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                                                                       EXHIBIT C

                SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
                                (Scott D. Peters)

                                November 7, 1999

     THIS SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
dated as of November 7, 1999, between Golf Trust of America, Inc., a Maryland
corporation, having its principal place of business at 14 North Adger's Wharf,
Charleston, South Carolina 29401 (the "Company"), and Scott D. Peters, an
individual residing at the address set forth below his name on the signature
page hereof (the "Executive").

     COMPANY AND EXECUTIVE ENTER THIS AGREEMENT on the basis of the following
facts, understandings and intentions:

     A. the Executive has been an executive of the Company employed under that
certain Employment Agreement dated as of February 7, 1997 and amended and
restated as of July 25, 1997 (the "Original Agreement"), which employment
commenced on the date of the closing of the Company's initial public offering,
February 12, 1997 (the "Commencement Date");

     B. the Executive desires to remain in the employ of the Company;

     C. the Company values Executive's knowledge and familiarity with the
business of the Company and desires to assure itself of the continued services
of Executive; and

     D. Company and Executive desire to amend and restate the Original Agreement
as set forth below.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the Company and Executive agree as follows:

     1. Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to be employed by the Company, on the terms and
conditions set forth herein.

     2. Term. The employment of the Executive by the Company as provided in
Section 1 above will commence on the Commencement Date, and will terminate on
February 7, 2003 (such term being the "Original Term"), unless earlier
terminated pursuant to the provisions of Section 5 of this Agreement. On the
final day of the Original Term and on each one (1) year anniversary thereafter
(each an "Extension Date"), the term of this Agreement shall be extended
automatically to commence on the Extension Date and terminate on the two (2)
year anniversary of the Extension Date (each such period being a "Renewal
Term"), unless written notice that this Agreement will not be so extended is
given by either party to the other at least two (2) years prior to the Extension
Date. The Original Term and any Renewal Terms, in their full duration, are
herein individually referred to as "Employment Terms," and the period of the
Executive's employment under this Agreement consisting of the Original Term and
all Renewal Terms, except as may be terminated early pursuant to Section 5, is
herein referred to as the "Employment Period."

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     3. Position.

          (a) Title and Position. During the Employment Period, the Executive
shall be employed as an executive officer of the Company with the title of
Senior Vice President and Chief Financial Officer or in such other executive
position as the Board of Directors of the Company (the "Board") may from time to
time determine with the consent of the Executive. In the performance of his
duties as an officer, the Executive shall be subject to the direction of the
Board and the President and shall not be required to take direction from or
report to any other person unless otherwise directed by the Board or the
President. The Executive's duties and authority shall be commensurate with his
title and position with the Company.

          (b) Place of Employment. During the term of this Agreement, the
Executive shall perform the services required by this Agreement at the Company's
place of business in Charleston, South Carolina; provided, however, that the
Company may require the Executive to travel to other locations on the Company's
business.

          (c) Duties. The Executive shall devote commercially reasonable efforts
and substantially full working time and attention to the promotion and
advancement of the Company and its welfare. The Executive shall serve the
Company faithfully and to the best of his ability, and shall perform such
services and duties in connection with the business, affairs and operations of
the Company as may be assigned or delegated to him from time to time by or
under, and in accordance with, the authority and direction of the Board. The
Company shall retain the right to direct and control the means and methods by
which the Executive performs the above services.

          (d) Other Activities. Except with the prior written approval of the
Board (which the Board may grant or withhold in its sole and absolute
discretion) and except as may be set forth in Section 9 of this Agreement, the
Executive, during the Employment Period, will not (i) accept any other
employment, or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that is or may be
competitive with, or that might place him in a competing position to, that of
the Company or any of its affiliates. Notwithstanding the foregoing, the Company
agrees that the Executive (or affiliates of the Executive) shall be permitted
(i) to undertake the activities set forth in Section 9, and (ii) to make any
other passive personal investment that is not in a business activity competitive
with the Company.

     4. Compensation and Related Matters.

          (a) Base Salary. Prior to July 1, 1997, the Company shall pay the
Executive a base salary at a rate of one hundred twenty-five thousand dollars
($125,000) per year. Beginning July 1, 1997, the Company shall pay the Executive
a base salary at a rate of one hundred fifty thousand dollars ($150,000) per
year through the end of the first calendar year of the Original Term. The
Executive's base salary for each succeeding calendar year shall, at a minimum,
be increased over the salary in effect at the end of the immediately preceding
year by a factor measured by the increase, if any, in the Consumer Price Index
for Wage Earners and Clerical Workers (as published by the Bureau of Labor
Statistics). The base salary may further be increased, but not decreased, in
succeeding years by an amount determined by the Compensation Committee of the
Board. All salary shall be paid according to the standard payroll practices of
the Company (regarding, e.g., timing of payments, standard employee deductions,
income tax withholdings, social security deductions, and etc.) as in place from
time to time.

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          (b) Business Expenses. The Company shall reimburse the Executive for
personal expenditures incurred in connection with the conduct of the Company's
business upon presentation of sufficient evidence of such expenditures as may be
required by the Company's policies as in place from time to time.

          (c) Benefit Plan Eligibility. During the Employment Period, the
Executive shall be entitled to participate in any benefit plans that are made
generally available to executive officers of the Company from time to time,
including, without limitation, any deferred compensation, health, dental, life
insurance, long-term disability insurance, retirement, pension or 401(k) savings
plan. Nothing in this Section 4(c) is intended, or shall be construed, to
require the Company to institute or to continue any, or any particular, plan or
benefit.

          (d) Performance Bonus. The Compensation Committee of the Board may
establish and administer a performance bonus program for the Executive to
provide for payment of a (cash and/or non-cash consideration) bonus to the
Executive upon the achievement of certain performance objectives to be
established by the Compensation Committee for the Executive. If such a program
is established, the Compensation Committee of the Board shall monitor, review
and modify the program from time to time as necessary to reflect the Executive's
contributions to the Company.

          (e) Stock Incentive Plan. The Compensation Committee of the Board
shall establish and administer one or more stock-based incentive plans in which
the Executive shall be eligible to participate according to their terms;
provided, however, that the Board of Directors shall approve, prior to the
completion of the Company's initial public offering, a grant of options to the
Executive to purchase up to forty thousand (40,000) shares of the Company's
common stock, which options shall vest in three (3) equal installments
commencing upon the first anniversary of the date of grant and each of the two
(2) years thereafter, and shall be exercisable for ten (10) years from the date
of grant at the fair market value of the common stock on the date of grant.

          (f) Fringe Benefits. The Executive will be entitled to fringe benefits
as may be determined or granted from time-to-time by the Board or by the
President acting under the authority of the Board; provided, however, that the
Company shall provide the fringe benefits authorized by the Board on April 25,
1997 (which resolution is attached to this Agreement as Exhibit A) and shall not
reduce or modify those benefits in a manner adverse to the Executive without the
written consent of the Executive.

          (g) Vacation and Holidays. The Executive shall be entitled to four (4)
weeks (twenty (20) business days) of paid vacation time in each calendar year on
a pro-rated basis. The Executive shall be entitled to all paid Company holidays.

          (h) Directors and Officers Insurance and Indemnification. The Company
shall maintain insurance to insure the Executive against any claim arising out
of an alleged wrongful act by the Executive while acting as a director or
officer of the Company. The Company shall further indemnify and exculpate from
money damages the Executive to the fullest extent permitted under applicable
law.

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          (i) Performance Reviews. At the end of each fiscal year, the Board or
the Compensation Committee thereof will review the Executive's job performance
and will provide the Executive a written review of the Executive's job
performance during the prior year and implement any Board authorized revisions
to the Executive's position, compensation and duties at the Company; provided,
however, that the provisions set forth in this Agreement with respect to the
Executive's compensation, and other terms and conditions of the Executive's
employment at the Company shall not be modified by the Board in a manner which
would result in less favorable or less beneficial terms or conditions thereof
being imposed on the Executive without the Executive's full concurrence and
consent.

          (j) Moving and Temporary Living Expenses. The Company shall reimburse
the Executive for reasonable personal expenditures incurred in connection with
the move of his household goods from Los Angeles, California to Charleston,
South Carolina, including two trips by the Executive's wife to visit Charleston
for relocation purposes, upon presentation of sufficient evidence of such
expenditures as may reasonably be required by the Company. Employee will be paid
an additional allowance of One Thousand Five Hundred Dollars ($1500.00) per
month for temporary living expenses from the Commencement Date through the
earlier of (i) June 30, 1997 or (ii) the date on which Executive acquires
permanent housing in the Charleston, South Carolina area.

     5. Termination. The Executive's employment hereunder shall be, or may be,
as the case may be, terminated under the following circumstances:

          (a) Death. The Executive's employment under this Agreement shall
terminate upon his death.

          (b) Disability. The Executive's employment under this Agreement shall
terminate upon the Executive's physical or mental disability or infirmity which,
in the opinion of a competent physician selected by the Board, renders the
Executive unable to perform his duties under this Agreement for more than one
hundred twenty (120) days during any one hundred eighty (180) day period.

          (c) Employment-At-Will; Termination by Company for Any Reason. The
Executive's employment hereunder is "at will" and may be terminated by the
Company at any time with or without Good Reason (as defined in Section 7(c)
below), by the President or a majority vote of all of the members of the Board
of Directors upon written Notice of Termination (as defined below) to Employee,
subject only to the severance provisions specifically set forth in Section 7
below.

          (d) Voluntary Resignation. The Executive may voluntarily resign his
position and terminate his employment with the Company at any time by delivery
of a written notice of resignation to the Company (the "Notice of Resignation").
The Notice of Resignation shall set forth the date such resignation shall become
effective (the "Date of Resignation"), which date shall in any event, be at
least ten (10) days and no more than thirty (30) days from the date the Notice
of Resignation is delivered to the Company. The Notice of Resignation shall be
sufficient notice under Section 2 above to prevent the automatic extension of
this Agreement, if timely given according to the terms of Section 2.

