EXHIBIT 10.17

EXHIBIT 10.17


AVALON PROPERTIES, INC.
1993 STOCK OPTION AND INCENTIVE PLAN


SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS

The name of the plan is the Avalon Properties, Inc. 1993 Stock Option
and Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and
enable the officers, employees and Directors of Avalon Properties, Inc. (the
"Company") and its Subsidiaries upon whose judgment, initiative and efforts the
Company largely depends for the successful conduct of its business to acquire a
proprietary interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company's welfare will assure a closer
identification of their interests with those of the Company, thereby stimulating
their efforts on the Company's behalf and strengthening their desire to remain
with the Company.

The following terms shall be defined as set forth below:

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

"AWARD" or "AWARDS," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options and Non-Qualified
Stock Options.

"BOARD" means the Board of Directors of the Company.

"CAUSE" means and shall be limited to a vote of the Board of Directors
resolving that the participant should be dismissed as a result of (i) any
material breach by the participant of any agreement to which the participant and
the Company are parties, (ii) any act (other than retirement) or omission to act
by the participant which may have a material and adverse effect on the business
of the Company or any Subsidiary or on the participant's ability to perform
services for the Company or any Subsidiary, including, without limitation, the
participant being convicted of any crime (other than ordinary traffic
violations), or (iii) any material misconduct or neglect of duties by the
participant in connection with the business or affairs of the Company or any
Subsidiary.

"CHANGE OF CONTROL" is defined in Section 10.

"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.

"COMMITTEE" means the Board or any Committee of the Board referred to
in Section 2.


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"DISABILITY" means disability as set forth in Section 22(e)(3) of the
Code.

"DISINTERESTED PERSON" means a Non-Employee Director who qualifies as
such under Rule 16b-3(c)(2)(i) promulgated under the Act, or any successor
definition under the Act.

"EFFECTIVE DATE" means the date on which the Plan is approved by
shareholders as set forth in Section 12.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related rules, regulations and interpretations.

"FAIR MARKET VALUE" on any given date means the last reported sale
price at which Stock is traded on such date or, if no Stock is traded on such
date, the most recent date on which Stock was traded, as reflected on the New
York Stock Exchange or, if applicable, any other national stock exchange on
which the Stock is traded. Notwithstanding the foregoing, the Fair Market Value
on the first day of the Company's initial public offering shall mean the initial
public offering price.

"INCENTIVE STOCK OPTION" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of the Code.

"NON-EMPLOYEE DIRECTOR" means a member of the Board who is not also an
employee of the Company or any Subsidiary.

"NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.

"OPTION" or "STOCK OPTION" means any option to purchase shares of Stock
granted pursuant to Section 5.

"STOCK" means the Common Stock, $.01 par value per share, of the
Company, subject to adjustments pursuant to Section 3.

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

SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS
AND DETERMINE AWARDS

(a) COMMITTEE. Prior to the date of the closing of the Company's
initial public offering, the Plan shall be administered by the Board. On and
after the date of the closing


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of the Company's initial public offering, the Plan shall be administered by all
of the Non-Employee Director members of the Compensation Committee of the Board,
or any other committee of not less than two Non-Employee Directors performing
similar functions, as appointed by the Board from time to time. Each member of
the Committee shall be a Disinterested Person on and after the date of the
closing of the Company's initial public offering.

(b) POWERS OF COMMITTEE. The Committee shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:

(i) to select the officers and other employees of the Company
and its Subsidiaries to whom Awards may from time to time be granted;

(ii) to determine the time or times of grant, and the extent,
if any, of Incentive Stock Options or Non-Qualified Stock Options
granted to any one or more participants;

(iii) to determine the number of shares to be covered by any
Award;

(iv) to determine and modify the terms and conditions,
including restrictions, not inconsistent with the terms of the Plan, of
any Award, which terms and conditions may differ among individual
Awards and participants, and to approve the form of written instruments
evidencing the Awards;

(v) to accelerate the exercisability or vesting of all or any
portion of any Option;

(vi) subject to the provisions of Section 5(a)(iii), to extend
the period in which Stock Options may be exercised; and

(vii) to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written
instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in
connection with the Plan; and to otherwise supervise the administration
of the Plan.

