FAIRFIELD COMMUNITIES INC
EXHIBIT 10.23
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>24
<FILENAME>0024.txt
<DESCRIPTION>EXHIBIT 10.23
<TEXT>






                              EMPLOYMENT AGREEMENT
                              --------------------

     THIS EMPLOYMENT AGREEMENT (the "Agreement"), executed effective as of March
27, 2000, is by and between Fairfield Communities,  Inc., a Delaware corporation
(the "Company"), and Matthew J. Durfee ("Executive").

                                   WITNESSETH:

     WHEREAS,  Executive is Senior Vice President,  Human Resources  (subject to
possible future changes in job title, the "Officer Position") of the Company and
has made and is expected to continue to make major  contributions  to the short-
and long-term profitability, growth and financial strength of the Company;

     WHEREAS,  the  Company  desires  (a) to assure  itself of both  present and
future  continuity of management and (b) to provide certain minimum  termination
benefits for Executive; and

     WHEREAS,  Executive  is willing to render  services  to the  Company on the
terms and subject to the conditions set forth in this Agreement.

     NOW, THEREFORE, the Company and Executive agree as follows:

     1.  Employment.  The Company agrees to and does hereby employ  Executive to
         ----------
perform  the  duties  of  the  Officer  Position,  and  Executive  accepts  such
employment,  upon the terms and  conditions  set forth  herein.  During the Term
hereof,  prior to the termination of Executive's  employment,  unless  otherwise
agreed by the Chief  Executive  Officer of the Company,  Executive  shall not be
engaged in any other  employment or business  activities,  shall devote his full
business  time and  effort to the  Company  and shall not serve as an officer or
director of any public company or other "for profit" enterprise,  other than the
Company and its subsidiaries and affiliates.

     2. Term.  The term of this Agreement  shall be the period  commencing as of
        ----
the date set forth above and continuing  thereafter  through a date representing
the length of time defined herein as the "Severance  Period"  following the date
either the Company or Executive,  as the case may be, gives  termination  notice
(the "Notice")  hereunder (the "Term");  provided that the minimum Term shall be
automatically extended (regardless of whether or not the "Notice" has previously
been  given by the  Company)  through  a date  representing  the  length of time
defined  herein as the  "Severance  Period" plus one year  following the date on
which a "Change in Control" occurs; and further provided,  that it is understood
that  if  Executive  remains  employed  by the  Company  after  the  Term,  such
employment shall be "at-will" unless different terms are established in writing.

     The  term  "Change  in  Control"  shall  mean the  happening  of any of the
following:

     (a) During  any  period of 24  consecutive  months,  ending  after the date
hereof:
<PAGE>

          (i)  individuals who were directors of the Company at the beginning of
     such 24-month period, and

          (ii) any new director whose election or nomination for election by the
     Board of  Directors  was  approved by a vote of the greater of (A) at least
     two-thirds  (2/3),  or (B) four  affirmative  votes,  in each case,  of the
     directors  then still in office who were either  directors at the beginning
     of such 24-month  period or whose  election or nomination  for election was
     previously so approved

cease for any reason to  constitute  a majority of the Board of Directors of the
Company;

     (b) Any person or entity (other than the Company or its Subsidiary employee
benefit plan or plans or any trustee of or  fiduciary  with respect to such plan
or plans when acting in such  capacity),  or any group acting in concert,  shall
beneficially own,  directly or indirectly,  more than fifty percent (50%) of the
total voting power represented by the then outstanding securities of the Company
entitled to vote generally in the election of directors ("Voting Securities");

     (c) Upon a merger,  combination,  consolidation  or  reorganization  of the
Company, other than a merger, combination, consolidation or reorganization which
would result in (i) the Voting Securities of the Company outstanding immediately
prior thereto  continuing to represent  (either by remaining  outstanding  or by
being converted into Voting  Securities of the surviving entity) at least 50% of
the voting power  represented  by the Voting  Securities  of the Company or such
surviving  entity  outstanding  immediately  after such  transaction and (ii) at
least such 50% of voting  power  continuing  to be held in the  aggregate by the
holders  of the  Voting  Securities  of the  Company  immediately  prior to such
transaction  (conditions  (i)  and  (ii)  are  referred  to as the  "Continuance
Conditions"); or

     (d) All or  substantially  all of the  assets  of the  Company  are sold or
otherwise  disposed of, whether in one transaction or a series of  transactions,
unless the Continuance  Conditions shall have been satisfied with respect to the
purchaser of such assets.