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          (e) Notice. Any termination of the Executive's employment by the
Company shall be communicated by written Notice of Termination to the Executive.
For purposes of this Agreement, a "Notice of Termination" shall mean a notice
that indicates the specific termination provision in this Agreement relied upon
and sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated. The Notice of Termination shall be sufficient notice
under Section 2 above to prevent the automatic extension of this Agreement, if
timely given according to the terms of Section 2.

          (f) Date of Termination. "Date of Termination" shall mean (i) if the
Executive's employment is terminated by his death, the date of his death; (ii)
if the Executive's employment is terminated by reason of his disability, the
date of the opinion of the physician referred to in Section 5(b), above; (iii)
if the Executive's employment is terminated by the Company for Good Reason or
without Good Reason by the Company pursuant to Section 5(c) above, the date
specified in the Notice of Termination; and (iv) if the Executive voluntarily
resigns pursuant to Section 5(d) above, the Date of Resignation set forth in the
Notice of Resignation.

     6. Obligations Upon Termination.

          (a) Return of Property. The Executive hereby acknowledges and agrees
that all personal property and equipment furnished to or prepared by the
Executive in the course of or incident to his employment belongs to the Company
and shall be promptly returned to the Company upon termination of the Employment
Period.

          (b) Complete Resignation. Upon the expiration of the Employment Period
or any termination of employment under Section 5 above, the Executive shall be
deemed to have resigned from all offices and directorships then held with the
Company or any of its subsidiaries.

          (c) Survival of Representations, Warranties, Covenants and Other
Provisions. The representations and warranties contained in this Agreement and
the parties' obligations under this Section 6 and Sections 7 through 9 and 16
through 18, inclusively, shall survive termination of the Employment Period and
the expiration of this Agreement.

          (d) Release. In exchange for the Company entering into this Agreement,
the Executive agrees that, at the time of his resignation or termination from
the Company, he will resign from the Board and will execute a release acceptable
to the Company of all liability of the Company and its officers, shareholders,
employees and directors to the Executive in connection with or arising out of
his employment with the Company, except with respect to (i) any then-vested
rights under any of the Company's stock incentive plans or in connection with
other stock-based compensation; (ii) any deferred compensation held in trust
under the Company's Deferred Compensation Plan; (iii) any Severance Payments or
benefits which may be payable to him under Section 7 or other provisions of this
Agreement; and (iv) any continuation of health or other benefit plans in
accordance with this Agreement or as may be required by law.

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     7. Compensation Upon Termination. The Executive shall be entitled to the
following post-termination payments and no others:

          (a) Death. If the Executive's employment is terminated by reason of
death pursuant to Section 5(a), the Company shall pay the Executive his base
salary payable under Section 4(a) as in effect on the Date of Termination plus
the greater of (1) the average value of the cash and non-cash consideration
received by Executive as a performance bonus in years 1997, 1998 and 1999 or (2)
the value of the most recent year's annual cash and non-cash consideration
received by Executive as a performance bonus (the "Severance Payments"), paid in
semi-monthly installments for the greater of (i) three (3) years following the
Date of Termination, or (ii) the time period beginning on the Date of
Termination and ending on the final day of the final Employment Term determined
according to Section 2, above. In addition, immediately prior to the Date of
Termination the vesting of all stock-related compensation previously granted to
the Executive shall be accelerated such that none of such compensation is
subject to forfeiture and such that any stock options or similar rights
previously granted to the Executive shall become immediately vested and
exercisable; provided, however, that all stock-related compensation shall be
subject to the plan under which it was granted, if any, as such plan may be
amended from time to time in accordance with its terms. In addition, during the
greater of the time periods in the preceding clauses (i) and (ii), the
Executive, his estate and dependents shall continue to participate, at their
option, in all benefit plans described in Section 4(c) and shall continue to
receive all fringe benefits described in Section 4(f) in each case substantially
comparable to those in effect on the day before the Date of Termination.
Thereafter, at their own expense, the Executive's dependents shall be entitled
to any continuation of health insurance coverage rights required by any
applicable law.

          (b) Disability. If the Executive's employment is terminated by reason
of disability pursuant to Section 5(b), the Executive shall receive Severance
Payments paid in semi-monthly installments for the greater of (i) three (3)
years following the Date of Termination, or (ii) the time period beginning on
the Date of Termination and ending on the final day of the final Employment Term
determined according to Section 2, above; provided, however, that Severance
Payments otherwise payable to the Executive under this Section 7(b) shall be
reduced by the sum of the amounts, if any, payable to the Executive at or prior
to the time of any such Severance Payment under any disability benefit plan of
the Company. In addition, immediately prior to the Date of Termination the
vesting of all stock-related compensation previously granted to the Executive
shall be accelerated such that none of such compensation is subject to
forfeiture and such that any stock options or similar rights previously granted
to the Executive shall become immediately vested and exercisable; provided,
however, that all stock-related compensation shall be subject to the plan under
which it was granted, if any, as such plan may be amended from time to time in
accordance with its terms. In addition, during the greater of the time periods
in the preceding clauses (i) and (ii), the Executive shall continue to
participate, at his option, in all benefit plans described in Section 4(c) and
shall continue to receive all fringe benefits described in Section 4(f) in each
case substantially comparable to those in effect on the day before the Date of
Termination. Thereafter, at the Executive's own expense, the Executive and his
dependents shall be entitled to any continuation of health insurance coverage
rights required by any applicable law.

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          (c) Termination by Company.

               (i) For Good Reason. If the Executive's employment is terminated
by the Company pursuant to Section 5(c) for Good Reason (as defined below), the
Company shall pay the Executive his base salary and any bonus due and payable
pursuant to Section 4(d) through the Date of Termination. In addition, the
Executive shall be entitled to retain such stock-based compensation (including,
without limitation, shares of restricted stock and/or options to purchase
securities of the Company granted or sold to the Executive pursuant to the terms
and conditions of any of the Company's stock incentive plans or otherwise) as
has vested as of the Date of Termination. At the Executive's own expense, the
Executive and his dependents shall also be entitled to any continuation of
health insurance coverage rights required by any applicable law.

               (ii) Without Good Reason. If the Executive's employment is
terminated by the Company pursuant to Section 5(c) without any Good Reason, the
Company shall pay to the Executive the Severance Payments in semi-monthly
installments for the greater of (A) three (3) years following the Date of
Termination, or (B) the time period beginning on the Date of Termination and
ending on the final day of the final Employment Term determined according to
Section 2, above. In addition, immediately prior to the Date of Termination the
vesting of all stock-related compensation previously granted to the Executive
shall be accelerated such that none of such compensation is subject to
forfeiture and such that any stock options or similar rights previously granted
to the Executive shall become immediately vested and exercisable; provided,
however, that all stock-related compensation shall be subject to the plan under
which it was granted, if any, as such plan may be amended from time to time in
accordance with its terms. In addition, during the greater of the time periods
in the preceding clauses (A) and (B), the Executive shall continue to
participate, at his option, in all benefit plans described in Section 4(c) and
shall continue to receive all fringe benefits described in Section 4(f) in each
case substantially comparable to those in effect on the day before the Date of
Termination. Thereafter, at the Executive's own expense, the Executive and his
dependents shall be entitled to any continuation of health insurance coverage
rights required by any applicable law.

               (iii) "Good Reason" means a finding by the Board that (A) the
Executive materially breached any of the material terms of this Agreement; or
(B) the Executive acted with gross negligence, willful misconduct or
fraudulently in the performance of his duties hereunder.

          (d) Voluntary Resignation.

               (i) For Good Cause. If the Executive terminates his employment
with the Company pursuant to Section 5(d) for Good Cause (as defined below), the
Company shall pay the Executive the Severance Payments in semi-monthly
installments for the greater of (A) three (3) years following the Date of
Termination, or (B) the time period beginning on the Date of Termination and
ending on the final day of the final Employment Term determined according to
Section 2, above.. In addition, immediately prior to the Date of Termination the
vesting of all stock-related compensation previously granted to the Executive
shall be accelerated such that none of such compensation is subject to
forfeiture and such that any stock options or similar rights previously granted
to the Executive shall become immediately vested and exercisable; provided,
however, that all stock-related compensation shall be subject to the plan under
which it was granted, if any, as such plan may be amended from time to time in
accordance with its terms. In addition, during the greater of the time periods
in the preceding clauses (A) and (B), the Executive shall continue to
participate, at his option, in all benefit plans described in Section 4(c) and
pursuant thereto shall receive benefits substantially comparable to those in
effect on the day before the Date of Resignation. Thereafter, at the Executive's
own expense, the Executive and his dependents shall be entitled to any
continuation of health insurance coverage rights required by any applicable law.

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               (ii) Without Good Cause. If the Executive terminates his
employment with the Company pursuant to Section 5(g) without Good Cause, the
Company shall have no obligation to compensate the Executive following the Date
of Resignation. However, the Executive shall be entitled to retain such
stock-based compensation (including, without limitation, shares of restricted
stock and/or options to purchase securities of the Company granted or sold to
the Executive pursuant to the terms and conditions of any of the Company's stock
incentive plans or otherwise) as has vested as of the Date of Termination. In
any event, at the Executive's own expense, the Executive and his dependents
shall be entitled to any continuation of health insurance coverage rights
required by any applicable law.

