence of such beneficiaries, to
the Participant's estate.

                    (ii) Termination of Employment. Except as otherwise provided
at the time of grant, any undistributed Shares subject to a Current Award will
be forfeited and the Stock Bonus Award relating thereto terminated if a
Participant's employment with the Company is terminated for any reason other
than (A) termination of employment at or beyond age fifty-five (55) with ten
(10) years of service, (B) termination of employment after 20 years of service
with retirement approval from the Committee (or its designee, in the case of
Employees who are not Officers), (C) Disability or (D) death. Any undistributed
Shares not subject to forfeiture shall continue to be distributed to the
Participant under the same distribution schedule which would have applied to
those Shares if the Participant had not terminated employment, or over such
shorter period as may be directed by the Committee (or its designee, in the case
of Participants who are not Officers or Covered Employees).

                                       25
<PAGE>

                    (iii) Cash Distribution in Lieu of Shares. Any Officer may
request, with respect to any pending distribution of Shares under a Current
Award, that in lieu of receiving Shares, a cash distribution be made in an
amount equivalent to the Fair Market Value of such Shares on the date of such
distribution. The Committee may grant or deny such request in its sole
discretion.

               (d)  Forfeiture. Shares not yet distributed under Current Awards
and Deferred Awards will be forfeited in the event any of the following
conditions occurs:

                    (i)   The Participant Competes with the Company, without
obtaining the Company's written consent;

                    (ii)  The Participant commits any criminal offense or
malicious tort relating to or against the Company; or

                    (iii) The Participant fails to provide the Committee or its
designee with a current address where the Stock Bonus Award may be distributed.

     8.3  Deferred Stock Agreements.

          Upon approval by the Committee, the Company may enter into a Deferred
Stock Agreement with a Participant, which Deferred Stock Agreement shall be
subject to the following conditions and to such other conditions as the
Committee may determine:

          (a)  Vesting. Shares of Deferred Stock subject to a Deferred Stock
Agreement shall contingently vest over a specified number of years, as
determined by the Committee or as otherwise provided by the Committee.
Notwithstanding the foregoing, all unvested Deferred Stock subject to a Deferred
Stock Agreement shall immediately vest upon the Participant's: (1) termination
of employment following attainment of age 55 with ten (10) Years of Service, (2)
termination of employment with twenty (20) years of Service with retirement
approval from the Committee, (3) termination of employment as a result of
Disability, or (4) termination of employment as a result of death. Subject to
Section 4.3 herein, unless otherwise provided in the Deferred Stock Agreement,
if the Participant's employment with the Company is terminated for any other
reason, all Deferred Stock which is not vested before such termination of
employment shall be forfeited and the Deferred Stock Agreement terminated
without payment.

          (b)  Distribution of Shares. Vested Shares of Deferred Stock subject
to a Deferred Stock Agreement will be distributed to the Participant in ten (10)
consecutive, approximately equal, annual installments, or over such shorter
period as the Committee may direct. Such distribution shall commence on January

                                       26
<PAGE>

2 coincident with or following the date (i) of the Retirement of the
Participant, (ii) of the Disability of the Participant or (iii) on which the
Participant attains age sixty-five (65) and is no longer employed by the
Company. Upon the Participant's death, all undistributed vested Shares will be
distributed in one distribution to the deceased Participant's designated
beneficiaries or, in absence of such beneficiaries, to the Participant's estate,
unless the Committee in its sole discretion determines otherwise.

          (c)  Forfeiture.  Shares not yet distributed under a Deferred Stock
Agreement shall be forfeited, and the Deferred Stock Agreement terminated, in
the event any of the following conditions occurs:

               (i)   The Participant Competes with the Company, without
obtaining the Company's written consent;

               (ii)  The Participant commits any criminal offense or malicious
tort relating to or against the Company; or

               (iii) The Participant fails to provide the Company with a current
address where the Shares may be distributed.

     8.4  Assignment.

          A Participant's rights under a Deferred Stock Agreement or Stock Bonus
Award may not, without the Company's written consent, be assigned or otherwise
transferred, nor shall they be subject to any right or claim of a Participant's
creditors, provided that the Company may offset any amounts owing to or
guaranteed by the Company, or owing to any credit union related to the Company,
against the value of Shares to be distributed under Deferred Stock Agreements
and Stock Bonus Awards.

     8.5  Lump Sum Payments.

          Notwithstanding anything in the Plan to the contrary, any Participant
entitled upon termination of employment to receive a distribution pursuant to
this Article VIII, the amount of which distribution has a total Fair Market
Value at the time of such termination of $3,000.00 or less, shall receive such
distribution in one lump sum as soon as possible following termination of
employment.

                                       27
<PAGE>

                                  ARTICLE IX
                                 OTHER AWARDS

     9.1  Stock Appreciation Rights.

          Subject to the terms and conditions of the Plan, the Committee may
grant Stock Appreciation Rights to Employees in such amounts, at such times and
upon such conditions as the Committee shall determine. A "Stock Appreciation
Right" is an Award in the form of a right to receive, upon surrender of the
right, but without other payment, an amount based on appreciation in the value
of Shares over a base price established in the Award, payable in cash, Shares or
such other form or combination of forms of payout, at times and upon conditions
as may be approved by the Committee. The minimum base price of a Stock
Appreciation Right granted under this Plan shall be not less than the lowest of
the Fair Market Value of the underlying Shares on the date the Stock
Appreciation Right is granted or, if the base price of a Stock Appreciation
Right is reduced by amendment, the Fair Market Value of the Shares on the date
of the amendment, or, in the case of a Stock Appreciation Right related to an
Option (whether already outstanding or concurrently granted), the Option Price
of the related Option. All Stock Appreciation Rights granted at a base price not
less than Fair Market Value on the date of grant shall be treated as
Performance-Based Awards subject to the applicable restrictions under Article X.