     3.  Duties  and  Services.  Executive  agrees to serve the  Company  in the
         ---------------------
Officer Position, and to devote such working time as is reasonably necessary for
proper  performance  of the duties and  obligations  attaching  to such  office.
Executive also agrees to perform from time to time such other executive services
as the Company shall  reasonably  request,  provided that such services shall be
consistent with his position and status in the Officer Position. In attending to
the business and affairs of the Company,  Executive  agrees to serve the Company
faithfully, diligently and to the best of his ability.

     4. Compensation. As consideration for the services to be rendered hereunder
        ------------
by Executive,  the Company  agrees to pay  Executive,  and  Executive  agrees to
accept,  payable in accordance with the Company's standard payroll practices for
executives,  but payable in not less than monthly installments,  compensation of
One Hundred Seventy Five Thousand  Dollars  ($175,000) per annum or such greater
amount  as may be  determined  from  time  to  time by the  Company  (the  "Base
Salary").


<PAGE>


     5.  Incentive  and  Transition  Compensation.  The Company may, in its sole
         ----------------------------------------
discretion,  establish incentive  compensation  programs applicable to Executive
from time to time during the Term hereof.  Executive  shall  participate  in the
2000 incentive  compensation program applicable to the senior executive officers
of the  Company,  without pro rating the award for the part of the year prior to
his employment with the Company.  In connection with  Executive's  employment by
the Company,  subject to the conditions  that  Executive's  employment  with the
Company is not  terminated  (a) prior to December  31,  2000 due to  Executive's
resignation  (except due to  "Constructive  Discharge") or death or (b) prior to
payment, due to "Cause" (or Executive resigns in anticipation of termination for
"Cause"), then Executive will be paid a minimum amount of incentive compensation
for 2000,  payable in 2001 at the time incentive  compensation is generally paid
to executive  officers of the Company,  equal to $87,500,  less applicable taxes
and deductions,  regardless of the financial  performance of the Company. In the
event that Executive remains employed by the Company on the first anniversary of
a "Change in Control",  then he shall,  within five (5) calendar  days from such
anniversary  date,  be paid a one time  transition  payment (in  addition to any
incentive  compensation  plan which may then be in effect)  equal to 100% of his
Base Salary.

     6. Termination for Cause.
        ---------------------

     (a) In the event that the Company  provides  Executive  with written notice
terminating  his  employment  for  "Cause",  as  defined in  Section  6(b),  all
compensation to Executive pursuant to Section 4 in respect of periods after such
discharge shall terminate  immediately  upon such  termination,  and the Company
shall have no further obligations with respect thereto, nor shall the Company be
obligated to pay  Executive  termination  pay under Section 8 or any accrued but
unpaid incentive compensation.

     (b)  For the  purposes  of  this  Agreement,  "Cause"  shall  mean  (i) the
commission  by  Executive  of an act of fraud,  embezzlement,  theft or  willful
breach of a material  fiduciary duty to the Company  (including the unauthorized
disclosure of confidential or proprietary  information of material  significance
concerning  the  Company);  (ii) the  commission by Executive of a breach of any
material covenant, provision, term, condition,  understanding or undertaking set
forth in this  Agreement;  (iii) the  commission  by  Executive  (other  than in
Executive's  capacity  as an agent of the  Company)  of a crime  constituting  a
felony under applicable law (or a plea of nolo contendere in lieu thereof); (iv)
the exposure of the Company to any criminal  liability  substantially  caused by
the conduct of Executive which results, or may reasonably be expected to result,
in a material adverse effect upon the Company's business, operations,  financial
condition or results of operations or is reasonably expected to cause a material
difficulty  in  obtaining  registration  for  the  Company's  products;  (v) the
exposure of the Company to any civil  liability  caused by Executive's  unlawful
harassment in employment;  (vi) any habitual absenteeism,  gross negligence, bad
faith or willful  misconduct  by Executive  in the  performance  of  Executive's
duties to the  Company  which  conduct  results in a material  detriment  to the
Company;  (vii) the  continued,  repeated,  intentional  and willful  refusal to
perform the duties associated with Executive's position with the Company,  which
is not cured within 15 days following notice to Executive; or (viii) Executive's
habitual abuse of alcohol or any controlled  substance or Executive's  reporting
to work under the  influence  of alcohol or a controlled  substance  (other than
those for which Executive is taking under a current prescription), but expressly
excluding
<PAGE>

(with  respect to  consumption  of alcohol  only)  occasions in which  Executive
participates in work related socializing or entertaining.