               (iii) "Good Cause" means the occurrence, without the express
written consent of the Executive, of any of the following events, unless such
event is substantially corrected within ninety (90) days following written
notification by Executive to the Company that he intends to terminate his
employment under this Agreement because of such event:

     (A)  any reduction or diminution in the compensation, benefits or
          responsibilities of the Executive;

     (B)  any material breach or material default by the Company under any
          material provision of this Agreement;

     (C)  any relocation of the Company's principal place of business from
          Charleston County, South Carolina; or

     (D)  any Change in Control (as defined below).

               (iv) "Change in Control" means the occurrence of any of the
following events after the effective date of the first initial public offering
of the Company's common stock:

     (A)  the Board adopts a plan relating to the liquidation or dissolution or
          merger of the Company;

     (B)  a Person (as defined below) directly or indirectly becomes the
          "beneficial owner" (as such term is defined in Rule 13d-3 and Rule
          13d-5 under the Securities Exchange Act of 1934) of more than
          twenty-five percent (25%) of the total voting power of the total
          outstanding voting securities of the Company on a fully diluted basis;
          provided, however, that beneficial ownership of partnership units in
          Golf Trust of America, L.P. shall not be considered beneficial
          ownership of voting securities of the Company;

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     (C)  a Person directly or indirectly acquires or agrees to acquire all or
          substantially all of the assets and business of the Company;

     (D)  for any reason during any period of two (2) consecutive years (not
          including any period prior to the date of this Agreement) a majority
          of the Board is constituted by individuals other than (1) individuals
          who were directors immediately prior to the beginning of such period,
          and (2) new directors whose election by the Board or nomination for
          election by the Company's shareholders was approved by a vote of at
          least two-thirds (2/3) of the directors then still in office who
          either were directors immediately prior to the beginning of the period
          or whose election or nomination for election was previously so
          approved.

               (v) For purposes of this Section 7(d), "Person" means any natural
person, corporation, or any other entity; provided, however, that the term
"Person" shall not include any shareholder or employee of the company on the
date immediately prior to the initial public offering of the Company's common
stock or any estate or member of the immediate family of such a shareholder or
employee.

          (e) In the event of any termination pursuant to Section 5, the
Executive shall be entitled to retain any and all options to purchase securities
of the Company granted to the Executive pursuant to the terms and conditions of
any of the Company's stock incentive plans or otherwise that have vested as of
the date of such termination.

          (f) Any Severance Payments made pursuant to this Section 7 shall be
payable in equal semi-monthly installments over the required duration set forth
herein.

          (g) If, in spite of the provisions above entitling the Executive to
benefits under any benefit plan, such benefits are not payable or provideable
under any such plan to the Executive, or to the Executive's dependents,
beneficiaries or estate, because the Executive is no longer deemed to be an
employee of the Company, then the Company shall independently pay or provide for
payment of such benefits for the remainder of the Employment Term.

          (h) The continuing obligation of the Company to make any Severance
Payment to the Executive is expressly conditioned upon the Executive complying
and continuing to comply with his obligations and covenants under Sections 6, 8
and 9 of this Agreement following termination of his employment with the
Company.

          (i) In the event that any payment by or on behalf of the Company or
Golf Trust of America, L.P. to Executive (whether or not such payment is
required under this Agreement) qualifies as an "excess parachute payment" under
Section 280G or Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Tax Code"), the Company shall make additional payments in cash to
Executive (so called "gross-up payments") so that the Executive is put in the
same after-tax position as he would have been in had no excise tax been imposed
by Section 4999 of the Tax Code (or any successor or similar provision).

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     8. Covenant of Confidentiality. In addition to the agreements set forth in
Section 6, the Executive hereby agrees that the Executive will not, during the
Employment Period or for one (1) year thereafter directly or indirectly disclose
or make available to any person, firm, corporation, association or other entity
for any reason or purpose whatsoever, any Confidential Information. As used in
this Agreement, "Confidential Information" means: non-public information
disclosed to the Executive or known by the Executive as a consequence of or
through his relationship with the Company, about the Company's subsidiaries,
affiliates and partners thereof, owners, customers, employees, business methods,
public relations methods, organization, procedures or finances, including,
without limitation, information of or relating to properties that the Company or
any of its affiliates, subsidiaries or partners thereof owns or may be
considering acquiring an interest in; provided, however, that the Executive
shall not be obligated to treat as confidential, or return to the Company copies
of, any Confidential Information that (i) was publicly known at the time of
disclosure to the Executive, (ii) becomes publicly known or available thereafter
other than by any means in violation of this Agreement or any other duty owed to
the Company by any person or entity, or (iii) the Executive is required by law
to disclose to a third party.

     9. Covenant Not to Compete.

          (a) The Executive agrees that during the Employment Period he will
devote substantially his full working time to the business of the Company and
will not engage in any competitive business. Subject to such full-time
requirement and the other restrictions set forth in this Section 9 and Section
3(d) above, the Executive shall be permitted to continue his existing business
investments and activities and may pursue additional business investments.
Without limiting the foregoing, the Executive specifically covenants that during
and after his employment with the company he shall not:

               (i) compete directly with the Company in a business similar to
that of the Company;

               (ii) compete directly or indirectly with the Company, its
subsidiaries and/or partners thereof with respect to any acquisition or
development of any real estate project undertaken or being considered by the
Company, its subsidiaries and/or partners thereof at the end of Executive's
Employment Period;

               (iii) lend or allow his name or reputation to be used by or in
connection with any business competitive with the Company, its subsidiaries
and/or partners thereof; or

               (iv) intentionally interfere with, disrupt or attempt to disrupt
the relationship, contractual or otherwise, between the Company, its
subsidiaries and/or partners thereof, and any lessee, tenant, supplier,
contractor, lender, employee or governmental agency or authority.

          (b) The provisions of this Section 9 shall survive for one year and no
longer following the termination of the Employment Period regardless of whether
such termination is for Good Cause or without Good Reason or otherwise;
provided, however, that if the Executive resigns or is terminated during the
twelve months following a Change in Control (as defined in Section 7(d)) then
the provisions of this Section 9 shall not survive the Executive's resignation
or termination.

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     10. Injunctive Relief and Enforcement. In the event of breach by the
Executive of the terms of Sections 6, 8 or 9, the Company shall be entitled to
institute legal proceedings to enforce the specific performance of this
Agreement by the Executive and to enjoin the Executive from any further
violation of Sections 6, 8 or 9 and to exercise such remedies cumulatively or in
conjunction with all other rights and remedies provided by law and not otherwise
limited by this Agreement. The Executive acknowledges, however, that the
remedies at law for any breach by him of the provisions of Sections 6, 8 or 9
may be inadequate. In addition, in the event the agreements set forth in
Sections 6, 8 or 9 shall be determined by any court of competent jurisdiction to
be unenforceable by reason of extending for too great a period of time or over
too great a geographical area or by reason of being too extensive in any other
respect, each such agreement shall be interpreted to extend over the maximum
period of time for which it may be enforceable and to the maximum extent in all
other respects as to which it may be enforceable, and enforced as so
interpreted, all as determined by such court in such action.

     11. Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered, when
transmitted by telecopy with receipt confirmed, or one day after delivery to an
overnight air courier guaranteeing next day delivery, addressed as follows:

If to the Executive:                Scott D. Peters
                                    2758 Christ Church Court
                                    Mt. Pleasant, South Carolina  29464
                                    telecopy:  (843) 971-7487

If to the Company:                  Golf Trust of America, Inc.
                                    14 North Adger's Wharf
                                    Charleston, South Carolina  29401
                                    telecopy: (843) 723-0479

With a copy to:                     O'Melveny & Myers LLP
                                    Embarcadero Center West
                                    275 Battery Street, Suite 2600
                                    San Francisco, California 94111-3305
                                    Attention: Peter T. Healy, Esq.
                                    telecopy: (415) 984-8701

or to such other  address as any such party may  furnish to the others from time
to time in writing in  accordance  herewith,  except  that  notices of change of
address shall be effective only upon receipt.

                                       11
<PAGE>

     12. Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect; provided, however, that if any one or more of the terms contained in
Sections 6, 8 or 9 hereto shall for any reason be held to be excessively broad
with regard to time, duration, geographic scope or activity, that term shall not
be deleted but shall be reformed and constructed in a manner to enable it to be
enforced to the extent compatible with applicable law.

     13. Assignment. This Agreement may not be assigned by the Executive, but
may be assigned by the Company to any successor to its business and will inure
to the benefit and be binding upon any such successor.

     14. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

     15. Headings. The headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.

     16. Choice of Law. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of
South Carolina (without reference to the choice of law provisions of the State
of South Carolina), except with respect to matters of law concerning the
internal corporate affairs of any corporate entity which is a party to or the
subject of this Agreement, and as to those matters the law of the jurisdiction
under which the respective entity derives its powers shall govern.

     17. LIMITATION ON LIABILITIES. IF EITHER THE EXECUTIVE OR THE COMPANY IS
AWARDED ANY DAMAGES AS COMPENSATION FOR ANY BREACH OR ACTION RELATED TO THIS
AGREEMENT, A BREACH OF ANY COVENANT CONTAINED IN THIS AGREEMENT (WHETHER EXPRESS
OR IMPLIED BY EITHER LAW OR FACT), OR ANY OTHER CAUSE OF ACTION BASED IN WHOLE
OR IN PART ON ANY BREACH OF ANY PROVISION OF THIS AGREEMENT, SUCH DAMAGES SHALL
BE LIMITED TO CONTRACTUAL DAMAGES AND SHALL EXCLUDE (I) PUNITIVE DAMAGES, AND
(II) CONSEQUENTIAL AND/OR INCIDENTAL DAMAGES (E.G., LOST PROFITS AND OTHER
INDIRECT OR SPECULATIVE DAMAGES). THE MAXIMUM AMOUNT OF DAMAGES THAT THE
EXECUTIVE MAY RECOVER FOR ANY REASON SHALL BE THE AMOUNT EQUAL TO ALL AMOUNTS
OWED (BUT NOT YET PAID) TO THE EXECUTIVE PURSUANT TO THIS AGREEMENT THROUGH ITS
NATURAL TERM OR THROUGH ANY SEVERANCE PERIOD, PLUS INTEREST ON ANY DELAYED
PAYMENT AT THE MAXIMUM RATE PER ANNUM ALLOWABLE BY APPLICABLE LAW FROM AND AFTER
THE DATE(S) THAT SUCH PAYMENTS WERE DUE.