All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants.

SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

(a) SHARES ISSUABLE. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 10% of the shares of Stock sold
in the Company's initial public offering. For purposes of this limitation, the
shares of Stock


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underlying any Awards which are forfeited, cancelled, reacquired by the Company,
satisfied without the issuance of Stock or otherwise terminated (other than by
exercise) shall be added back to the shares of Stock available for issuance
under the Plan so long as the participants to whom such Awards had been
previously granted received no benefits of ownership of the underlying shares of
Stock to which the Award related. Subject to such overall limitation, shares may
be issued up to such maximum number pursuant to any type or types of Award,
including Incentive Stock Options. Shares issued under the Plan may be
authorized but unissued shares or shares reacquired by the Company.

(b) STOCK DIVIDENDS, MERGERS, ETC. In the event of a stock dividend,
stock split or similar change in capitalization affecting the Stock, the
Committee shall make appropriate adjustments in (i) the number and kind of
shares of stock or securities on which Awards may thereafter be granted, (ii)
the number and kind of shares remaining subject to outstanding Awards, and (iii)
the option or purchase price in respect of such shares. In the event of any
merger, consolidation, dissolution or liquidation of the Company, the Committee
in its sole discretion may, as to any outstanding Awards, make such substitution
or adjustment in the aggregate number of shares reserved for issuance under the
Plan and in the number and purchase price (if any) of shares subject to such
Awards as it may determine and as may be permitted by the terms of such
transaction, or amend or terminate such Awards upon such terms and conditions as
it shall provide (which, in the case of the termination of the vested portion of
any Award, shall require payment or other consideration which the Committee
deems equitable in the circumstances).

(c) SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or a Subsidiary as
the result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances.

SECTION 4. ELIGIBILITY

Participants in the Plan will be such full or part-time officers and
other employees of the Company and its Subsidiaries who are responsible for or
contribute to the management, growth or profitability of the Company and its
Subsidiaries and who are selected from time to time by the Committee, in its
sole discretion. Non-Employee Directors are also eligible to participate in the
Plan but only to the extent provided in Section 5(c) below.

SECTION 5. STOCK OPTIONS

Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.


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Stock Options granted under the Plan may be either Incentive Stock
Options or Non-Qualified Stock Options. To the extent that any Stock Option does
not qualify as an Incentive Stock Option, it shall constitute a Non-Qualified
Stock Option.

No Incentive Stock Option shall be granted under the Plan after
November 11, 2003.

(a) STOCK OPTIONS GRANTED TO EMPLOYEES. The Committee in its discretion
may grant Stock Options to employees of the Company or any Subsidiary. Stock
Options granted to employees pursuant to this Section 5(a) shall be subject to
the following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable:

(i) EXERCISE PRICE. The exercise price per share for the Stock
covered by a Stock Option granted pursuant to this Section 5(a) shall
be determined by the Committee at the time of grant but shall be not
less than 100% of Fair Market Value on the date of grant. If an
employee owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation and an Incentive Stock Option is
granted to such employee, the option price shall be not less than 110%
of Fair Market Value on the grant date.

(ii) GRANT OF OPTIONS IN LIEU OF CASH BONUS. Upon the request
of an employee and with the consent of the Committee, such employee may
elect to receive a Stock Option each calendar year in lieu of cash
bonus to which he may become entitled during the following year
pursuant to any other plan of the Company, but only if such employee
makes an irrevocable election to waive receipt of all or a portion of
such cash bonus. Such election shall be made no later than 15 days
preceding January 1 of the calendar year in which the cash bonus would
otherwise be paid. A Stock Option shall be granted to each employee who
made such an irrevocable election on the date the waived cash bonus
would otherwise be paid; provided, however, that with respect to an
employee who is subject to Section 16 of the Act, if such grant date is
not at least six months and one day from the date of the election, the
grant shall be delayed until the date which is six months and one day
from the date of the election (or the next following business day, if
such date is not a business day). The exercise price per share shall be
the Fair Market Value of the Stock on the date the Stock Option is
granted. The number of shares subject to the Stock Option shall be
determined by dividing the amount of the waived cash bonus by the Fair
Market Value of the Stock on the date the Stock Option is granted. The
Stock Option shall be granted for whole number of shares so determined;
the value of any fractional share shall be paid in cash. An employee
may revoke his election under this Section 5(a)(ii) on a prospective
basis at any time; provided, however, that with respect to an employee
who is subject to Section 16 of the Act, such revocation shall only be
effective six months and one day following the date of such revocation.