     7. Termination Without Cause. Either the Company or Executive may terminate
        -------------------------
Executive's  employment without Cause, but only upon delivery to the other party
of a written notice of termination specifying a termination date, in the case of
a notice by Executive,  of 30 days after the date of delivery of such notice. In
the event of a notice by  Executive,  the Company  may, at any time  thereafter,
notify  Executive that he is excused from working for the remaining  duration of
the 30 day notice  period,  without  incurring  any  liability  for  termination
compensation  as a result  thereof,  provided,  however,  that the Company shall
continue to pay  Executive's  Base  Salary  during the  remainder  of the 30 day
notice period.  Notwithstanding  the Term of this Agreement and Section 4 hereof
relating  to the  annual  salary  to be paid  to  Executive  during  Executive's
employment  by the  Company,  nothing in this  Agreement  should be construed as
conferring  any right of  Executive to be employed by the Company for a fixed or
definite term.  Subject to Section 8 hereof,  Executive  agrees that the Company
may dismiss  Executive  under this Section  without regard to (a) any general or
specific  policies  (whether  written or oral) of the  Company  relating  to the
employment  or  termination  of  employment  of  Company  employees;  or (b) any
statements  made to Executive,  whether made orally or contained in any document
or  instrument,   pertaining  to  Executive's  relationship  with  the  Company.
Notwithstanding   anything  to  the  contrary   contained  herein,   Executive's
employment by the Company is not for any  specified  term, is at-will and may be
terminated  by the Company  pursuant to this  Section at any time by delivery of
the notice referred to herein, for any reason, without any liability whatsoever,
except with respect to the payment provided for in Section 8.

     8. Termination Compensation.
        ------------------------

     (a) If, during the Term,  Executive's  employment is terminated (i) for any
reason other than (A) pursuant to Section 6(a),  (B) by reason of death,  (C) by
reason of  "Disability"  or (D) by notice by  Executive  pursuant  to  Section 7
hereof or (ii) by Executive due to  "Constructive  Discharge" (the occurrence of
(a)(i) or (a)(ii) being referred to as being "Terminated  Without Cause"),  then
Executive  shall receive  termination pay in an amount equal to one and one half
years (the "Severance Period") of his Base Salary. Unless the Company elects, in
its sole discretion, to pay such amount in a lump sum, the termination pay shall
be payable in  accordance  with the  Company's  standard  payroll  practices for
executives,  but  payable  in not  less  than  monthly  installments,  it  being
understood  that such  payments  may extend  beyond the  expiration  of the Term
hereof. The obligation of the Company to make continuing payments of termination
pay to  Executive  is  expressly  conditioned  upon  Executive  complying in all
respects, and continuing to comply in all respects, with Executive's obligations
under Sections 9, 10, 11 and 15 hereof  following the termination of Executive's
employment.

     (b) In the event that  Executive is  Terminated  Without Cause prior to the
first  anniversary  following  a Change  in  Control,  then in  addition  to the
termination  pay  provided  in Section  8(a) above,  Executive  shall be paid an
amount equal to 100% of his Base Salary. Such amount shall be paid in a lump sum
within ten (10) calendar days following his termination date.

     (c) For the  purposes of this  Agreement,  "Constructive  Discharge"  shall
mean:


<PAGE>


          (i) any reduction in Base Salary;

          (ii)  following the  occurrence  of a "Change in Control",  a required
     relocation  of  Executive  of more than fifty  (50) miles from  Executive's
     current job location,  provided that, it is understood that Executive's job
     responsibilities will require that he travel extensively to other locations
     on the Company's business; or

          (iii) any breach of any of the material terms of this Agreement by the
     Company which is not cured within 15 days following  written notice thereof
     by Executive to the Company;

provided,  however,  that the term "Constructive  Discharge" shall not include a
specific  event  described  in the  preceding  clause (i),  (ii) or (iii) unless
Executive  actually  terminates his  employment  with the Company within 60 days
after the occurrence of such event.

     (d) The amount of  compensation  payable  pursuant to this Section 8 is not
subject to any deduction (except for withholding  taxes),  reduction,  offset or
counterclaim, and the Company may not give advance notice of termination in lieu
of the payment provided for in this Section 8.

     (e) For purposes of this Agreement,  "Disability"  shall mean an illness or
accident which prevents  Executive,  for a continuous period lasting six months,
from  performing the material job duties  normally  associated  with the Officer
Position.  In the event that any  disagreement  or dispute  arises  between  the
Company and Executive as to whether Executive has incurred a "Disability", then,
in  any  such  event,  Executive  shall  submit  to  a  physical  and/or  mental
examination  by a competent and qualified  physician  licensed under the laws of
the State of Executive's residence who shall be mutually selected by the Company
and  Executive,  and such  physician  shall  make the  determination  of whether
Executive suffers from any  "Disability".  In the absence of fraud or bad faith,
the  determination  of such physician as to  Executive's  condition at such time
shall be final and binding upon both the Company and Executive.  The entire cost
of any such examination shall be borne solely by the Company.