     18. WAIVER OF JURY TRIAL. TO THE EXTENT APPLICABLE, EACH OF THE PARTIES TO
THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.

                                       12
<PAGE>

     19. Entire Agreement. This Agreement contains the entire agreement and
understanding between the Company and the Executive with respect to the
employment of the Executive by the Company as contemplated hereby and no
representations promises agreements or understandings written or oral, not
herein contained shall be of any force or effect. This Agreement shall not be
changed unless in writing and signed by both the Executive and the Board of
Directors of the Company.

     20. Executive's Acknowledgment. The Executive acknowledges (a) that he has
had the opportunity to consult with independent counsel of his own choice
concerning this Agreement, and (b) that he has read and understands the
Agreement, is fully aware of its legal effect, and has entered into it freely
based on his own judgment.

     IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the date and year first written above.

                                       "COMPANY"

                                       GOLF TRUST OF AMERICA, INC., a Maryland
                                       corporation

                                       By:______________________________________
                                           W. Bradley Blair, II
                                           President and Chief Executive Officer

                                       "EXECUTIVE"

                                       _________________________________________
                                       SCOTT D. PETERS

                                         Residing at:

                                            ____________________________________

                                            ____________________________________

                                            ____________________________________

                                       13
<PAGE>

                                    EXHIBIT A

                         Board Minutes of April 25, 1997

14.  Compensation Committee Matters

     Mr. Chapman, Chairman of the Compensation Committee, led a discussion of
     compensation matters.

     a.   Approval of Benefit Plans

          After discussion, upon motion duly made, seconded and unanimously
          carried, the following recitals and resolutions were adopted by the
          Board:

          WHEREAS, the employment agreements between the Company and W. Bradley
          Blair, II, David J. Dick and Scott D. Peters (collectively the
          "Executives") contemplate but do not require that the Company will
          establish certain benefit plans for its Executives;

          WHEREAS, this Board of Directors deems it advisable and in the best
          interest of the Company and its shareholders to make certain benefit
          plans available to the Executives; and

          WHEREAS, this Board of Directors deems it appropriate to direct the
          provision of certain employee benefits and the adoption of certain
          benefit plans;

          NOW, THEREFORE, BE IT RESOLVED, that the Company shall offer the
          following benefits to each of the Executives:

          1.   Financial planning, tax compliance assistance and related
               services (to be provided initially by the Company's accountant,
               and thereafter by such provider as the President shall select);

          2.   Accidental death and dismemberment insurance plan;

          3.   Long-term disability insurance (at 50% of employee's salary);

          4.   Payment of, or reimbursement for, professional association dues,
               professional licensing fees, continuing education tuition and
               associated expenses.

          RESOLVED FURTHER, that the Company shall provide the following
          benefits to each of the Executives with the frequency or in the
          amounts indicated:

          1.   Full health exam and medical testing available on the following
               basis:

                             Blair:           Annually
                             Dick:            Bi-Annually
                             Peters:          Bi-Annually

                                       14
<PAGE>

          2.   Automobile allowances in the following amounts or, at the
               Compensation Committee's option and on such terms and conditions
               as the Compensation Committee shall specify, use of Company
               automobiles:

                             Blair:           $1000/month
                             Dick:            $800/month
                             Peters:          $600/month

          RESOLVED FURTHER, that the enumeration of benefits in these
          resolutions is non-exclusive and shall not be construed to limit the
          availability of other benefits for which the Executives or any of them
          are otherwise eligible.

          RESOLVED FURTHER, that W. Bradley Blair, II and such other officers as
          he may from time to time designate be, and hereby are, authorized and
          empowered on behalf of and by the Company and in its name to enter
          into contracts with providers of the above benefit packages as each
          shall deem advisable to accomplish the purposes of these resolutions.

          RESOLVED FURTHER, that each of the officers of this Company be, and
          hereby is, authorized and empowered on behalf of this Company and in
          its name to execute any applications, certificates, agreements, or any
          other instruments or documents or amendments or supplements thereto,
          or to do and to cause to be done any and all other acts and things as
          such officers may in their discretion deem necessary or appropriate to
          carry out the purposes of each of the foregoing resolutions, the
          execution and delivery of such documents and the taking of such
          actions to be conclusive evidence of the necessity or appropriateness
          thereof.

          RESOLVED FURTHER, that any and all actions heretofore or hereafter
          taken by any appropriate officer or authorized representative of this
          Company within the terms or intent of any of the foregoing resolutions
          be, and hereby are, ratified and confirmed as the act and deed of this
          Company.

                                       15<PAGE>

                                                                    EXHIBIT 10.3

                         INTERACTIVE INTELLIGENCE, INC.

                      1999 STOCK OPTION AND INCENTIVE PLAN

     (Restated to reflect all amendments adopted through February 22, 2000)

         1. PLAN PURPOSE. The purpose of the Plan is to promote the long-term
interests of the Company and its shareholders by providing a means for
attracting and retaining officers and key employees of the Company and its
Affiliates.

         2. DEFINITIONS. The following definitions are applicable to the Plan:

         "Affiliate" -- means any "parent corporation" or "subsidiary
corporation" of the Company as such terms are defined in Section 424(e) and (f),
respectively, of the Code and any other corporation or other entity (including
partnerships, limited liability companies, and joint ventures) controlled by or
under common control with the Company.

         "Award" -- means, individually or collectively, the grant by the
Committee of an Incentive Stock Option, a Non-Qualified Stock Option, or
Restricted Stock, or any combination thereof, as provided in the Plan.

         "Board or Board of Directors" -- means the Board of Directors of the
Company.

         "Cashless Exercise" -- means, if there is a public market for the
Shares, the payment of the Exercise Price (a) through a "same day sale"
commitment from the Participant and an NASD Dealer whereby the Participant
irrevocably elects to exercise the Option and to sell a portion of the Shares so
purchased in order to pay the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such stock to forward the Exercise Price
directly to the Company, or (b) through a "margin" commitment from the
Participant and an NASD Dealer whereby the Participant irrevocably elects to
exercise the Option and to pledge the Shares so purchased to the NASD Dealer in
a margin account as security for a loan from the NASD Dealer in the amount of
the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company.

         "Cause" -- means, for purposes of determining whether and when a
Participant has incurred a Termination of Continuous Service for Cause, any act
or failure to act which permits the Company to terminate the written agreement
or arrangement between the Participant and the Company or an Affiliate for
"cause" as defined in such agreement or arrangement or, in the event there is no
such agreement or arrangement or the agreement or arrangement does not define
the term "cause," then "Cause" for purposes of the Plan shall mean any act or
failure to act deemed to constitute "cause" under the Company's established and
applied practices, policies or guidelines applicable to the Participant.

         "Change in Control" -- means each of the events specified in the
following clauses (i) through (iii): (i) any third person, including a "group"
as defined in Section 13(d)(3) of the

<PAGE>

Exchange Act shall, after the date of the adoption of the Plan by the Board,
first become the beneficial owner of Shares of the Company with respect to which
25% or more of the total number of votes for the election of the Board of
Directors of the Company may be cast, (ii) as a result of, or in connection
with, any cash tender offer, exchange offer, merger or other business
combination, sale of assets or contested election, or combination of the
foregoing, the persons who were directors of the Company shall cease to
constitute a majority of the Board of Directors of the Company or (iii) the
stockholders of the Company shall approve an agreement providing either for a
transaction in which the Company will cease to be an independent publicly owned
entity or for a sale or other disposition of all or substantially all the assets
of the Company.

         "Code" -- means the Internal Revenue Code of 1986, as amended.

         "Committee" -- means the Committee referred to in Section 3 hereof.

         "Company" -- means Interactive Intelligence, Inc., an Indiana
corporation.

         "Continuous Service" -- means the absence of any interruption or
termination of service as an employee of the Company or an Affiliate. Service
shall not be considered interrupted in the case of sick leave, military leave,
or any other leave of absence approved by the Company or in the case of any
transfer between the Company and an Affiliate or any successor to the Company.

         "Disability" -- means a mental or physical illness that entitles the
Participant to receive benefits under the long-term disability plan of the
Company or an Affiliate. Notwithstanding the foregoing, a Disability shall not
qualify under the Plan if it is the result, as determined by the Committee, of
(a) an intentionally self-inflicted injury or an intentionally self-induced
sickness, or (b) an injury or disease contracted, suffered or incurred while
participating in a criminal offense. The determination of a Disability for
purposes of the Plan shall not be construed to be an admission of a disability
for any other purpose.

         "Employee" -- means any person, including an officer or director, who
is employed by the Company or any Affiliate.

         "Exchange Act" -- means the Securities Exchange Act of 1934, as
amended.

         "Exercise Price" -- means the price per Share at which the Shares
subject to an Option may be purchased upon exercise of such Option.

                                      -2-
<PAGE>

         "Incentive Stock Option" -- means an option to purchase Shares granted
by the Committee pursuant to the terms of the Plan which is intended to qualify
under Section 422 of the Code.