     9.2  Other Stock-Based Awards.

          The Committee may from time to time grant Awards under this Plan that
provide the Participant with Shares or the right to purchase Shares or provide
other incentive Awards (including, but not limited to, phantom stock or units,
performance stock or units, bonus stock, dividend equivalent units or similar
securities or rights) that have a value derived from the value of, or an
exercise or conversion privilege at a price related to, or that are otherwise
payable in, Shares. Such stock-based Awards shall be in a form determined by the
Committee, provided that the stock-based Awards shall not be inconsistent with
the other express terms of this Plan. All stock-based Awards under this Article
IX to Covered Employees that are either granted or become vested, exercisable or
payable based on attainment of one or more of the Performance Goals shall only
be granted as Performance-Based Awards under Article X.

     9.3  Assignment.

          A Participant's rights to Stock Appreciation Rights and stock-based
Awards granted under this Article IX may not, without the Company's written

                                       28
<PAGE>

consent, be assigned or otherwise transferred, nor shall they be subject to any
right or claim of a Participant's creditors, provided that the Company may
offset any amounts owing to or guaranteed by the Company, or owing to any credit
union related to the Company, against the value of Stock Appreciation Rights and
stock-based Awards to be distributed under this Plan.

                                       29
<PAGE>

                                   ARTICLE X
                        PERFORMANCE-BASED COMPENSATION

     10.1  Performance-Based Awards.

           Without limiting the generality of the foregoing, any of the type of
Awards available under this Plan may be granted to Covered Employees as awards
that satisfy the requirements for "performance-based compensation" within the
meaning of Section 162(m) of the Code ("Performance-Based Awards"), the grant,
vesting, exercisability or payment of which depends on the degree of achievement
of the Performance Goals relative to preestablished targeted levels (based on
the performance measures described in Section 10.3 hereof) on a Company-wide,
business unit and/or individual basis. Notwithstanding anything contained in
this Article X to the contrary, any Option or Stock Appreciation Right shall be
subject only to the requirements of Sections 4.1 and 10.2 in order for such
Awards to satisfy the requirements for Performance-Based Awards under this
Article X. With the exception of any Option or Stock Appreciation Right, an
Award that is intended to satisfy the requirements of this Article X shall be
designated as a Performance-Based Award at the time of grant.

     10.2  Eligible Class.

           The eligible class of persons for Awards under this Article X shall
be all Employees.

     10.3  Performance Measures.

           Unless and until the Committee proposes for shareholder vote and
shareholders approve a change in the general performance measures set forth in
this Section 10.3, the attainment of which may determine the degree of grant,
exercisability, payout and/or vesting with respect to Awards (other than Options
and Stock Appreciation Rights) granted to Covered Employees which are designed
to qualify as Performance-Based Awards, the performance measure(s) to be used
for purposes of such Awards shall be chosen by the Committee from among the
following alternatives:

               (a)  Consolidated cash flows,

               (b)  Consolidated financial reported earnings,

               (c)  Consolidated economic earnings,

               (d)  Earnings per share,

                                       30
<PAGE>

               (e)  Earnings as a percentage of average capital,

               (f)  Earnings as a multiple of interest expense,

               (g)  Business unit financial reported earnings,

               (h)  Business unit economic earnings,

               (i)  Business unit cash flows,

               (j)  Appreciation in the Fair Market Value of Shares either alone
or as measured against the performance of the stocks of a group of companies
approved by the Committee, and

               (k)  Total capital invested in assets.

               In the event that applicable tax and/or securities laws permit
the Committee discretion to alter the governing performance measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards which do not qualify for the Performance-Based Awards or to make
modifications that would not satisfy the requirements to qualify as Performance-
Based Awards, the Committee may make such grants or modifications without
satisfying the requirements of Section 162(m) of the Code.

               The specific performance target(s) with respect to Performance
Goal(s) must be established by the Committee in advance of the deadlines
applicable under Section 162(m) of the Code and while the performance relating
to the Performance Goal(s) remains substantially uncertain.

     10.4  Committee Certification.

           Before any Performance-Based Award under this Article X (other than
Options and Stock Appreciation Rights) is paid, the Committee must certify in
writing (by resolution or otherwise) that the applicable Performance Goal(s) and
any other material terms of the Performance-Based Award were satisfied.

     10.5  Terms and Conditions of Awards; Committee Discretion to Reduce
     Performance Awards.

           The Committee shall have discretion to determine the conditions,
restrictions or other limitations, in accordance with the terms of this Plan and
Section 162(m) of the Code, on the payment of individual Performance-Based
Awards under this Article X.  To the extent set forth in an Award agreement, the
Committee may reserve the right to reduce the amount payable in accordance with

                                       31
<PAGE>

any standards or on any other basis (including the Committee's discretion), as
the Committee may impose; provided, however, that Awards which are designed to
qualify as Performance-Based Awards, and which are held by Covered Employees,
may not be adjusted upward (the Committee may retain the discretion to adjust
such Awards downward).