     (f) Notwithstanding any provision of this Agreement to the contrary, if any
amount or  benefit  to be paid or  provided  under  this  Agreement  would be an
"Excess Parachute  Payment",  within the meaning of Section 280G of the Internal
Revenue  Code of 1986,  as amended  (the  "Code"),  or any  successor  provision
thereto,  but for the  application  of this  sentence,  then  the  payments  and
benefits to be paid or  provided  under this  Agreement  shall be reduced to the
minimum extent  necessary (but in no event to less than zero) so that no portion
of any such payment or benefit,  as so reduced,  constitutes an Excess Parachute
Payment;  provided,  however, that the foregoing reduction shall be made only if
and to the  extent  that  such  reduction  would  result in an  increase  in the
aggregate payment and benefits to be provided,  determined on an after-tax basis
(taking  into  account  the excise tax imposed  pursuant to Section  4999 of the
Code,  or any successor  provision  thereto,  any tax imposed by any  comparable
provision  of state law,  and any  applicable  federal,  state and local  income
taxes).  The determination of whether any reduction in such payments or benefits
to be provided  under this  Agreement or  otherwise is required  pursuant to the
preceding sentence shall be made at the expense of the Company,  if
<PAGE>

requested by Executive or the Company, by the Company's independent accountants.
The fact that Executive's right to payments or benefits may be reduced by reason
of the  limitations  contained in this Section 8(f) shall not of itself limit or
otherwise  affect any other  rights of  Executive  other than  pursuant  to this
Agreement.  In the event that any  payment or benefit  intended  to be  provided
under this  Agreement or  otherwise  is required to be reduced  pursuant to this
Section  8(f),  Executive  shall be entitled to designate  the  payments  and/or
benefits  to be so reduced in order to give  effect to this  Section  8(f).  The
Company shall provide  Executive with all  information  reasonably  requested by
Executive  to permit  Executive  to make  such  designation.  In the event  that
Executive fails to make such  designation  within 10 business days following the
date Executive ceases to be employed by the Company, the Company may effect such
reduction in any manner it deems appropriate.

     9. Termination Obligations.
        -----------------------

     (a) Executive hereby acknowledges and agrees that all personal property and
equipment,   including,  without  limitation,  all  computers,  books,  manuals,
records, reports, notes, contracts,  lists, blueprints,  and other documents, or
materials,   or  copies  thereof  (including  computer  files),  and  all  other
proprietary information relating to the business of the Company, furnished to or
prepared by  Executive in the course of or incident to  Executive's  employment,
belongs to the Company and shall be promptly returned to the Company within five
business days after Executive's last work day.  Following  Executive's last work
day, Executive will not retain any written or other tangible material containing
any proprietary information of the Company.

     (b) Effective as of Executive's last work day, Executive shall be deemed to
have resigned from all offices and  directorships  then held with the Company or
any  subsidiaries  or  affiliates  of the Company.  Executive  shall provide the
Company with signed letters of resignation from all such positions.

     (c)  Notwithstanding  anything  herein to the  contrary,  the covenants and
agreements  of Executive  contained in Sections 9, 10, 11, 12, 15, 16, 20 and 21
shall  survive  termination  of  Executive's  employment  by the Company and the
termination of this Agreement, whether or not for "Cause".

     (d) In exchange  for the Company  entering  into this  Agreement,  and as a
condition  precedent to payment of any amounts owed to Executive under Section 8
hereof,  Executive  agrees  that,  at the  time of  Executive's  resignation  or
termination  from the  Company,  Executive  will  execute a  release  reasonably
acceptable to the Company of all  liability of the Company and its  subsidiaries
and  their  officers,  shareholders,  employees,  directors  and  affiliates  to
Executive in  connection  with or arising out of  Executive's  employment by the
Company,  except with respect to (i) any then-vested  rights under the Company's
stock  warrant or stock  option  plans,  (ii) any  then-vested  rights under the
Company's  employee  benefit  plans  (including  Executive's  right,  if any, to
continued  coverage under the Company's medical plan under COBRA and for payment
at  termination of any accrued but unused  vacation time in accordance  with the
Company's usual policies),  (iii) rights of indemnification  under the Company's
Bylaws and directors' and officers' liability coverages,  (iv) any amounts which
may be payable to Executive  pursuant to Section 8
<PAGE>

and (v) any claims  Executive may have pursuant to the Company's  disability and
workmen's compensation insurance programs.