         "Market Value" -- means the last reported sale price on the date in
question (or, if there is no reported sale on such date, on the last preceding
date on which any reported sale occurred) of one Share on the principal exchange
on which the Shares are listed for trading, or if the Shares are not listed for
trading on any exchange, on the NASDAQ National Market System or any similar
system then in use, or, if the Shares are not listed on the NASDAQ National
Market System, the mean between the closing high bid and low asked quotations of
one Share on the date in question as reported by NASDAQ or any similar system
then in use, or, if no such quotations are available, the fair market value on
such date of one Share as the Committee shall determine.

         "NASD Dealer" -- means a broker-dealer who is a member of the National
Association of Securities Dealers, Inc.

         "Non-Qualified Stock Option" -- means an option to purchase Shares
granted by the Committee pursuant to the terms of the Plan, which option is not
intended to qualify under Section 422 of the Code.

         "Option" -- means an Incentive Stock Option or a Non-Qualified Stock
Option.

         "Participant" -- means any officer, key employee, or consultant of the
Company or any Affiliate or any other individual who is selected by the
Committee to receive an Award.

         "Plan" -- means the Interactive Intelligence, Inc. 1999 Stock Option
and Incentive Plan, as set forth in this instrument and as hereafter amended
from time to time.

         "Reorganization" -- means the liquidation or dissolution of the Company
or any merger, consolidation or combination of the Company (other than a merger,
consolidation or combination in which the Company is the continuing entity and
which does not result in the outstanding Shares being converted into or
exchanged for different securities, cash or other property or any combination
thereof).

         "Restricted Period" -- means the period of time selected by the
Committee for the purpose of determining when restrictions are in effect under
Section 10 hereof with respect to Restricted Stock awarded under the Plan.

                                      -3-
<PAGE>

         "Restricted Stock" -- means Shares which have been contingently awarded
to a Participant by the Committee subject to the restrictions referred to in
Section 10 hereof, so long as such restrictions are in effect.

         "Retirement" -- means the date on which a Participant attains age
sixty-five (65) or such other "normal retirement age" as the Company shall
specify in its written policies.

         "Securities Act" -- means the Securities Act of 1933, as amended.

         "Shares" -- means the common stock, $.01 par value, of the Company and
shall include common stock as it may be changed from time to time as described
in Section 11 hereof.

         "Termination of Continuous Service" -- means the occurrence of any act
or event or any failure to act whether pursuant to an employment agreement or
otherwise that actually or effectively causes or results in a Participant
ceasing, for whatever reason, to be an Employee of the Company or an Affiliate,
including, but not limited to, death, Disability, Retirement, termination by the
Company or an Affiliate of the Participant's employment with the Company or an
Affiliate (whether with or without Cause), and voluntary resignation or
termination by the Participant of his or her employment with the Company or an
Affiliate. A Termination of Continuous Service also shall occur with respect to
an Employee who is employed by an Affiliate if the Affiliate shall cease to be
an Affiliate of the Company and the Participant shall not immediately thereafter
become an Employee of the Company or another Affiliate. For purposes of the
Plan, transfers or changes of employment of a Participant between the Company
and an Affiliate (or between Affiliates) shall not be deemed a Termination of
Continuous Service.

         3. ADMINISTRATION. The Plan shall be administered by the Committee,
which shall consist of two or more members of the Board, each of whom shall be a
"non-employee director" as provided under Rule 16b-3 of the Exchange Act, and an
"outside director" as provided under Section 162(m) of the Code. Failure by the
Committee to be so comprised shall not result in the cancellation, termination,
expiration, or lapse of any Award. The members of the Committee shall be
appointed by the Board. If the Committee does not exist, or for any other reason
determined by the Board, the Board may take any action under the Plan that would
otherwise be the responsibility of the Committee. Except as limited by the
express provisions of the Plan, the Committee shall have sole and complete
authority and discretion to (a) select Participants and grant Awards; (b)
determine the number of Shares to be subject to and the types of Awards
generally, as well as to individual Awards granted under the Plan; (c) determine
the terms and conditions upon which Awards shall be granted under the Plan; (d)
prescribe the form and terms of instruments evidencing such grants; (e)
establish procedures and regulations for the administration of the Plan; (f)
construe and interpret the Plan, any Award agreement executed in

                                      -4-
<PAGE>

connection therewith, and any other agreements or instruments entered into under
the Plan; (g) make all determinations deemed necessary or advisable for the
administration of the Plan; and (h) establish, amend, or waive rules and
regulations for the administration of the Plan.

         A majority of the Committee shall constitute a quorum, and the acts of
a majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by all members of the Committee without a meeting,
shall be acts of the Committee. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan shall be final, conclusive, and
binding on all persons, and shall be given the maximum deference permitted by
law. Each Award shall be evidenced by a written agreement between the Company
and the Participant and shall contain such terms and conditions established by
the Committee consistent with the provisions of the Plan. Any notice or document
required to be given to or filed with the Committee will be properly given or
filed if hand delivered (and a delivery receipt is received) or mailed by
certified mail, return receipt requested, postage paid, to the Committee at 8909
Purdue Road, Suite 300, Indianapolis, Indiana 46268.

         4. PARTICIPANTS. The Committee may select from time to time
Participants from those officers, key employees and consultants of the Company
or its Affiliates and such other individuals who, in the opinion of the
Committee, have the capacity for contributing in a substantial measure to the
successful performance of the Company or its Affiliates. Neither the Plan nor
any Award agreement executed under the Plan shall constitute a contract of
employment between a Participant and the Company or an Affiliate, and
participation in the Plan shall not give a Participant the right to be rehired
by or retained in the employment of the Company or an Affiliate.

         5. SHARES SUBJECT TO PLAN. Subject to adjustment by the operation of
Sections 11 and 12 hereof, the maximum number of Shares with respect to which
Awards may be granted under the Plan is Three Million Seven Hundred Fifty
Thousand (3,750,000) Shares. The number of Shares which may be granted under the
Plan to any Participant during any calendar year of the Plan, under all forms of
Awards, shall not exceed Two Hundred Fifty Thousand (250,000) Shares. The Shares
with respect to which Awards may be made under the Plan may either be authorized
and unissued Shares or unissued Shares heretofore or hereafter reacquired and
held as treasury Shares. With respect to any Option which terminates or is
surrendered for cancellation or with respect to Restricted Stock which is
forfeited, new Awards may be granted under the Plan with respect to the number
of Shares as to which such termination or forfeiture has occurred.

         Subject to the limitations set forth in the Plan, the Committee shall
have full authority to determine the number of Shares available for Awards, and
in its discretion may include (without limitation) as available for distribution
any Shares that have ceased to be subject to an Award,

                                      -5-
<PAGE>

any Shares subject to an Award that have been previously forfeited, and any
Shares under an Award that otherwise terminates without the issuance of Shares
being made to a Participant.

         Shares issued upon exercise of an Award shall be subject to the terms
and conditions specified herein and to such other terms, conditions and
restrictions as the Committee in its discretion may determine or provide in the
Award agreement. The Company shall not be required to issue or deliver any
certificates for Shares or other property prior to (a) the listing of such
Shares on any stock exchange (or other public market) on which the Shares may
then be listed (or regularly traded); and (b) the completion of any registration
or qualification of such Shares under federal, state, local or other law, or any
ruling or regulation of any government body which the Committee determines to be
necessary or advisable. The Company may cause any certificate for any Shares to
be delivered hereunder to be properly marked with a legend or other notation
reflecting the limitations on transfer of such Shares as provided in the Plan or
as the Committee may otherwise require. Participants, or any other persons
entitled to benefits under the Plan, must furnish to the Committee such
documents, evidence, data, or other information as the Committee considers
necessary or desirable for the purpose of administering the Plan. The benefits
under the Plan for each Participant, and each other person who is entitled to
benefits hereunder, are to be provided on the condition that he furnish full,
true, and complete data, evidence, or other information, and that he will
promptly sign any document reasonably related to the administration of the Plan
requested by the Committee. No fractional Shares shall be issued under the Plan;
rather, fractional Shares shall be aggregated and then rounded to the next lower
whole Share.

         6. GENERAL TERMS AND CONDITIONS OF OPTIONS. The Committee shall have
full and complete authority and discretion, except as expressly limited by the
Plan, to grant Options and to provide the terms and conditions (which need not
be identical among Participants) thereof. In particular, the Committee shall
prescribe the following terms and conditions: (a) the type of Option; (b) the
Exercise Price; (c) the number of Shares subject to, and the expiration date of,
any Option; (d) the manner, time and rate (cumulative or otherwise) of exercise
of such Option; (e) the restrictions, if any, to be placed upon such Option or
upon Shares which may be issued upon exercise of such Option; and (f) such other
terms and conditions consistent with the Plan as the Committee determines in its
discretion. The Committee may, as a condition of granting any Option, require
that a Participant agree to surrender for cancellation one or more Options
previously granted to such Participant.

         7.       EXERCISE OF OPTIONS.

         (a) RESTRICTION ON EXERCISE. Except as provided in Section 14, all
Options granted under the Plan shall be exercisable during the lifetime of the
Participant to whom such Option was granted only by such Participant, and except
as provided in Section 8, no Option may be

                                      -6-
<PAGE>

exercised unless, at the time the Participant exercises the Option, the
Participant has maintained Continuous Service since the date of the grant of the
Option. Except as provided in Section 13, or as otherwise determined by the
Committee, all Options granted under the Plan shall vest and become exercisable
in accordance with the following schedule:

<TABLE>
<CAPTION>
                                                                          PERCENTAGE OF OPTION
                                                                    SHARES VESTED AND EXERCISABLE
                                                                ------------------------------------
                  DATE OF VESTING                               PERCENT VESTED            CUMULATIVE
                  ---------------                               --------------            ----------
<S>                                                             <C>                       <C>
         First anniversary of date of Option grant                     25%                     25%
         Second anniversary of date of Option grant                    25%                     50%
         Third anniversary of date of Option grant                     25%                     75%
         Fourth anniversary of date of Option grant                    25%                    100%
</TABLE>

         (b) METHOD OF EXERCISE. To exercise an Option under the Plan, the
Participant must give written notice to the Company specifying the number of
Shares with respect to which the Participant elects to exercise the Option
together with full payment of the Exercise Price. The date of exercise shall be
the date on which the notice is received by the Company. Payment may be made
either (i) in cash (including check, bank draft, or money order), (ii) by
tendering Shares already owned by the Participant for more than six months and
having a Market Value on the date of exercise equal to the Exercise Price, (iii)
the delivery of cash by a broker-dealer as a Cashless Exercise, or (iv) by any
other means determined by the Committee in its sole discretion.