     10.6  Adjustments for Material Changes.

           In the event of (i) a change in corporate capitalization, a corporate
transaction or a complete or partial corporate liquidation, or (ii) any
extraordinary gain or loss or other event that is treated for accounting
purposes as an extraordinary item under generally accepted accounting
principles, or (iii) any material change in accounting policies or practices
affecting the Company and/or the Performance Goals or targets, then, to the
extent any of the foregoing events (or a material effect thereof) was not
anticipated at the time the targets were set, the Committee may make adjustments
to the Performance Goals and/or targets, applied as of the date of the event and
based solely on objective criteria, so as to neutralize, in the Committee's
judgment, the effect of the event on the applicable Performance- Based Award.

     10.7  Interpretation.

           Except as specifically provided in this Article X, the provisions of
this Article X shall be interpreted and administered by the Committee in a
manner consistent with the requirements for exemption of Performance-Based
Awards granted to Covered Employees as "performance-based compensation" under
Section 162(m) of the Code and regulations and other interpretations issued by
the Internal Revenue Service thereunder.

     10.8  Financial and Accounting Terms.

           Except as otherwise expressly provided or the context otherwise
requires, financial and accounting terms, listed herein as Performance Goals,
are used as defined for purposes of, and shall be determined in accordance with,
generally accepted accounting principles and as derived from the audited
consolidated financial statements of the Company, prepared in the ordinary
course of business.

                                       32
<PAGE>

                                  ARTICLE XI
                          SPECIAL RECOGNITION AWARDS

          Subject to the terms and conditions of the Plan, the Committee (in the
case of Officers) or its designee (in the case of Participants who are not
Officers) may, at any time and from time to time, grant Special Recognition
Awards to Employees in such amounts and upon such conditions as the Committee or
its designee, as applicable, shall determine.  If a Special Recognition Award is
in the form of Shares, then such Shares shall become freely transferable by the
Participant on the date of grant of such Special Recognition Award or on such
other date as the Committee or its designee, as applicable, shall determine.  If
a Special Recognition Award is in the form of an option to purchase Shares, then
the terms and conditions for the exercise of such option (including, but not
limited to, the exercise price, vesting, expiration, manner of exercise, etc.)
shall be such as the Committee or its designee, as applicable, shall determine;
provided, however, that the exercise price for each Share deliverable upon the
exercise of an option granted as a Special Recognition Award pursuant to this
Article XII shall not be less than the Fair Market Value of the stock as
determined by the Committee or its designee, as applicable, on the date such
Special Recognition Award is granted.

                                       33
<PAGE>

                                  ARTICLE XII
                    AMENDMENT, MODIFICATION AND TERMINATION

          The Committee may terminate, amend or modify the Plan. Termination,
amendment or modification of the Plan may be in response to changes in the Code,
the Exchange Act or national securities exchange regulations, or for other
reasons deemed appropriate by the Committee. However, without the requisite
approval of the shareholders of the Company, no such termination, amendment or
modification may:

          (a)  Materially increase the total number of Shares which may be
issued under this Plan, or the total number of Shares for which Options may be
granted under this Plan, except as provided in Section 4.3 hereof; or

          (b)  Materially modify the requirements as to eligibility for
participation in the Plan; or

          (c)  Extend the maximum period after the date of grant during which
Options may be exercised; or

          (d)  Change the provisions of the Plan regarding Option Price or the
exercise of Options, except as provided in Section 4.3 or Section 6.2 hereof or
modify the Plan in a manner inconsistent with Rule 16b-3 under the Exchange Act,
Sections 422-424 of the Code or Section 162(m) of the Code.

          The termination or any modification or amendment of the Plan shall
not, without the consent of the Participant, affect a Participant's rights under
an Award previously granted to the Participant; provided, however, that in the
event of a transaction described in Section 4.3 hereof, the authority of the
Committee (or, if another legal entity assumes the obligations of the Company
hereunder, of the board of directors, compensation committee or similar body of
such other legal entity, as applicable) in taking the actions permitted or
required by Section 4.3 hereof shall not be eliminated or diminished in any way
by this sentence. With the consent of the affected Participant, the Committee
may amend an outstanding Award agreement in a manner consistent with the Plan.

                                       34
<PAGE>

                                 ARTICLE XIII
                               TAX WITHHOLDINGS

          The Company shall have the power and the right to deduct or withhold,
or require a Participant to remit to the Company, an amount sufficient to
satisfy Federal, state and local taxes (including the Participant's FICA
obligation), required by law or regulation to be withheld with respect to any
grant, exercise or payment made under or with respect to any taxable event
arising as a result of this Plan. With respect to withholding required upon the
exercise of Options, upon the lapse of restrictions on Restricted Stock, the
distribution of Deferred Stock or upon any other taxable event arising as a
result of Awards granted hereunder, the Company may require, or the Committee
may permit a Participant to elect, that the withholding requirement be
satisfied, in whole or in part, by having the Company withhold Shares having a
Fair Market Value on the date the tax is to be determined equal to the minimum
statutory total tax which could be withheld on the transaction. Any election by
a Participant shall be irrevocable, made in writing, signed by the Participant,
and shall be subject to any restrictions or limitations that the Committee, in
its sole discretion, deems appropriate.

                                       35
<PAGE>

                                  ARTICLE XIV
                                INDEMNIFICATION

          Each Person who is or shall have been a member of the Committee, or of
the Board, shall be indemnified and held harmless by the Company against and
from any loss, cost, liability or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit or proceeding against him or her, provided he
or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend the same on his
or her own behalf. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such Persons may be entitled
under the Company's Certificate of Incorporation or Bylaws, as a matter of law
or otherwise, or any power that the Company may have to indemnify them or hold
them harmless.

                                       36
<PAGE>

                                  ARTICLE XV
                                  SUCCESSORS

          All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.