     10.  Covenant  Not to Compete.  Unless the Chief  Executive  Officer of the
          ------------------------
Company  determines  that any of the following  conduct is in the Company's best
interests,  during the Term of this  Agreement and for the  Non-Compete  Period,
Executive shall not:

     (a) directly or  indirectly  for himself or for any other person or entity,
engage, whether as owner, investor, creditor, consultant,  partner, shareholder,
director,  financial  backer,  agent,  employee or  otherwise,  in the business,
enterprise  or  employment  of  owning,   operating,   marketing  or  selling  a
time-share,  fractional  ownership,  exchange company,  vacation plan,  vacation
ownership or interval ownership project within the Territory; or

     (b) directly or  indirectly  for himself or for any other person or entity,
sell, or otherwise procure purchasers for, any time-share, fractional ownership,
exchange  company,  vacation  plan,  vacation  ownership  or interval  ownership
project within the Territory; or

     (c) have any business (as owner, investor, creditor,  consultant,  partner,
debtor or  otherwise)  or be employed in any capacity by a person or entity that
is engaged,  directly or  indirectly,  in (i)  operating,  or  providing  sales,
marketing  or  development  services  to, a  time-share,  fractional  ownership,
exchange  company,  vacation  plan,  vacation  ownership  or interval  ownership
project within the Territory,  or (ii) in an activity formed or entered into for
the primary purpose of engaging in a time-share,  fractional ownership, exchange
company, vacation plan, vacation ownership or interval ownership business within
the Territory; or

     (d)  directly or  indirectly  for himself or for any other person or entity
become employed in any capacity by or otherwise  render services in any capacity
to any national  enterprise having time-share,  fractional  ownership,  exchange
company,  vacation plan,  vacation ownership or interval  ownership  activities,
including,   without  limitation,   The  Walt  Disney  Company,   Hilton  Hotels
Corporation,  Hyatt Corporation, Four Seasons Hotels and Resorts, Inc., Marriott
International,  Inc., Inter-Continental Hotels and Resorts, Inc., Promus Hotels,
Inc., Sunterra  Corporation or Starwood Hotels & Resorts Worldwide,  Inc. or any
of their respective subsidiaries or affiliates; or

     (e) directly or indirectly, for himself, or for any other person or entity,
pursue or consummate or otherwise interfere with any Existing Project; or

     (f) directly or indirectly, for himself, or for any other person or entity,
pursue or consummate or otherwise interfere with any Prospective Project; or

     (g) directly or indirectly, for himself, or for any other person or entity,
become employed in any capacity by or otherwise  render services in any capacity
to any other person or entity (other than the Company and its  subsidiaries  and
affiliates) described in clause (b) of the definition of Prospective Project.
<PAGE>

     Notwithstanding   the   foregoing,   Executive  may  purchase  stock  as  a
stockholder in any publicly traded company, including any company engaged in the
timeshare,  fractional  ownership,  exchange  or  vacation  ownership  business;
provided, however, that Executive may not own (individually or collectively with
Executive's family members, trusts for the benefit of Executive's family members
and  affiliates  of  Executive)  more  than 5% of any  company  (other  than the
Company).

     "Existing  Project"  means a  time-share,  fractional  ownership,  exchange
company,  vacation  plan,  vacation  ownership or interval  ownership  resort or
project  which  the  Company  or any of its  subsidiaries  or  affiliates  owns,
operates,  is under contract to provide property management services, is part of
the Company's  FairShare  Plus  reservation  system or has commenced to develop,
acquire or otherwise  undertake as of the date  Executive's  employment with the
Company terminates.

     "Non-Compete   Period"  shall  mean  the  period  commencing  on  the  date
Executive's  employment  with the  Company  terminates  during  the Term  hereof
(regardless of the reason for such termination of employment) and continuing for
a period of six (6) months thereafter (which may extend beyond the expiration of
the Term).

     "Prospective  Project"  means  (a)  a  prospective  time-share,  fractional
ownership,  exchange  company,  vacation  plan,  vacation  ownership or interval
ownership  resort or project with respect to which Executive has been made aware
or has been advised prior to the  termination of his employment with the Company
that  the  Company  or any of its  subsidiaries  or  affiliates  is  considering
developing or undertaking and (b) any person or entity, including its respective
affiliates,  with  respect  to which  Executive  has been made aware or has been
advised  prior to the  termination  of his  employment  by the Company  that the
Company or any of its  subsidiaries  or affiliates  has commenced to evaluate or
negotiate with in respect of any  transaction  involving (i) the  acquisition by
the Company or any of its subsidiaries or affiliates of all or a portion of such
person or  entity or its  consolidated  assets or (ii) the  acquisition  by such
person or entity (or its  affiliates)  of all or a portion of the Company or its
consolidated assets.

     "Territory"  means the total  geographic  area  located  within a  150-mile
radius of each Existing Project and each Prospective Project.