         (c) RELOAD PROVISION. In the event a Participant exercises an Option
and pays all or a portion of the Exercise Price in Shares, in the manner
permitted by Section 7(b), such Participant may (either pursuant to terms of the
Award agreement or pursuant to the sole discretion of the Committee at the time
the Option is exercised) be issued a new Option to purchase additional Shares
equal to the number of Shares surrendered to the Company in such payment. Such
new Option shall (a) have an Exercise Price equal to the Market Value per Share
on the grant date of the new Option, (b) first be exercisable six (6) months
from such grant date, and (c) expire on the same date as the original Option so
exercised by payment of the Exercise Price in Shares.

         8. TERMINATION OF OPTIONS. Unless otherwise specifically provided by
the Committee in the Award agreement between the Participant and the Company,
each Option granted under the Plan shall terminate as provided in this Section
8.

         (a) MAXIMUM TERM. Unless sooner terminated under the provisions of this
Section 8, Options shall expire on the earlier of the date specified by the
Committee or the expiration of ten (10) years from the date of grant.

                                      -7-
<PAGE>

         (b) TERMINATION FOR CAUSE. If the Participant incurs a Termination of
Continuous Service for Cause, all rights under any Options granted to the
Participant shall terminate immediately upon the Participant's Termination of
Continuous Service, and the Participant shall (if the Committee in its sole
discretion exercises its rights under this Section 8(b) within ten (10) days of
such Termination of Continuous Service) repay to the Company within ten (10)
days of the Committee's demand therefor the amount of any gain realized by the
Participant upon any exercise within the 90-day period prior to the Termination
of Continuous Service of any Options granted to such Participant under the Plan.

         (c) TERMINATION DUE TO RETIREMENT OR WITHOUT CAUSE OR VOLUNTARY
TERMINATION . If the Continuous Service of a Participant is terminated by reason
of Retirement, terminated by the Company without Cause, or by Voluntary
Termination, the Participant may exercise outstanding Options to the extent that
the Participant was entitled to exercise the Options at the date of Termination
of Continuous Service, but only within the period of one (1) month immediately
succeeding the Participant's Termination of Continuous Service, and in no event
after the applicable expiration dates of the Options. Any Option that is not
exercisable on the date of Termination of Continuous Service shall terminate and
be forfeited effective on such date.

         (d) TERMINATION DUE TO DEATH OR DISABILITY. In the event of the
Participant's death or Disability, the Participant or the Participant's
beneficiary, as the case may be, may exercise outstanding Options to the extent
that the Participant was entitled to exercise the Options at the date of
Termination of Continuous Service, but only within the one (1)-year period
immediately succeeding the Participant's Termination of Continuous Service in
the case of Disability, and in no event after the applicable expiration date of
the Options. Any Option that is not exercisable on the date of Termination of
Continuous Service shall terminate and be forfeited effective on such date.

         (e) COMMITTEE DISCRETION. Notwithstanding the provisions of the
foregoing paragraphs of this Section 8, the Committee may, in its sole
discretion, establish different terms and conditions pertaining to the effect of
the Termination of Continuous Service, to the extent permitted by applicable
federal and state law.

         9. INCENTIVE STOCK OPTIONS. Incentive Stock Options may be granted only
to Participants who are Employees. Any provisions of the Plan to the contrary
notwithstanding, (i) no Incentive Stock Option shall be granted more than ten
(10) years from the date the Plan is adopted by the Board of Directors of the
Company and no Incentive Stock Option shall be exercisable more than ten (10)
years from the date such Incentive Stock Option is granted, (ii) the Exercise
Price of any Incentive Stock Option shall not be less than the Market Value per
Share on the date such Incentive Stock Option is granted, (iii) any Incentive
Stock Option shall

                                      -8-
<PAGE>

not be transferable by the Participant to whom such Incentive Stock Option is
granted other than by will or the laws of descent and distribution and shall be
exercisable during such Participant's lifetime only by such Participant, and
(iv) no Incentive Stock Option shall be granted which would permit a Participant
to acquire, through the exercise of Incentive Stock Options in any calendar
year, Shares or Shares of any capital stock of the Company or any Affiliate
thereof having an aggregate Market Value (determined as of the time any
Incentive Stock Option is granted) in excess of One Hundred Thousand Dollars
($100,000). The foregoing limitation shall be determined by assuming that the
Participant will exercise each Incentive Stock Option on the date that such
Option first becomes exercisable. Notwithstanding the foregoing, in the case of
any Participant who, at the date of grant, owns stock possessing more than Ten
Percent (10%) of the total combined voting power of all classes of capital stock
of the Company or any Affiliate, the Exercise Price of any Incentive Stock
Option shall not be less than One Hundred Ten Percent (110%) of the Market Value
per Share on the date such Incentive Stock Option is granted and such Incentive
Stock Option shall not be exercisable more than five (5) years from the date
such Incentive Stock Option is granted.

         10. TERMS AND CONDITIONS OF RESTRICTED STOCK. The Committee shall have
full and complete authority, subject to the limitations of the Plan, to grant
awards of Restricted Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (g) of this Section 10, to provide such
other terms and conditions (which need not be identical among Participants) in
respect of such Awards as the Committee shall determine and provide in the
agreement referred to in paragraph (d) of this Section 10.

         (a) RESTRICTED PERIOD. At the time of an Award of Restricted Stock, the
Committee shall establish for each Participant a Restricted Period during which,
or at the expiration of which, the Shares of Restricted Stock shall vest. The
Committee may also restrict or prohibit the sale, assignment, transfer, pledge,
or other encumbrance of the Shares of Restricted Stock by the Participant during
the Restricted Period. Except for such restrictions, and subject to paragraphs
(c), (d) and (e) of this Section 10 and Section 11 hereof, the Participant as
owner of such Shares shall have all the rights of a stockholder, including but
not limited to the right to receive all dividends paid on such Shares and the
right to vote such Shares. Except in the case of grants of Restricted Stock
which are intended to qualify as "performance-based compensation" under Section
162(m) of the Code, the Committee shall have the authority, in its discretion,
to accelerate the time at which any or all of the restrictions shall lapse with
respect to any Shares of Restricted Stock prior to the expiration of the
Restricted Period with respect thereto, or to remove any or all of such
restrictions, whenever it may determine that such action is appropriate by
reason of changes in applicable tax or other laws or other changes in
circumstances occurring after the commencement of such Restricted Period.

                                      -9-
<PAGE>

         (b) LAPSE AND FORFEITURE. Except as provided in Section 13 hereof, if a
Participant incurs a Termination of Continuous Service for any reason (other
than death, Disability or Retirement), unless the Committee shall otherwise
determine, all Shares of Restricted Stock theretofore awarded to such
Participant and which at the time of such Termination of Continuous Service are
subject to the restrictions imposed by paragraph (a) of this Section 10 shall
upon such Termination of Continuous Service be forfeited and returned to the
Company. If a Participant incurs a Termination of Continuous Service by reason
of death or Disability, then the restrictions with respect to the Ratable
Portion of the Shares of Restricted Stock shall lapse and such Shares shall be
free of restrictions and shall not be forfeited. The Ratable Portion shall be
determined with respect to each separate Award of Restricted Stock issued and
shall be equal to (i) the number of Shares of Restricted Stock awarded to the
Participant multiplied by the portion of the Restricted Period that expired at
the date of the Participant's death or Disability reduced by (ii) the number of
Shares of Restricted Stock awarded with respect to which the restrictions had
lapsed as of the date of the death or Disability of the Participant. Likewise,
on the date set forth in the applicable Award agreement, the Restricted Stock
for which restrictions have not lapsed by the last day of the Restricted Period
shall be forfeited and returned to the Company and thereafter shall be available
for the grant of new Awards under the Plan.

         (c) LEGEND ON CERTIFICATES. Each certificate issued in respect of
Shares of Restricted Stock awarded under the Plan shall be registered in the
name of the Participant and deposited by the Participant, together with a stock
power endorsed in blank, with the Company and shall bear the following (or a
similar) legend:

     "The sale, pledge or other transfer of the shares of stock represented by
     this certificate, whether voluntary, involuntary or by operation of law is
     subject to the terms and conditions (including forfeiture) contained in the
     Interactive Intelligence, Inc. 1999 Stock Option and Incentive Plan and an
     Award agreement entered into between the registered owner and Interactive
     Intelligence, Inc. Copies of such Plan and Award agreement are on file in
     the office of the Secretary of Interactive Intelligence, Inc."

         (d) AWARD AGREEMENT. At the time of an Award of Shares of Restricted
Stock, the Participant shall enter into an Agreement with the Company in a form
specified by the Committee, agreeing to the terms and conditions of the Award,
and to such other matters as the Committee shall in its sole discretion
determine.