                                       37
<PAGE>

                                  ARTICLE XVI
                              REQUIREMENTS OF LAW

     16.1  Requirements of Law.

           The granting of Awards and the issuance of Shares under this Plan
shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required.

     16.2  Governing Law.

           To the extent not preempted or otherwise governed by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Maryland without regard to the State of
Maryland's choice of law rules.

     16.3  Plan Construction.

           It is the intent of the Company that this Plan satisfy and be
interpreted in a manner that complies with the applicable requirements of Rule
16b-3 or its successors under the Exchange Act so that insiders will be entitled
to the benefits of Rule 16b-3 or other exemptive rules under Section 16 of the
Exchange Act and will not be subjected to avoidable liability thereunder.  Any
contrary interpretation of the Plan shall be avoided.

                                       38
<PAGE>

                           CERTIFICATE OF SECRETARY

          I, the undersigned secretary of Crestline Capital Corporation  (the
"Company"), do hereby certify that the attached copy of the Crestline Capital
Corporation 1998 Comprehensive Stock Incentive Plan is a true and correct copy
of the Plan and that there have been no amendments or modifications to the Plan
that are not reflected in this copy.

          IN WITNESS WHEREOF, I have hereunto set my hand and seal of Crestline
Capital Corporation as of the 15th day of September, 1999.

                                         ___________________________________
                                         Secretary

                                       39<PAGE>

                                                                   Exhibit 10.14

                         CRESTLINE CAPITAL CORPORATION

                               CHANGE IN CONTROL

                              SEPARATION PAY PLAN
<PAGE>

                         CRESTLINE CAPITAL CORPORATION
                               CHANGE IN CONTROL
                              SEPARATION PAY PLAN

                                   ARTICLE 1
                                    General
                                    -------

     1.1  Purpose.  Crestline Capital Corporation (the "Company") has
          -------
established the Crestline Capital Corporation Change in Control Separation Pay
Plan (the "Plan") to retain employees and to provide, under certain
circumstances, severance to participants whose employment with the Company Group
ends after a Change in Control.

     1.2  Funding.  The Company will pay Plan benefits from its general assets
          -------
and will bear all expenses of administering the Plan.

     1.3  Effective Date.  This Plan is effective for covered employment
          --------------
terminations between June 25, 1999 (the "Effective Date") and December 31, 2001
(the "Plan Termination Date").  If benefits are paid under this Plan, those
benefits replace and supersede any and all prior severance or separation pay
arrangements for the recipients, other than those contained in individual
contracts with Employees of the Company Group.

                                   ARTICLE 2
                                  Definitions
                                  -----------

     2.1  Administrator means the Compensation Policy Committee of the Board or
          -------------
such other person or committee the Board appoints.

     2.2  Base Salary means a Participant's annualized salary determined using
          -----------
the greater of the Participant's rate of pay in effect on his or her employment
termination date or on the date of completion of a Change in Control, excluding
(i) overtime, (ii) employer contributions to, or distributions from, any
pension, profit sharing or other employee benefit or deferred

                                      -2-
<PAGE>

compensation plan maintained by the Company or its affiliates, (iii) bonuses,
and (iv) any special or one-time payments to employees such as car or relocation
allowances, imputed income, or payments under this Plan. Base Salary includes
amounts a Participant contributes under a salary reduction agreement to a plan
meeting the requirements of Section 125 or 401(k) of the Internal Revenue Code
of 1986, as amended (the "Code"). For an employee compensated on an hourly
basis, Base Salary means his or her then current hourly rate times his or her
regularly scheduled annual work hours.

     2.3  Beneficial Ownership and Beneficially Owned for purposes of this Plan
          -------------------------------------------
have the meanings provided in Exchange Act Rule 13d-3.

     2.4  Board means the Board of Directors of Crestline Capital Corporation.
          -----

     2.5  Cause means any of the following:
          -----

          (a)  an Employee's willful failure or gross negligence with respect to
               his or her assigned duties for the Company or the Company Group,
               which negligence or failure continues for more than 30 days after
               he or she receives written notice of actions or inactions
               constituting such willful failure or gross negligence,

          (b)  an Employee's being convicted of or entering a plea of guilty or
               no contest to a felony, or

          (c)  an Employee's dishonesty, embezzlement, or fraud committed in
               connection with his employment.

                                      -3-
<PAGE>

          Cause does not include ordinary negligence or failure to act, whether
          due to an error in judgment or otherwise, if Employee has exercised
          substantial efforts in good faith to perform the duties reasonably
          assigned or appropriate to his position.

     2.6  Change in Control means any of the following events:
          -----------------

          (a)  The ownership or acquisition (whether by a merger contemplated by
               Section 2.6(b) below or otherwise) by any Person (other than a
               Qualified Affiliate), in a single transaction or a series of
               related or unrelated transactions, of Beneficial Ownership of 35%
               or more of either

               (I)  the Company's outstanding common stock (the "Company Common
                    Stock") or

               (II) the combined voting power of the Company's outstanding
                    securities entitled to vote generally in the election of
                    directors (the "Outstanding Company Voting Securities");

          (b)  The merger or consolidation of the Company with or into any other
               Person other than a Qualified Affiliate, if, immediately
               following the effectiveness of such merger or consolidation,
               Persons who did not Beneficially Own Outstanding Company Voting
               Securities immediately before the effectiveness of such merger or
               consolidation directly or indirectly Beneficially Own more than
               35% of the outstanding shares of voting stock of the surviving
               entity of such merger or consolidation (including for such
               purpose in both the numerator and denominator, shares