     In light of the substantial  remuneration  provided to Executive  hereunder
and  Executive's   management  position  with  the  Company,   Executive  hereby
specifically  acknowledges  and agrees that the  provisions  of this  Section 10
(including,  without limitation, its time and geographic limits), as well as the
provisions of Sections 9, 11 and 12, are  reasonable and  appropriate,  and that
Executive will not claim to the contrary in any action brought by the Company to
enforce any of such provisions.

     11. Covenant Against  Solicitation of Employees and Contractors.  Executive
         -----------------------------------------------------------
shall not,  directly or  indirectly  or on behalf of any  person,  organization,
business  or  enterprise  with  which  Executive  may become  associated  in any
capacity (whether as an employee, officer, director, consultant,  investor (debt
or equity) or otherwise),  during the Term of this Agreement and for a period of
time  equal to two (2)  years  extending  from the date  Executive  ceases to be
<PAGE>

employed by the Company (regardless of the reason for such change in Executive's
employment  status),  (a)  solicit or cause or suggest  there be  solicited  for
employment  or  as  an  independent  contractor,  consultant  or  other  service
provider, or hire, any people then serving, or serving within the 180 days prior
thereto, as employees of the Company or any of its subsidiaries or affiliates or
(b) contact or solicit or attempt to  establish a commercial  relationship  with
any of the Company's or its  subsidiaries' or affiliates'  outside  providers of
information systems, marketing services, OPC locations or sales prospects.

     12. Remedies For Breach. It is understood and agreed by the parties that no
         -------------------
amount of money would  adequately  compensate  the Company for damages which the
parties acknowledge would be suffered as a result of a violation by Executive of
the  covenants  contained  in  Sections  9,  10,  11 and 15  hereof,  and  that,
therefore,  the  Company  shall  be  entitled,  upon  application  to a court of
competent  jurisdiction,  to obtain  injunctive relief (without the need to post
bond or prove  irreparable  injury or  inadequate  remedy at law) to enforce the
provisions  of Sections 9, 10, 11 or 15,  which  injunctive  relief  shall be in
addition  to  any  other  rights  or  remedies  available  to the  Company.  The
provisions of this Section 12 shall survive the termination of this Agreement.

     13. Other Benefits; Life Insurance.
         ------------------------------

     (a) Except as expressly provided herein, this Agreement shall not:

          (i) be deemed to limit or affect  the right of  Executive  to  receive
     other forms of additional  compensation or to participate in any insurance,
     retirement, disability, profit-sharing, stock purchase, stock option, stock
     appreciation rights, cash or stock bonus or other plan or arrangement or in
     any other  benefits now or hereafter  provided by the Company or any of the
     Company's subsidiary or affiliated companies for its employees; or

          (ii) be deemed to be a waiver by Executive of any vested  rights which
     Executive may have or may hereafter acquire under any employee benefit plan
     or  arrangement  of the  Company  or any of  the  Company's  subsidiary  or
     affiliated companies.

     (b) It is contemplated  that, in connection with his employment  hereunder,
Executive may be required to incur reasonable business, entertainment and travel
expenses.  The Company agrees to reimburse  Executive in full for all reasonable
and necessary  business,  entertainment  and other related  expenses,  including
travel expenses,  incurred or expended by him incident to the performance of his
duties  hereunder,  upon submission by Executive to the Company of such vouchers
or  expense  statements  satisfactorily  evidencing  such  expenses  as  may  be
reasonably requested by the Company.

     (c) It is  understood  and agreed by the  Company  that  during the term of
Executive's employment hereunder,  he shall be entitled to annual paid vacations
(taken  consecutively  or in segments),  the length of which shall be consistent
with the effective  discharge of Executive's  duties and the general customs and
practices  of the Company  applicable  to its  management  personnel;  provided,
however,  that  Executive  shall be deemed to have fully  accrued and vested
<PAGE>

the minimum  annual  right to four weeks of  vacation  time upon the date of his
employment by the Company.

     (d) The Company shall, at its sole expense (up to an initial maximum annual
premium of  $5,000),  obtain  and  maintain  in full force and effect  term life
insurance  on  Executive's  life in an amount  equal to twice  Executive's  Base
Salary, payable to a beneficiary of Executive's choice.

     14. No Mitigation Obligation.  The Company hereby acknowledges that it will
         ------------------------
be  difficult  and may be  impossible  (a)  for  Executive  to  find  reasonably
comparable  employment  following the date of termination and (b) to measure the
amount of  damages  which  Executive  may suffer as a result of  termination  of
employment hereunder.  Accordingly,  the payment of the termination compensation
by the Company to Executive in  accordance  with the terms of this  Agreement is
hereby  acknowledged  by the  Company to be  reasonable  and will be  liquidated
damages,  and  Executive  will not be  required  to  mitigate  the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
nor  will any  profits,  income,  earnings  or other  benefits  from any  source
whatsoever create any mitigation,  offset,  reduction or any other obligation on
the part of Executive hereunder or otherwise.