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(iii) OPTION TERM. The term of each Stock Option shall be
fixed by the Committee, but except as provided in Sections 5(a)(vii)
and (viii) no Incentive Stock Option shall be exercisable more than ten
years after the date the option is granted. If an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of
the Code) more than 10% of the combined voting power of all classes of
stock of the Company or any Subsidiary or parent corporation and an
Incentive Stock Option is granted to such employee, the term of such
option shall be no more than five years from the date of grant.

(iv) EXERCISABILITY; RIGHTS OF A SHAREHOLDER. Stock Options
shall become vested and exercisable at such time or times, whether or
not in installments, as shall be determined by the Committee at or
after the grant date; provided, however, that Stock Options in lieu of
cash bonus shall be exercisable immediately. The Committee may at any
time accelerate the exercisability of all or any portion of any Stock
Option. An optionee shall have the rights of a shareholder only as to
shares acquired upon the exercise of a Stock Option and not as to
unexercised Stock Options.

(v) METHOD OF EXERCISE. Stock Options may be exercised in
whole or in part, by giving written notice of exercise to the Company,
specifying the number of shares to be purchased. Payment of the
purchase price may be made by one or more of the following methods:

(A) In cash, by certified or bank check or other
instrument acceptable to the Committee;

(B) In the form of shares of Stock that are not then
subject to restrictions under any Company plan and that have
been held by the optionee for at least six months, if
permitted by the Committee in its discretion. Such surrendered
shares shall be valued at Fair Market Value on the exercise
date; or

(C) By the optionee delivering to the Company a
properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company
cash or a check payable and acceptable to the Company to pay
the purchase price; provided that in the event the optionee
chooses to pay the purchase price as so provided, the optionee
and the broker shall comply with such procedures and enter
into such agreements of indemnity and other agreements as the
Committee shall prescribe as a condition of such payment
procedure. Payment instruments will be received subject to
collection.

The delivery of certificates representing shares of Stock to be purchased
pursuant to the exercise of a Stock Option will be contingent upon receipt from
the Optionee (or a purchaser acting in his stead in accordance with the
provisions of the Stock Option) by


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the Company of the full purchase price for such shares and the fulfillment of
any other requirements contained in the Stock Option or applicable provisions of
laws.

(vi) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of
descent and distribution and all Stock Options shall be exercisable,
during the optionee's lifetime, only by the optionee.

(vii) TERMINATION BY DEATH. If any optionee's employment by
the Company and its Subsidiaries terminates by reason of death, the
Stock Option may thereafter be exercised, to the extent exercisable at
the date of death, by the legal representative or legatee of the
optionee, for a period of six months (or such longer period as the
Committee shall specify at any time) from the date of death.

(viii) TERMINATION BY REASON OF DISABILITY.

(A) Any Stock Option held by an optionee whose
employment by the Company and its Subsidiaries has terminated
by reason of Disability may thereafter be exercised, to the
extent it was exercisable at the time of such termination, for
a period of twelve months (or such longer period as the
Committee shall specify at any time) from the date of such
termination of employment.

(B) The Committee shall have sole authority and
discretion to determine whether a participant's employment has
been terminated by reason of Disability.

(C) Except as otherwise provided by the Committee at
the time of grant, the death of an optionee during a period
provided in this Section 5(a)(viii) for the exercise of a
Non-Qualified Stock Option shall extend such period for six
months from the date of death.

(ix) TERMINATION FOR CAUSE. If any optionee's employment by
the Company and its Subsidiaries has been terminated for Cause, any
Stock Option held by such optionee shall terminate and be of no further
force and effect after 30 days from the date of termination of
employment or at the expiration of the stated term of the Option, if
earlier.