                                      -4-
<PAGE>

               of voting stock issuable upon the exercise of then outstanding
               rights (including conversion rights), options, or warrants)
               ("Resulting Voting Securities"), provided that --

               (I)  for purposes of this subsection (b), if a Person who
                    Beneficially Owned Company Voting Securities immediately
                    before the merger or consolidation Beneficially Owns a
                    greater number of the Resulting Voting Securities
                    immediately after the merger or consolidation than the
                    number the Person received solely as a result of the merger
                    or consolidation, that greater number will be treated as
                    held by a Person who did not Beneficially Own Company Voting
                    Securities before the merger or consolidation; and

               (II) such merger or consolidation would also constitute a Change
                    in Control if it would satisfy the foregoing test if rights,
                    options, and warrants were not included in the calculation;

          (c)  Any one or a series of related sales or conveyances to any Person
               other than any one or more Qualified Affiliates of all or
               substantially all of the Company's assets (but excluding sales or
               conveyances in connection with either the normal expiration or
               other termination of the hotel leases with Host Marriott

                                      -5-
<PAGE>

               Corporation or its affiliates or the termination of the hotel
               leases following a tax law change that would permit Host Marriott
               Corporation or another entity or entities in which Host Marriott
               Corporation owns a substantial economic interest to operate all
               or substantially all the hotels Host Marriott Corporation or such
               entity or entities owns without adversely affecting Host Marriott
               Corporation's qualification for taxation as a real estate
               investment trust under applicable Code provisions);

          (d)  at any point between the Effective Date and the Plan Termination
               Date, Incumbent Directors cease to be a majority of the members
               of the Board, where an "Incumbent Director" is (i) an individual
               who is a member of the Board on the Effective Date or (ii) any
               new director whose appointment or election by the Board or whose
               nomination for election by the stockholders was approved by a
               majority of the persons who were already Incumbent Directors,
               other than any individual who assumes office initially as a
               result of an actual or threatened election contest with respect
               to the election or removal of directors or other actual or
               threatened solicitation of proxies or consents by or on behalf of
               a Person other than the Board; or

          (e)  Any other event that the Board determines, in its discretion and
               with reference to "Change in Control," would materially alter the
               structure or business of the Company or its ownership.

          A Change in Control will also be deemed to have occurred immediately
          before the completion of a tender offer for the Company's securities
          representing more

                                      -6-
<PAGE>

          than 35% of the Company Outstanding Securities, other than a tender
          offer by a Qualified Affiliate.

     2.7  Company Group means Crestline Capital Corporation and any majority-
          -------------
owned subsidiaries and any other entities the Administrator designates.

     2.8  Credited Year of Service means a year of employment with the Company,
          ------------------------
counting back from the date of employment termination to the same date in the
preceding year and counting service with the Company, Host Marriott Corporation,
and Marriott International, Inc. (to the extent the Company counts such service
for other benefits purposes).

     2.9  Employee means a common-law employee of the Company Group.
          --------

     2.10 ERISA means the Employee Retirement Income Security Act of 1974, as
          -----
amended.

     2.11 Exchange Act means the Securities Exchange Act of 1934.
          ------------

     2.12 Excluded Employee means
          -----------------

          (a)  anyone employed in the Asset Management Department of the
               Company;

          (b)  anyone designated as an "intern" or a "temporary employee," while
               that employment category continues;

          (c)  anyone designated as an independent contractor, even if later
               found to be an employee;

          (d)  anyone with an employment contract that provides for severance;

                                      -7-
<PAGE>

          (e)  anyone employed under a contract that provides a specified term
               of employment, even if the parties agree to extend the term or
               the person remains at work after expiration of the term; and

          (f)  anyone employed as of the Effective Date by any entity that the
               Company acquires or merges with or into after that date (even if
               later deemed to be employed by the Company as of the Effective
               Date because of the crediting of prior service or for some other
               reason).

                                      -8-
<PAGE>

     2.13  Good  Reason means, without the Participant's consent,
           ------------

           (a) the assignment of substantial duties or responsibilities not
               suitable for the Employee's position or some other action that
               results in a substantial diminution of duties or
               responsibilities;

           (b) a required relocation of the Employee's principal workplace
               outside a 75 mile radius centered on the workplace as of the
               Effective Date (or such later workplace at which the Employee
               consents to work as his or her principal workplace);

           (c) the Company's failure to pay the Employee any Base Salary or
               other compensation to which he is entitled, other than an
               inadvertent failure the Company remedies within 30 days after the
               Employee notifies the Company in writing (or 5 days for failure
               to pay Base Salary); or

           (d) a substantial reduction in the Employee's aggregate Base Salary
               and other compensation taken as a whole, excluding any reductions
               caused by the failure to achieve performance targets.

     2.14  Other Employee means an Employee who, immediately before the Change
           --------------
in Control, is at Grade 55 or below (or, if the grades change after the
Effective Date, below the level of vice president).

     2.15  Participant means an Employee who meets the participation
           -----------
requirements of Article 3 or a former Employee who is entitled to receive or is
receiving benefits hereunder.

                                      -9-
<PAGE>

     2.16  Person means any individual, entity, or group (within the meaning of
           ------
Section 13(d)(3) or 14(d)(2) of the Exchange Act), including any natural person,
corporation, trust, association, company, partnership, joint venture, limited
liability company, legal entity of any kind, government, or political
subdivision, agency, or instrumentality of a government.  "Person" also means
two or more Persons acting as a partnership, limited partnership, syndicate, or
other group for the purpose of acquiring, holding, or disposing of securities of
the Company.