         (e) DIVIDEND RIGHTS. At the time of an Award of Shares of Restricted
Stock, the Committee may, in its discretion, determine that the payment to the
Participant of dividends declared or paid on such Shares by the Company or a
specified portion thereof, shall be deferred until the earlier to occur of (i)
the lapsing of the restrictions imposed under paragraph (a) of this Section 10,
or (ii) the forfeiture of such Shares under paragraph (b) of this Section 10,
and shall

                                      -10-
<PAGE>

be held by the Company for the account of the Participant until such time. In
the event of such deferral, there shall be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends, together with interest accrued thereon as
aforesaid, shall be made upon the earlier to occur of the events specified in
(i) and (ii) of the immediately preceding sentence.

         (f) LAPSE OF RESTRICTIONS. At the expiration of the restrictions
imposed by paragraph (a) of this Section 10, the Company shall redeliver to the
Participant (or where the relevant provision of paragraph (b) of this Section 10
applies in the case of a deceased Participant, to his legal representative,
beneficiary or heir) the certificate(s) and stock power deposited with it
pursuant to paragraph (c) of this Section 10 and the Shares represented by such
certificate(s) shall be free of the restrictions referred to in paragraph (a) of
this Section 10. Notwithstanding any other provision of this Section 10 and
Section 12 to the contrary, in the case of grants of Restricted Stock that are
intended to qualify as "performance-based compensation" under Section 162(m) of
the Code, no Shares of Restricted Stock shall become vested unless the
performance goals with respect to such Restricted Stock shall have been
satisfied. If the vesting of Shares of Restricted Stock is accelerated after the
applicable performance goals have been met, the amount of Restricted Stock
distributed shall be discounted by the Committee to reasonably reflect the time
value of money in connection with such early vesting.

         (g) SECTION 162(M) PERFORMANCE RESTRICTIONS. Notwithstanding any other
provision of this Section 10 to the contrary, for purposes of qualifying grants
of Restricted Stock as "performance-based compensation" under Section 162(m) of
the Code, the Committee shall establish restrictions based upon the achievement
of performance goals. The specific targets under the performance goals that must
be satisfied for the Restricted Period to lapse or terminate shall be set by the
Committee on or before the latest date permissible to enable the Restricted
Stock to qualify as "performance-based compensation" under Section 162(m) of the
Code. The business criteria for performance goals under this Section 10 shall be
one or more of the return on equity, total revenues, net earnings, or earnings
per share of the Company as selected by the Committee on, where applicable, a
consolidated basis, for a calendar year calculated in accordance with generally
accepted accounting principles consistently applied. In granting Restricted
Stock that is intended to qualify under Section 162(m), the Committee shall
follow any procedures determined by it in its sole discretion from time to time
to be necessary, advisable or appropriate to ensure qualification of the
Restricted Stock under Section 162(m) of the Code.

         11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of any
change in the Shares by virtue of any stock dividends, stock splits,
recapitalizations, or reclassifications or any acquisition, merger,
consolidation, share exchange, tender offer, or other combination involving

                                      -11-
<PAGE>

the Company that does not constitute a Change in Control but that results in the
acquisition of a subsidiary by the Company, or in the event that other stock
shall be substituted for the Shares as the result of any merger, consolidation,
share exchange, or reorganization or any similar transaction which constitutes a
Change in Control of the Company, the Committee shall correspondingly adjust (a)
the number, kind, and class of Shares which may be delivered under the Plan; (b)
the number, kind, class, and price of Shares subject to outstanding Awards
(except for mergers or other combinations in which the Company is the surviving
entity); and (c) the numerical limits of Section 5, all in such manner as the
Committee in its sole discretion shall determine to be advisable or appropriate
to prevent the dilution or diminution of such Awards; provided, however, in no
event shall the One Hundred Thousand Dollar ($100,000) limit on Incentive Stock
Options contained in Section 9 be affected by an adjustment under this Section
11. The Committee's determination in this respect shall be final and conclusive.

         12. EFFECT OF REORGANIZATION. Awards will be affected by a
Reorganization as follows:

         (a) If the Reorganization is a dissolution or liquidation of the
Company then (i) the restrictions of Section 10(a) on Shares of Restricted Stock
shall lapse, and (ii) each outstanding Option shall terminate, but each
Participant to whom the Option was granted shall have the right, immediately
prior to such dissolution or liquidation to exercise his Option in full,
notwithstanding the provisions of Section 9, and the Company shall notify each
Participant of such right within a reasonable period of time prior to any such
dissolution or liquidation.

         (b) If the Reorganization is a merger or consolidation, upon the
effective date of such Reorganization (i) each Optionee shall be entitled, upon
exercise of his Option in accordance with all of the terms and conditions of the
Plan, to receive in lieu of Shares, Shares of such stock or other securities or
consideration as the holders of Shares shall be entitled to receive pursuant to
the terms of the Reorganization; and (ii) each holder of Restricted Stock shall
receive Shares of such stock or other securities as the holders of Shares
received which shall be subject to the restrictions set forth in Section 10(a)
unless the Committee accelerates the lapse of such restrictions and the
certificate(s) or other instruments representing or evidencing such Shares or
securities shall be legended and deposited with the Company in the manner
provided in Section 10 hereof.

         The adjustments contained in this Section 12 and the manner of
application of such provisions shall be determined solely by the Committee.

         13. EFFECT OF CHANGE IN CONTROL. Unless the Committee shall have
otherwise provided in the Award agreement reflecting the applicable Award, upon
the occurrence of a

                                      -12-
<PAGE>

Change in Control (a) any Restricted Period with respect to Restricted Stock
theretofore awarded to a Participant shall lapse and all Shares awarded as
Restricted Stock shall become fully vested in the Participant to whom such
Shares were awarded and (b) all Options theretofore granted and not fully
exercisable shall become exercisable in full and shall remain so exercisable in
accordance with their terms; provided, however, that no Option which has
previously been exercised or otherwise terminated shall become exercisable.

         14. ASSIGNMENTS AND TRANSFERS. Except as otherwise determined by the
Committee, no Award nor any right or interest of a Participant under the Plan in
any instrument evidencing any Award under the Plan may be assigned, encumbered,
or transferred except, in the event of the death of a Participant, by will or
the laws of descent and distribution.

         15. EMPLOYEE RIGHTS UNDER PLAN. No officer, Employee or other person
shall have a right to be selected as a Participant nor, having been so selected,
to be selected again as a Participant and no officer, Employee or other person
shall have any claim or right to be granted an Award under the Plan or under any
other incentive or similar plan of the Company or any Affiliate. Neither the
Plan nor any action taken thereunder shall be construed as giving any Employee
any right to be retained in the employ of the Company or any Affiliate.

         16. DELIVERY AND REGISTRATION OF STOCK. Except with respect to
Restricted Stock as provided in Section 10, no person shall have any rights of a
shareholder (including, but not limited to, voting and dividend rights) as to
Shares subject to an Option until, after proper exercise of the Option or other
action as may be required by the Committee in its discretion, such Shares shall
have been recorded on the Company's official shareholder records (or the records
of its transfer agents or registrars) as having been issued and transferred to
the Participant. Upon exercise of the Option or any portion thereof, the Company
will have a reasonable period in which to issue and transfer the Shares to the
Participant, and the Participant will not be treated as a shareholder for any
purpose whatsoever prior to such issuance and transfer. No payment or adjustment
shall be made for cash dividends or other rights for which the record date is
prior to the date such Shares are recorded as issued and transferred in the
Company's official shareholder records (or the records of its transfer agents or
registrars), except as provided herein or in an Award agreement. The Company's
obligation to deliver Shares with respect to an Award shall, if the Committee so
determines, be conditioned upon the receipt of a representation as to the
investment intention of the Participant to whom such Shares are to be delivered,
in such form as the Company shall determine to be necessary or advisable to
comply with the provisions of the Securities Act or any other applicable federal
or state securities legislation. It may be provided that any representation
requirement shall become inoperative upon a registration of the Shares or other
action eliminating the necessity of such representation under the Securities Act
or other securities legislation. The Company shall not be required to deliver
any Shares under the Plan prior to (i) the admission of such Shares to listing
on any stock exchange or system on which

                                      -13-
<PAGE>

Shares may then be listed, and (ii) the completion of such registration or other
qualification of such Shares under any state or federal law, rule, or
regulation, as the Company shall determine to be necessary or advisable.

         17. WITHHOLDING TAX. Upon the termination of the Restricted Period with
respect to any Shares of Restricted Stock or the issuance of Shares pursuant to
the exercise of any Option (or at any such earlier time, if any, that an
election is made by the Participant under Section 83(b) of the Code, or any
successor provision thereto, to include the value of such Shares in income), the
Company may, in lieu of requiring the Participant or other person receiving such
Shares, to pay the Company the amount of any taxes which the Company is required
to withhold with respect to such Shares, retain a sufficient number of Shares
held by it to cover the amount required to be withheld. The Company shall have
the right to deduct from all dividends paid with respect to Shares of Restricted
Stock the amount of any taxes which the Company is required to withhold with
respect to such dividend payments.

         Where a Participant or other person is entitled to receive Shares
pursuant to the exercise of an Option pursuant to the Plan, the Company may, in
lieu of requiring the Participant or such other person to pay the Company the
amount of any taxes which the Company is required to withhold with respect to
such Shares, retain a number of such Shares sufficient to cover the amount
required to be withheld.

         18. LOANS.

         (a) LOANS AUTHORIZED. The Company may make loans to a Participant in
connection with Restricted Stock or the exercise of Options subject to the
following terms and conditions and such other terms and conditions not
inconsistent with the Plan, including the rate of interest, if any, as the
Company shall impose from time to time.

         (b) LIMITATIONS ON LOANS. No loan made under the Plan shall exceed (i)
with respect to Options, the sum of (A) the aggregate option price payable upon
exercise of the Option in relation to which the loan is made, plus (B) the
amount of the reasonably estimated income taxes payable by the Participant, and
(ii) with respect to Restricted Stock, the amount of reasonably estimated income
taxes payable by the Participant. In no event may any such loan exceed the
Market Value of the related Shares at the time of the loan.