(x) OTHER TERMINATION. Unless otherwise determined by the
Committee, if an optionee's employment by the Company and its
Subsidiaries terminates for any reason other than death, Disability, or
for Cause, any Stock Option held by such optionee may thereafter be
exercised, to the extent it was exercisable on the date of termination
of employment, for three months (or such longer period as the Committee
shall specify at any time) from the date of termination of employment
or until the expiration of the stated term of the Option, if earlier.


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(xi) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent
required for "incentive stock option" treatment under Section 422 of
the Code, the aggregate Fair Market Value (determined as of the time of
grant) of the Stock with respect to which Incentive Stock Options
granted under this Plan and any other plan of the Company or its
Subsidiaries become exercisable for the first time by an optionee
during any calendar year shall not exceed $100,000.

(xii) FORM OF SETTLEMENT. Shares of Stock issued upon exercise
of a Stock Option shall be free of all restrictions under the Plan,
except as otherwise provided in this Plan.

(b) RELOAD OPTIONS. At the discretion of the Committee, Options granted
under Section 5(a) may include a so-called "reload" feature pursuant to which an
optionee exercising an option by the delivery of a number of shares of Stock in
accordance with Section 5(a)(v)(B) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair Market Value of the
Stock on the date the additional Option is granted and with the same expiration
date as the original Option being exercised, and with such other terms as the
Committee may provide) to purchase that number of shares of Stock equal to the
number delivered to exercise the original Option.

(c) STOCK OPTIONS GRANTED TO NON-EMPLOYEE DIRECTORS.

(i) AUTOMATIC GRANT OF OPTIONS. Each Non-Employee Director who
becomes a Director of the Company on or before the date 30 days after
the closing of the Company's initial public offering shall
automatically be granted a Non-Qualified Stock Option to purchase 5,000
shares of Stock on such date at a price per share equal to the greater
of the Fair Market Value on the date of grant or $20.50. Each
Non-Employee Director who is serving as Director of the Company on the
fifth business day after each annual meeting of stockholders, beginning
with the 1994 annual meeting, shall automatically be granted on such
day a Non-Qualified Stock Option to acquire 3,000 shares of Stock.
Except as provided in the preceding sentence, the exercise price per
share for the Stock covered by a Stock Option granted hereunder shall
be equal to the Fair Market Value of the Stock on the date the Stock
Option is granted.

(ii) GRANT OF OPTIONS IN LIEU OF DIRECTOR'S FEES. Each
Non-Employee Director shall receive a Non-Qualified Stock Option each
calendar year in lieu of cash director's fees he would otherwise
receive for such year, but only if the Non-Employee Director makes an
irrevocable election to waive receipt of all or a portion of such cash
director's fees. Such election shall be made during the 30-day period
immediately preceding January 1 of a calendar year and shall be
effective six months and one day following the date of such election. A
Non-Qualified Stock Option shall be granted to each Non-Employee
Director who made such an irrevocable election on each July 15 and
January 15 (or the next following business day, if such date is not a
business day) with respect to the waived amount of director's fees
earned for the six-month period ending June 30 and December 31,



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respectively. The exercise price per share shall be the Fair Market
Value of the Stock on the date the Stock Option is granted. The number
of shares subject to the Stock Option shall be determined by dividing
the amount of the waived directors' fees for the applicable six-month
period by the Fair Market Value of the Stock on the date the Stock
Option is granted. The Stock Option shall be granted for whole number
of shares so determined; the value of any fractional share shall be
paid in cash. A Non-Employee Director may revoke his election under
this Section 5(c)(ii) at any time; provided, however, that such
revocation shall only be effective six months and one day following the
date of such revocation.

(iii) EXERCISE; TERMINATION; NON-TRANSFERABILITY.

(A) Except as provided in Section 10, no Option
granted under Section 5(c)(i) may be exercised before the
first anniversary of the date upon which it was granted;
provided, however, that any Option so granted shall become
exercisable upon the termination of service of the
Non-Employee Director because of Disability or death. All
Options granted under Section 5(c)(ii) shall be immediately
exercisable. No Option issued under this Section 5(c) shall be
exercisable after the expiration of ten years from the date
upon which such Option is granted.