     15. Confidentiality.
         ---------------

     (a)  Recognizing  that the  knowledge  and  information  about the business
methods,  systems,  plans and  policies  of the  Company  and of its  affiliated
companies which Executive has heretofore and shall hereafter receive,  obtain or
establish as an employee of the Company or its affiliated companies are valuable
and unique assets of the Company and its affiliated companies,  Executive agrees
that he shall not  (otherwise  than  pursuant to his duties  while an  employee)
disclose or use (whether for himself or, directly or indirectly, for any person,
organization,  business or enterprise with which Executive may become associated
in any capacity (whether as an employee, officer, director, consultant, investor
(debt or equity) or  otherwise)),  without the express prior written  consent of
the Chief  Executive  Officer of the Company,  any knowledge or information  not
readily  available  to the  general  public  pertaining  to the  Company  or its
affiliated  companies  (including  specifically any information  relating to the
Company's  points  based  product  or  reservation  system,  lists of current or
prospective clients,  marketing and other service providers,  business plans and
proposals,  current or prospective  business  opportunities,  financial records,
research and  development  and  marketing  strategies  and  programs  (including
present  and  prospective  OPC  locations  and the terms of  leases  of  similar
arrangements)),  or any of their business, personnel or plans, for any reason or
purpose  whatsoever,  unless  required  by law or legal  process.  In the  event
Executive is required by law or legal  process to provide  documents or disclose
information,  he shall take all reasonable steps to maintain the confidentiality
of such documents and  information,  including  notifying the Company as soon as
reasonably  practical in advance of such disclosure and giving it an opportunity
to seek a protective order, at its sole cost and expense.

     (b) The  provisions  of this  Section 15 shall  survive the  expiration  or
termination  of this  Agreement,  without regard to the reason  therefor,  for a
period of two  years  from the  earlier  of (i)  expiration  of the Term or (ii)
termination of Executive's employment with the Company.


<PAGE>


     16.  Legal Fees and  Expenses.  In the event a dispute  arises  between the
          ------------------------
parties hereto and suit is instituted,  the prevailing  party in such litigation
shall be  entitled  to recover  reasonable  attorneys'  fees and other costs and
expenses from the non-prevailing  party,  whether incurred at the trial level or
in any appellate proceeding. For purposes hereof, the Company shall be deemed to
have  prevailed in any suit involving a breach or alleged breach by Executive of
any of the  covenants  contained  in  Sections 9, 10 and 11 above if the Company
prevails to any degree in such suit (even if such  covenant or covenants are not
enforced to the fullest extent sought by the Company).

     17. Withholding of Taxes. The Company may withhold from any amounts payable
         --------------------
under this Agreement all federal,  state,  city or other taxes as the Company is
required to withhold pursuant to any law or government regulation or ruling.

     18. Successors and Binding Agreement.
         --------------------------------

     (a) The Company will require any successor (whether direct or indirect,  by
purchase,  merger,  consolidation,   reorganization  or  otherwise)  to  all  or
substantially all of the business or assets of the Company, by agreement in form
and substance  reasonably  satisfactory  to  Executive,  expressly to assume and
agree to perform  this  Agreement  in the same manner and to the same extent the
Company would be required to perform if no such succession had taken place. This
Agreement  will be binding  upon and inure to the benefit of the Company and any
successor to the Company,  including,  without limitation, any persons acquiring
directly or indirectly all or substantially all of the business or assets of the
Company whether by purchase, merger, consolidation,  reorganization or otherwise
(and such successor shall thereafter be deemed the "Company" for the purposes of
this Agreement), but will not otherwise be assignable, transferable or delegable
by the Company.

     (b) This  Agreement  will  inure to the  benefit of and be  enforceable  by
Executive's  personal  or  legal  representatives,   executors,  administrators,
successors, heirs, distributees and legatees.

     (c) This  Agreement is personal in nature and neither of the parties hereto
shall,  without the  consent of the other,  assign,  transfer  or delegate  this
Agreement  or  any  rights  or  obligations  hereunder.   Without  limiting  the
generality or effect of the  foregoing,  Executive's  right to receive  payments
hereunder will not be assignable,  transferable or delegable, whether by pledge,
creation  of a security  interest  or  otherwise,  other  than by a transfer  by
Executive's will or by the laws of descent and distribution and, in the event of
any attempted assignment or transfer contrary to this Section 18(c), the Company
shall  have  no  liability  to pay  any  amount  so  attempted  to be  assigned,
transferred or delegated.