         (c) MINIMUM TERMS. No loan shall have an initial term exceeding three
(3) years; provided, that loans under the Plan shall be renewable at the
discretion of the Committee; and, provided, further, that the indebtedness under
each loan shall become due and payable on a date no later than (i) one year
after Termination of Continuous Service by the Participant due to

                                      -14-
<PAGE>

death, Disability or Retirement, or (ii) the day of Termination of Continuous
Service by the Participant for any reason other than death, Disability or
Retirement.

         (d) PAYMENT OF LOANS. Loans under the Plan may be satisfied by the
Participant, as determined by the Committee, in cash or, with the consent of the
Committee, in whole or in part in Shares at Market Value on the date of such
payment.

         (e) COLLATERAL. When a loan shall have been made, Shares having an
aggregate Market Value equal to the amount of the loan may, in the discretion of
the Committee, be required to be pledged by the Participant to the Company as
security for payment of the unpaid balance of the loan. Portions of such Shares
may, in the discretion of the Committee, be released from time to time as it
deems not to be needed as security.

         (f) LEGAL REQUIREMENTS. Every loan shall meet all applicable laws,
regulations, and rules of the Federal Reserve Board and any other governmental
agency having jurisdiction.

         19. AMENDMENT, SUSPENSION OR TERMINATION. The Board may supplement,
amend, alter, or discontinue the Plan in its sole discretion at any time and
from time to time, but no supplement, amendment, alteration, or discontinuation
shall be made which would impair the rights of a Participant under an Award
theretofore granted without the Participant's consent, except that any
supplement, amendment, alteration, or discontinuation may be made to (a) avoid a
material charge or expense to the Company or an Affiliate; (b) cause the Plan to
comply with applicable law; or (c) permit the Company or an Affiliate to claim a
tax deduction under applicable law. In addition, subject to the provisions of
this Section 19, the Board, in its sole discretion at any time and from time to
time, may supplement, amend, alter, or discontinue the Plan without the approval
of the Company's shareholders (a) to the extent such approval is not required by
applicable law or the terms of a written agreement; and (b) so long as any such
amendment or alteration does not increase the number of Shares subject to the
Plan (other than pursuant to Section 11) or increase the maximum number of
Options or Shares of Restricted Stock that the Committee may award to an
individual Participant under the Plan. The Committee may supplement, amend,
alter, or discontinue the terms of any Award theretofore granted, prospectively
or retroactively, on the same conditions and limitations (and exceptions to
limitations) as apply to the Board under the foregoing provisions of this
Section 19, and further subject to any approval or limitations the Board may
impose. Notwithstanding any provision of the Plan to the contrary, if any right,
Award or Award agreement under the Plan would cause a transaction of or
acquisition by the Company to be ineligible for "pooling of interest" accounting
treatment that would, but for such right hereunder, otherwise be eligible for
such accounting treatment, the Committee may amend, modify, or adjust the right,
the Award or the Award agreement of a Participant (without the prior consent,
approval, or authorization of the Participant) so that pooling of interest
accounting treatment shall be available with respect to

                                      -15-
<PAGE>

such transaction or acquisition even if any such amendment, modification, or
adjustment would be detrimental to or impair the rights of a Participant under
the Plan.

         20. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective
upon its approval by the holders of at least a majority of the outstanding
Shares at a meeting at which approval of the Plan is considered and shall
continue in effect for a term of ten (10) years from the date of adoption unless
sooner terminated under Section 19 hereof.

         21. LEGAL CONSTRUCTION.

         (a) 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.

         (b) 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 never been included herein.

         (c) REQUIREMENTS OF LAW. The grant of Awards and the issuance of Shares
under the Plan shall be subject to all applicable statutes, laws, rules, and
regulations and to such approvals and requirements as may be required from time
to time by any governmental authorities or any securities exchange or market on
which the Shares are then listed or traded.

         (d) GOVERNING LAW. Except to the extent preempted by the Federal laws
of the United States of America, the Plan and all Award agreements shall be
construed in accordance with and governed by the laws of the State of Indiana
without giving effect to any choice or conflict of law provisions, principles or
rules (whether of the State of Indiana or any other jurisdiction) that would
cause the application of any laws of any jurisdiction other than the State of
Indiana.

         (e) HEADINGS. The descriptive headings, sections, and paragraphs of the
Plan are provided herein for convenience of reference only and shall not serve
as a basis for interpretation or construction of the Plan.

         (f) MISTAKE OF FACT. Any mistake of fact or misstatement of facts shall
be corrected when it becomes known by a proper adjustment to an Award or Award
agreement.

                                      -16-
<PAGE>

         (g) EVIDENCE. Evidence required of anyone under the Plan may be by
certificate, affidavit, document, or other information which the person relying
thereon considers pertinent and reliable, and signed, made, or presented by the
proper party or parties.

         22. NO EFFECT ON EMPLOYMENT OR SERVICE. Neither the Plan nor the grant
of any Awards or the execution of any Award agreement shall confer upon any
Participant any right to continued employment by the Company or shall interfere
with or limit in any way the right of the Company to terminate any Participant's
employment or service at any time, with or without Cause. Employment with the
Company and its Affiliates is on an at-will basis only, unless otherwise
provided by a written employment or severance agreement, if any, between the
Participant and the Company or an Affiliate, as the case may be. If there is any
conflict between the provisions of the Plan and an employment or severance
agreement between a Participant and the Company, the provisions of such
employment or severance agreement shall control, including, but not limited to,
the vesting and nonforfeiture of any Awards.

         23. NO COMPANY OBLIGATION. Unless required by applicable law, the
Company, an Affiliate, the Board of Directors, and the Committee shall not have
any duty or obligation to affirmatively disclose material information to a
record or beneficial holder of Shares or an Award, and such holder shall have no
right to be advised of any material information regarding the Company or any
Affiliate at any time prior to, upon, or in connection with the receipt,
exercise, or distribution of an Award. In addition, the Company, an Affiliate,
the Board of Directors, the Committee, and any attorneys, accountants, advisors,
or agents for any of the foregoing shall not provide any advice, counsel, or
recommendation to any Participant with respect to, without limitation, any
Award, any exercise of an Option, or any tax consequences relating to an Award.

         24. PARTICIPATION. No Employee or consultant shall have the right to be
selected to receive an Award under the Plan or, having been selected, to be
selected to receive a future Award. Participation in the Plan will not give any
Participant any right or claim to any benefit under the Plan, unless such right
or claim has specifically accrued under the terms of the Plan.

         25. LIABILITY AND INDEMNIFICATION. No member of the Board, the
Committee, or any officer or Employee of the Company or any Affiliate shall be
personally liable for any action, failure to act, decision, or determination
made in good faith in connection with the Plan. By participating in the Plan,
each Participant agrees to release and hold harmless the Company and its
Affiliates (and their respective directors, officers, and employees) and the
Committee from and against any tax liability, including, but not limited to,
interest and penalties, incurred by the Participant in connection with his
receipt of Awards under the Plan and the payment and exercise thereof. 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 (a) any
loss, cost,

                                      -17-
<PAGE>

liability, or expense (including, but not limited to, attorneys' fees) that may
be imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he may be a party or in
which he may be involved by reason of any action taken or failure to act under
the Plan or any Award agreement; and (b) any and all amounts paid by him in
settlement thereof, with the Company's prior written approval, or paid by him in
satisfaction of any judgment in any such claim, action, suit, or proceeding
against him; provided, however, that he shall give the Company an opportunity,
at the Company's expense, to handle and defend such claim, action, suit, or
proceeding before he undertakes to handle and defend the same on his 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 Articles of Incorporation or By-Laws, by contract, as a matter of law,
or otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.

         26. 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 or not the existence of such successor is the result of a
Change in Control. The Company shall not, and shall not permit its Affiliates
to, recommend, facilitate, agree, or consent to a transaction or series of
transactions which would result in a Change in Control of the Company unless and
until the person or persons or entity or entities acquiring control of the
Company as a result of such Change in Control agree(s) to be bound by the terms
of the Plan insofar as it pertains to Awards theretofore granted and agrees to
assume and perform the obligations of the Company and its successor.

         27. BENEFICIARY DESIGNATIONS. Any Participant may designate, on such
forms as may be provided by the Committee for such purpose, a beneficiary to
whom any vested but unpaid Award shall be paid in the event of the Participant's
death. Each such designation shall revoke all prior designations by the
Participant and shall be effective only if given in a form and manner acceptable
to the Committee. In the absence of any such designation, any vested benefits
remaining unpaid at the Participant's death shall be paid to the Participant's
estate and, subject to the terms of the Plan and of the applicable Award
agreement, any unexercised vested Award may be exercised by the administrator or
executor of the Participant's estate.

         28. FUNDING. Benefits payable under the Plan to any person will be paid
by the Company from its general assets. Shares to be distributed hereunder shall
be issued directly by the Company from its authorized but unissued Shares or
acquired by the Company on the open market, or a combination thereof. Neither
the Company nor any of its Affiliates shall be required to segregate on their
books or otherwise establish any funding procedure for any amount to be used for
the payment of benefits under the Plan. The Company or any of its Affiliates
may, however, in their sole discretion, set funds aside in investments to meet
any anticipated obligations under the Plan. Any such action or set-aside shall
not be deemed to create a trust of

                                      -18-
<PAGE>

any kind between the Company or any of its Affiliates and any Participant or
other person entitled to benefits under the Plan or to constitute the funding of
any Plan benefits. Consequently, any person entitled to a payment under the Plan
will have no rights greater than the rights of any other unsecured general
creditor of the Company or its Affiliates.

                                      -19-

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