(B) The rights of a Non-Employee Director in an
Option granted under Section 5(c) shall terminate six months
after such Director ceases to be a Director of the Company or
the specified expiration date, if earlier; provided, however,
that if the Non-Employee Director ceases to be a Director for
Cause, the rights shall terminate immediately on the date on
which he ceases to be a Director.

(C) No Stock Option granted under this Section 5(c)
shall be transferable by the optionee otherwise than by will
or by the laws of descent and distribution, and such Options
shall be exercisable, during the optionee's lifetime only by
the optionee. Any Option granted to a Non-Employee Director
and outstanding on the date of his death may be exercised by
the legal representative or legatee of the optionee for a
period of six months from the date of death or until the
expiration of the stated term of the option, if earlier.

(D) Options granted under this Section 5(c) may be
exercised only by written notice to the Company specifying the
number of shares to be purchased. Payment of the full purchase
price of the shares to be purchased may be made by one or more
of the methods specified in Section 5(a)(v). An optionee shall
have the rights of a shareholder only as to shares acquired
upon the exercise of a Stock Option and not as to unexercised
Stock Options.

(iv) LIMITED TO NON-EMPLOYEE DIRECTORS. The provisions of this
Section 5(c) shall apply only to Options granted or to be granted to
Non-Employee


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Directors, and shall not be deemed to modify, limit or otherwise apply
to any other provision of this Plan or to any Option issued under this
Plan to a participant who is not a Non-Employee Director of the
Company. To the extent inconsistent with the provisions of any other
Section of this Plan, the provisions of this Section 5(c) shall govern
the rights and obligations of the Company and Non-Employee Directors
respecting Options granted or to be granted to Non-Employee Directors.
The provisions of this Section 5(c) which affect the price, date of
exercisability, option period or amount of shares under an option shall
not be amended more than once in any six-month period, other than to
comport with changes in the Code or ERISA.

SECTION 6. TAX WITHHOLDING

(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the
date as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such income.
The Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant.

(b) PAYMENT IN SHARES. A participant may elect to have such tax
withholding obligation satisfied, in whole or in part, by (i) authorizing the
Company to withhold from shares of Stock to be issued pursuant to any Award a
number of shares with an aggregate Fair Market Value (as of the date the
withholding is effected) that would satisfy the withholding amount due, or (ii)
transferring to the Company shares of Stock owned by the participant with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due. With respect to any participant who is
subject to Section 16 of the Act, the following additional restrictions shall
apply:

(A) the election to satisfy tax withholding obligations
relating to an Award in the manner permitted by this Section 6(b) shall
be made either (1) during the period beginning on the third business
day following the date of release of quarterly or annual summary
statements of revenues of the Company and ending on the twelfth
business day following such date, or (2) at least six months prior to
the date as of which the receipt of such an Award first becomes a
taxable event for Federal income tax purposes;

(B) such election shall be irrevocable;

(C) such election shall be subject to the consent or
disapproval of the Committee; and

(D) the Stock withheld to satisfy tax withholding, if granted
at the discretion of the Committee, must pertain to an Award which has
been held by the participant for at least six months from the date of
grant of the Award.


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Notwithstanding the foregoing, the first sentence of Section 6(b)(A) shall not
be applicable until the Company has been subject to the reporting requirements
of the Act for at least a year prior to the election and has filed all reports
and statements required to be filed pursuant to that Section for that year.

SECTION 7. TRANSFER, LEAVE OF ABSENCE, ETC.

For purposes of the Plan, the following events shall not be deemed a
termination of employment:

(a) a transfer to the employment of the Company from a Subsidiary or
from the Company to a Subsidiary, or from one Subsidiary to another; or

(b) an approved leave of absence for military service or sickness, or
for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.