     2.17  Plan Year means a twelve-month period beginning on January 1 and
           ---------
ending on the following December 31, except that the initial Plan Year is the
period beginning on the Effective Date and ending on the following December 31.

     2.18  Qualified Affiliate means
           -------------------

           (a) any directly or indirectly wholly owned subsidiary of the
               Company,

           (b) any employee benefit plan (or related trust) sponsored or
               maintained (i) by the Company or (ii) by any entity controlled by
               the Company, or

           (c) any Person consisting of one or more individuals who are then the
               Company's chief executive officer or any other named executive
               officer (as defined in Item 402 of Regulation S-K under the
               Securities Act of 1933) of the Company as indicated in its most
               recent securities filing made before the date of the
               transaction).

     2.19  Senior Executive means an Employee who, immediately before the Change
           ----------------
in Control, is at Grade 56 and above (including Bands 2-4), provided that, if
the grades change, a Senior Executive means someone at or above the level of
vice president.

                                      -10-
<PAGE>

     2.20  Severance Period means a number of months equal to the number of
           ----------------
Credited Years of Service, provided that the Severance Period will (i) be a
minimum of three and a maximum of 12 months for Other Employees and (ii) be 12
months for Senior Executives.

                                   ARTICLE 3
                                 Participation
                                 -------------

     3.1   Participation Requirements.  All Employees who became employed on or
           --------------------------
before the Effective Date are eligible for this Plan, other than Excluded
Employees.  The Administrator can, in its sole discretion, add to the Plan
Employees hired after the Effective Date on either a case-by-case or group basis
but cannot remove Employees from participation.  Persons eligible are referred
to as "Participants."

     3.2   Cessation and Resumption of Participation.  Participation of any
           -----------------------------------------
Participant will cease on the earlier of (a) the date on which the Plan
terminates or (b) the later of (i) the date on which the Participant ceases to
be an Employee or (ii) the date on which the Participant's benefit payment from
the Plan is made.  Any Participant who leaves employment and returns to
employment within one year of leaving such employment but does not receive
benefits under this Plan will return to participation in this Plan.  Anyone
returning more than one year after termination or returning after receiving
benefits will be treated as a new Employee and thus will not be eligible for
this Plan.

                                   ARTICLE 4
                           Eligibility for Benefits
                           ------------------------

     4.1   Separation Events.  An Employee will be eligible for the benefits
           -----------------
provided in Section 5.1 or 5.2 if, within 12 months after completion of a Change
in Control,

           (a)  For a Senior Executive,

                                      -11-
<PAGE>

               (i)  he or she gives at least 30 days' (10 days' for Company's
                    failure to pay Base Salary) advance written notice of
                    resignation as a result of Good Reason and resigns at the
                    conclusion of such notice period (or earlier, if the Company
                    agrees in writing to an earlier resignation date) or

               (ii) the Company terminates his or her employment without Cause,
                    or

          (b)  For an Other Employee, the Company terminates his or her
               employment without Cause or because of a mass layoff

unless the Company concurrently gives or has previously given the Senior
Executive or Other Employee notice of Cause for termination.

     4.2  Administrator to Determine Eligibility.  The Administrator will
          --------------------------------------
determine in good faith whether or not a separation event described in Section
4.1 has occurred with respect to a Participant.  The Administrator can require a
Participant to execute a satisfactory waiver and release as a condition to
receipt of benefits.

     4.3  Death or Disability.  A Participant whose employment ends because of
          -------------------
death or disability is not entitled to benefits under this Plan.

                                   ARTICLE 5
                        Amount and Payment of Benefits
                        ------------------------------

     5.1  Amount of Separation Benefits for Senior Executives.  A Participant
          ---------------------------------------------------
who qualifies for benefits under Section 4.1 as a Senior Executive will receive
the following:

                                      -12-
<PAGE>

          (a)  severance equivalent to one month's Base Salary for each month in
               the Severance Period (12 months) payable periodically as though
               the Participant had remained employed for that period, and the
               Participant's accrued but unused PTO (paid time off) calculated
               at his or her then Base Salary;

          (b)  continued payment by the Company for the Participant's life,
               health, and disability insurance coverage during the Severance
               Period to the same extent the Company paid for such coverage
               immediately before termination and subject to the eligibility
               requirements and other terms and conditions of such insurance
               coverage (or, if the coverage becomes unavailable during the
               Severance Period, the Company will then be obligated only to pay
               the Participant an amount equal to the employer premiums for such
               insurance for the remainder of the Severance Period);

          (c)  vesting as of the last day of employment in any unvested portion
               of any stock option, restricted stock, and deferred stock and all
               rights under other deferred compensation arrangements; and

          (d)  a pro-rata share of any performance bonus to which the
               Participant would otherwise have been entitled for the fiscal
               year in which his or her employment ends, with the proration
               based on the portion of the fiscal year before the Participant's
               employment ended and with the bonus paid within 60 days following
               the end of the fiscal year in which the termination occurs.

                                      -13-
<PAGE>

          Benefits under Section 4.1 are in lieu of all other severance, except
          as required by law.  The benefits in Section 5.1 will be reduced by
          any payments due under the Workers Adjustment and Retraining
          Notification Act (WARN Act).