     19.  Notices.  For all  purposes  of this  Agreement,  all  communications,
          -------
including,  without  limitation,   notices,  consents,  requests  or  approvals,
required  or  permitted  to be given  hereunder  will be in writing  and will be
deemed to have been duly given when hand  delivered or  dispatched by electronic
facsimile transmission (with receipt thereof orally confirmed); or five business
days after having been mailed by United  States  registered  or certified  mail,
return receipt requested,  postage prepaid;  or three business days after having
been sent by a nationally
<PAGE>

recognized  overnight courier service such as Federal Express, UPS or Purolator,
addressed to the Company (to the attention of the President and Chief  Executive
Officer of the Company,  at 8669 Commodity Circle,  Suite 200, Orlando,  Florida
32708,  with a copy to the General  Counsel of the  Company,  at 8669  Commodity
Circle,  Suite 200, Orlando,  Florida 32819),  and to Executive at his principal
residence located at 10046 Crystalline, Orlando, Florida 32836, or to such other
address  as any  party  may  have  furnished  to the  other  in  writing  and in
accordance  herewith,  except  that  notices  of  changes  of  address  shall be
effective only upon receipt.

     20. Governing Law and Venue. The validity, interpretation, construction and
         -----------------------
performance  of this  Agreement  will be governed by and construed in accordance
with the substantive laws of the State of Florida,  without giving effect to the
principles  of  conflict  of laws of such  State.  In the  event of any legal or
equitable action arising under this Agreement, the venue of such action shall be
exclusively  within either the state courts of Florida located in Orange County,
Florida, or the United States District Court for the Middle District of Florida,
Orlando Division, and the parties waive any other jurisdiction and venue.

     21.  Validity and  Construction.  If any provision of this Agreement or the
          --------------------------
application  of any  provision  hereof to any  person or  circumstances  is held
invalid, unenforceable or otherwise illegal, the remainder of this Agreement and
the application of such provision to any other person or circumstances  will not
be affected, and the provision so held to be invalid, unenforceable or otherwise
illegal  will be reformed to the extent  (and only to the extent)  necessary  to
make it enforceable,  valid or legal; provided,  however, that the Company shall
have no obligation to pay the  termination  pay provided for in Section 8 hereof
(and Executive  shall refund the gross amount of such  termination pay which may
have been  previously  paid) in the event  that  either of the  covenant  not to
compete provided for in Section 10 hereof or the covenant  against  solicitation
of  employees  and  contractors  provided for in Section 11 hereof is held to be
unenforceable  or otherwise  given limited  effect,  in whole or in any material
part.

     The parties have  participated  jointly in the  negotiation and drafting of
this  Agreement.  In the  event of an  ambiguity  or a  question  of  intent  or
interpretation  arises,  this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring either party by virtue of the authorship of any of the provisions
of this Agreement.

     22. Miscellaneous.  No provision of this Agreement may be modified,  waived
         -------------
or  discharged  unless such  waiver,  modification  or discharge is agreed to in
writing signed by Executive and the Company. No waiver by either party hereto at
any  time of any  breach  by the  other  party  hereto  or  compliance  with any
condition  or  provision  of this  Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations,  oral
or  otherwise,  expressed or implied with respect to the subject  matter  hereof
have been  made by  either  party  which  are not set  forth  expressly  in this
Agreement. References to Sections are references to Sections of this Agreement.
<PAGE>

     23.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
           ------------
counterparts,  each of which shall be deemed to be an original  but all of which
together will constitute one and the same agreement.

     24. Warranty.  Executive  warrants and represents that he is not a party to
         --------
any agreement,  contract or  understanding,  whether of employment or otherwise,
which would in any way restrict or prohibit him from  undertaking  or performing
employment in accordance with the terms and conditions of this Agreement.

     25. Approval.  By executing this Agreement,  the Company  acknowledges that
         --------
this  Agreement  has been  approved by the Board of Directors of the Company and
that no other approvals are required as a condition precedent for this Agreement
to become effective.

     26. Prior  Agreement.  This Agreement  shall in all respects  supersede all
         ----------------
previous agreements  providing severance pay benefits,  whether written or oral,
between  Executive  and the Company,  including  any existing or future  adopted
Company  policies  or  procedures  with  respect  to  separation,  severance  or
termination pay.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

                                       FAIRFIELD COMMUNITIES INC.



                                       By: /s/ James G. Berk
                                           ----------------------------------
                                                    James G. Berk
                                                    President and
                                               Chief Executive Officer

                                           /s/ Matthew J. Durfee
                                           ----------------------------------
                                            Matthew J. Durfee, Individually

</TEXT>
</DOCUMENT>