SECTION 8. AMENDMENTS AND TERMINATION

The Board may at any time amend or discontinue the Plan and the
Committee may at any time amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price, but such price, if any, must satisfy the
requirements which would apply to the substitute or amended Award if it were
then initially granted under this Plan) for the purpose of satisfying changes in
law or for any other lawful purpose, but no such action shall adversely affect
rights under any outstanding Award without the holder's consent. To the extent
required by the Code to ensure that Options granted hereunder qualify as
Incentive Stock Options and to the extent required by the Act to ensure that
Awards and Options granted under the Plan are exempt under Rule 16b-3
promulgated under the Act, Plan amendments shall be subject to approval by the
Company's stockholders.


SECTION 9. STATUS OF PLAN

With respect to the portion of any Award which has not been exercised
and any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards.

SECTION 10. CHANGE OF CONTROL PROVISIONS

Upon the occurrence of a Change of Control as defined in this Section
10:


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(a) Each Stock Option shall automatically become fully exercisable
notwithstanding any provision to the contrary herein.

(b) "CHANGE OF CONTROL" shall mean the occurrence of any one of the
following events:

(i) any "PERSON," as such term is used in Sections 13(d) and
14(d) of the Act (other than the Company, any of its Subsidiaries, any
trustee, fiduciary or other person or entity holding securities under
any employee benefit plan of the Company or any of its Subsidiaries),
together with all "affiliates" and "associates" (as such terms are
defined in Rule 12b-2 under the Act) of such person, shall become the
"beneficial owner" (as such term is defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company representing
30% or more of either (A) the combined voting power of the Company's
then outstanding securities having the right to vote in an election of
the Company's Board of Directors ("Voting Securities") or (B) the then
outstanding shares of Stock of the Company (in either such case other
than as a result of acquisition of securities directly from the
Company); or

(ii) persons who, as of the date of the closing of the
Company's initial public offering, constitute the Company's Board of
Directors (the "Incumbent Directors") cease for any reason, including,
without limitation, as a result of a tender offer, proxy contest,
merger or similar transaction, to constitute at least a majority of the
Board, provided that any person becoming a director of the Company
subsequent to the Closing of the Company's initial public offering
whose election or nomination for election was approved by a vote of at
least a majority of the Incumbent Directors shall, for purposes of this
Plan, be considered an Incumbent Director; or

(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company or any Subsidiary where the
stockholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, shares representing in the aggregate 30% of the
voting stock of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of
the Company or (C) any plan or proposal for the liquidation or
dissolution of the Company.

Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of Stock or other Voting Securities outstanding, increases (x)
the proportionate number of shares of Stock beneficially owned by any person to
30% or more of the shares of Stock then outstanding or (y) the proportionate
voting power represented by the Voting Securities beneficially owned by any
person to 30% or more of the combined voting power of all then


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outstanding Voting Securities; PROVIDED, HOWEVER, that if any person referred to
in clause (x) or (y) of this sentence shall thereafter become the beneficial
owner of any additional shares of Stock or other Voting Securities (other than
pursuant to a stock split, stock dividend, or similar transaction), then a
"CHANGE OF CONTROL" shall be deemed to have occurred for purposes of the
foregoing clause (i).

SECTION 11. GENERAL PROVISIONS

(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Committee
may require each person acquiring shares pursuant to an Award to represent to
and agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.

No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange requirements have
been satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Stock and Awards as it deems
appropriate.

(b) DELIVERY OF STOCK CERTIFICATES. Delivery of stock certificates to
participants under this Plan shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have delivered such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.

(c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, subject to stockholder approval if
such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan and
the grant of Awards do not confer upon any employee any right to continued
employment with the Company or any Subsidiary.

SECTION 12. EFFECTIVE DATE OF PLAN

The Plan shall become effective upon approval by the holders of a
majority of the shares of capital stock of the Company present or represented
and entitled to vote at a meeting of stockholders. Subject to such approval by
the stockholders, and to the requirement that no Stock may be issued hereunder
prior to such approval, Stock Options and other Awards may be granted hereunder
on and after adoption of the Plan by the Board.

SECTION 13. GOVERNING LAW

This Plan shall be governed by Maryland law except to the extent such
law is preempted by federal law.



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