     5.2  Amount of Separation Benefits for Other Employees.  A Participant who
          --------------------------------------------------
qualifies for benefits under Section 4.1 as an Other Employee will receive the
following:

          (a)  severance equivalent to one month's Base Salary for each month in
               the Severance Period payable periodically as though the
               Participant had remained employed for that period, and the
               Participant's accrued but unused PTO (paid time off) calculated
               at his or her then Base Salary;

          (b)  continued payment by the Company for the Participant's health
               insurance coverage during the Severance Period to the same extent
               the Company paid for such coverage immediately before termination
               and subject to the eligibility requirements and other terms and
               conditions of such insurance coverage (or, if the coverage
               becomes unavailable during the Severance Period, the Company will
               then be obligated only to pay the Participant an amount equal to
               the employer premiums for such insurance for the remainder of the
               Severance Period);

          (c)  vesting as of the last day of employment in any unvested portion
               of any stock option, restricted stock, and deferred stock and all
               rights under other deferred compensation arrangements and;

                                      -14-
<PAGE>

          (d)  a pro-rata share of any performance bonus to which the
               Participant would otherwise have been entitled for the fiscal
               year in which his or her employment ends, with the proration
               based on the number of months in the Severance Period divided by
               12 and with the bonus paid within 60 days following the end of
               the fiscal year in which the termination occurs.

          Benefits under Section 4.1 are in lieu of all other severance, except
          as required by law.  The benefits in Section 5.2 will be reduced by
          any payments due under the Workers Adjustment and Retraining
          Notification Act (WARN Act).

     5.3  Tax Law Limits.  A Participant whose benefits under Section 5.1 or 5.2
          --------------
by themselves or together with other payments cause him or her to incur or be
likely to incur an excise tax under Section 4999 of the Code may elect to have
those benefits reduced by the Company in the manner the Administrator reasonably
selects to a level not likely to cause the Participant to incur taxes under
Section 4999 of the Code if the effect of reducing benefit payments would, net
of the tax under Section 4999 of the Code, otherwise likely leave the
Participant in a better position than would receiving the full benefits.

     5.4  Withholding.  All payments under this Plan will be reduced by any
          -----------
applicable tax and other required withholdings.

     5.5  Claims Procedure and Arbitration.
          --------------------------------

          (a)  A Participant who does not automatically receive his or her
               benefit under the Plan may apply for Plan benefits by filing with
               the Administrator a signed, written application specifically
               identifying the benefits requested

                                      -15-
<PAGE>

               and describing all facts and circumstances entitling him or her
               to payment of benefits.

          (b)  Within 90 days after receipt of an application for benefits, the
               Administrator must notify the Participant of the Administrator's
               decision.  If the claim is denied in whole or in part, the
               Administrator's notice of denial must be in writing and must
               give:

               (i)   the specific reasons for denial with specific reference to
                     pertinent Plan provisions upon which the denial was based;

               (ii)  a description of any additional materials or information
                     necessary for the Participant to perfect the claim and an
                     explanation of why the materials or information are
                     necessary; and

               (iii) an explanation of the Plan's claim review procedure.

          (c)  For a period of 60 days after receiving the Administrator's
               notice of denial, a Participant or his or her duly authorized
               representative may:

               (i)   review pertinent documents; and

               (ii)  submit a written request to the Administrator for review of
                     the denial.

               A Participant submitting a request for review will be allowed to
               submit issues and comments in writing to the Administrator.

                                      -16-
<PAGE>

          (d)  The Administrator will afford any Participant so requesting a
               full and fair review of the decision denying his or her claim.
               The Administrator must issue a written decision to the
               Participant within sixty days after receipt of the request for
               review (unless special circumstances require an extension of
               time, in which case a decision must be rendered as soon as
               possible but no later than 120 days after the request for
               review).  The Administrator's decision must give specific reasons
               for the decision, written in a manner calculated to be understood
               by the Participant and must include specific references to the
               pertinent Plan provisions upon which the decision is based.

          (e)  Arbitration.  Any disputes not resolved by the foregoing
               procedure may be submitted by either a Participant or the Company
               to mandatory arbitration in Maryland before a single arbitrator
               under the Commercial Arbitration Rules of the American
               Arbitration Association, or its successor, then in effect.  The
               arbitrator's decision must be rendered in writing, will be final,
               and may be entered as a judgment in any court in the State of
               Maryland.  The Company and any Participant seeking benefits under
               this Plan irrevocably consent for this purpose to the
               jurisdiction of the federal and state courts located in Maryland.
               Each party is responsible for its or his or her own costs
               incurred in such arbitration and in enforcing any arbitration
               award, including attorneys' fees and expenses.

                                   ARTICLE 6
                                Administration
                                --------------

                                      -17-
<PAGE>

     6.1  Administrator.  The Board will name an Administrator of the Plan, who
          -------------
will be a fiduciary with respect to the Plan.  The Administrator will serve at
the pleasure of the Board and may be removed by the Board at any time with or
without cause.  If the Board removes the Compensation Policy Committee as
Administrator and fails to appoint another Administrator, the Vice President,
Human Resources will be the Administrator.

     6.2  Power and Duties of Administrator.  The Administrator will have
          ---------------------------------
authority to control and manage operation and administration of the Plan,
including all rights and powers necessary or convenient to carry out his or her
functions hereunder, whether or not such rights and powers are specifically
enumerated herein.  In particular, except as otherwise exercised by the Board,
the Administrator has the sole and exclusive discretion, authority, and
responsibility for administering, construing, and interpreting the provisions of
the Plan and making all determinations concerning the Plan.  In establishing the
Administrator's discretion, authority, and responsibility, the Company intends
to grant the Administrator the broadest possible powers to interpret and
administer the Plan so that judicial or other review of Administrator decisions
is limited to the extent allowed by law and so that maximum deference is given
to all Administrator decisions under or relating to the Plan.

     Without limiting the generality of the foregoing, and in addition to the
other powers set forth in this Plan, the Administrator will have the following
express authority:

          (a)  To construe and interpret the Plan and decide all questions of
               eligibility for participation and benefits, consistent with the
               express terms of the Plan;

                                      -18-
<PAGE>

          (b)  To prescribe procedures to be followed by Participants for
               applying for benefits hereunder;

          (c)  To prepare and distribute, in such manner as the Administrator
               determines to be necessary or appropriate, information explaining
               the Plan; and

          (d)  To receive from the Company Group and from Participants such
               information as is necessary for proper administration of the
               Plan.

     6.3  Administrator as Participant.  The Administrator may also be a
          ----------------------------
Participant, but he or she is not permitted to make any discretionary decision
or take any action affecting him or her as a Participant unless such decision or
action is upon a matter that affects all other similarly situated Participants
and confers no special right, benefit, or privilege on the Administrator not
simultaneously conferred upon such other Participants.

     6.4  Records and Reports.  The Administrator will take any actions he or
          -------------------
she deems necessary or appropriate to comply with laws and regulations relating
to maintenance of records, notification to Participants, reports to the United
States Department of Labor, and all other requirements applicable to the Plan.

     6.5  Designation of Other Persons.  The Administrator may designate other
          ----------------------------
persons to carry out a specified part or parts of his or her responsibilities
hereunder (including the power to designate other persons to carry out a
specified part of such designated responsibility).

     6.6  Indemnification.  The Company will, to the extent not inconsistent
          ---------------
with or in violation of its by-laws and the laws of its state of incorporation,
indemnify and hold harmless any director, corporate officer or employee involved
in the administration of the Plan from any

                                      -19-
<PAGE>

and all claims, loss, damages, expense (including reasonable counsel fees), and
liability (including any amounts paid in settlement with the Company's approval)
arising out of any act or omission of such person incurred in the administration
of the Plan. The Company will not indemnify any person whose conduct is
determined to be knowing or willful misconduct. The Company may purchase such
policy or policies of liability insurance as it deems necessary and appropriate
to protect any person involved in the administration of the Plan from any
liability that may be incurred or is a result of the performance of
administrative duties, other than liability arising out of knowing or willful
misconduct of such person.

                                   ARTICLE 7
                         Plan Amendment or Termination
                         -----------------------------

     7.1  Amendment and Termination.  The Company forgoes any right before
          -------------------------
January 1, 2002 to amend the Plan in a manner adverse to Participants.  Any
purported amendment or termination inconsistent with the preceding sentence will
be treated as entitling Participants to benefits under the Plan without the
requirement of resigning from employment.  Subject to the foregoing, the Board
reserves the right to amend the Plan as it deems necessary or advisable.  The
Plan will terminate at midnight Eastern Time on the Plan Termination Date, and
no Participant not already entitled to or currently receiving benefits will
receive benefits under this Plan after that date.

     7.2  Form of Amendment.  Any Plan amendment may only be made by an
          -----------------
instrument in writing and signed by a duly authorized officer or officers of the
Company certifying that the amendment has been authorized and directed by
resolution of the Board.

                                      -20-
<PAGE>

                                   ARTICLE 8
                                 Miscellaneous
                                 -------------

     8.1  No Guarantee or Contract of Employment, etc.  Neither the creation of
          -------------------------------------------
the Plan nor anything contained herein should be construed as giving any
Participant or other individual any contract of employment, any other right to
remain in the employ of the Company Group or to be dismissed only for cause
(whether or not such cause would constitute Cause under this Plan), any
equitable or other interest in the assets, business, or affairs of the Company
Group, or any right to challenge any action taken or policy adopted or pursued
by the Company Group.

     8.2  Controlling Law.  The terms of the Plan and the rights and duties of
          ---------------
all parties hereto or persons affected hereby must be construed and determined
according to ERISA.  To the extent that ERISA does not apply, the laws of the
State of Maryland apply.  The Company intends the Plan to be an employee welfare
benefit plan as described in Section 3(1) of ERISA.  In the event of any
ambiguity in the Plan, the interpretation of the Administrator will be binding
for all purposes; provided, however, that the Plan must always be construed in
compliance with applicable law.

     8.3  Nonalienation of Benefits.  No right or benefit provided by this Plan
          -------------------------
may be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge the same will be
void.  No such right or benefit is liable for or subject to the debts,
contracts, liabilities, engagements, or torts of any person entitled to such
right or benefit.  No such right or benefit may be subject to garnishment,
attachment, execution, or levy of any kind.

                                      -21-
<PAGE>

     8.4  Severability.  If any provision of the Plan is held illegal or invalid
          ------------
for any reason, such illegibility or invalidity will not affect the remaining
parts of the Plan, and the Plan will be construed and enforced as if the illegal
and invalid provision were not included.

     8.5  Participants as Unsecured Creditors.  Participants will be unsecured
          -----------------------------------
general creditors of the Company with respect to any rights derived from the
existence of the Plan.  Title to and beneficial ownership of any Company assets
which may be used to satisfy the Company's obligation to make payment of the
compensation or benefits provided hereunder will remain solely the property of
the Company.

     8.6  Successors and Assigns.  The Plan will inure to the benefit of and
          ----------------------
bind each successor and assign of the Company.  All obligations imposed upon a
Participant, and all rights granted to the Company Group hereunder, will bind
the Participant's heirs, legal representatives, and successors.  The Company
will require any successor entity to expressly assume the obligations of this
Plan.  If the successor disputes its obligation to assume this Plan, that will
be treated as an event entitling Participants to benefits under the Plan without
the requirement of resigning from employment.

                                      -22-

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