HOST MARRIOTT CORP/
HMC & HM LP 1997 INCENTIVE PLAN AMENDED 12/98
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>HMC & HM LP 1997 INCENTIVE PLAN AMENDED 12/98
<TEXT>

<PAGE>

                                                                    Exhibit 10.8

                            HOST MARRIOTT CORPORATION
                                       AND
                               HOST MARRIOTT, L.P.


                1997 COMPREHENSIVE STOCK AND CASH INCENTIVE PLAN

                    AS AMENDED AND RESTATED DECEMBER 29, 1998
<PAGE>

                                TABLE OF CONTENTS

PREAMBLE ................................................................  1

ARTICLE I
ESTABLISHMENT, PURPOSE AND DURATION .....................................  3
     1.1   Establishment of the Plan ....................................  3
     1.2   Purpose of the Plan ..........................................  3
     1.3   Duration of the Plan .........................................  3

ARTICLE II
DEFINITIONS AND CONSTRUCTION ............................................  4
     2.1   Definitions ..................................................  4
                  Allocation Agreement ..................................  4
                  Award .................................................  4
                  Award Agreement .......................................  4
                  Beneficial Owner ......................................  4
                  Beneficiary ...........................................  4
                  Board .................................................  4
                  Chief Executive Officer ...............................  4
                  Code ..................................................  4
                  Committee .............................................  4
                  Company ...............................................  4
                  Contribution Date .....................................  4
                  Covered Employee ......................................  4
                  Current Award .........................................  5
                  Deferred Award ........................................  5
                  Deferred Stock ........................................  5
                  Deferred Stock Bonus Award ............................  5
                  Deferred Stock Agreement ..............................  5
                  Director ..............................................  5
                  Disability ............................................  5
                  Distribution Agreement ................................  5
                  Effective Date ........................................  5
                  Employee ..............................................  5
                  Engaging in Competition ...............................  5
                  Exchange Act ..........................................  5
                  Fair Market Value .....................................  5
                  Host Marriott Corporation .............................  6
                  Incentive Stock Option ................................  6
                  Insider ...............................................  6
                  1998 Conversion Award .................................  6
                  Non-Employee Director .................................  6
                  Nonqualified Stock Option .............................  6
                  Operating Partnership .................................  6

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                  Option ................................................  6
                  Option Price ..........................................  6
                  Other Cash Performance-Based Awards ...................  6
                  Other Share-Based Award ...............................  6
                  Participant ...........................................  6
                  Performance-Based Exception ...........................  6
                  Period of Restriction .................................  6
                  Person ................................................  7
                  Plan ..................................................  7
                  Restricted Stock ......................................  7
                  Shares ................................................  7
                  Special Recognition Award .............................  7
                  Subsidiary ............................................  7
                  Year of Service .......................................  7


ARTICLE III
ADMINISTRATION ..........................................................  8
     3.1   The Committee ................................................  8
     3.2   Authority of the Committee ...................................  8
     3.3   Decisions Binding ............................................  8
     3.4   Unanimous Consent in Lieu of Meeting .........................  8

ARTICLE IV
SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS ...........................  9
     4.1   Number of Shares .............................................  9
     4.2   Lapsed Awards ................................................  9
     4.3   Adjustments in Authorized Shares .............................  9
     4.4   Limitation on Participation ..................................  9

ARTICLE V
ELIGIBILITY AND PARTICIPATION ........................................... 10
     5.1   Eligibility .................................................. 10
     5.2   Actual Participation by Employees ............................ 10

ARTICLE VI
STOCK OPTIONS ........................................................... 11
     6.1   Grant of Options ............................................. 11
     6.2   Award Agreement .............................................. 11
     6.3   Option Price ................................................. 11
     6.4   Duration of Options .......................................... 11
     6.5   Exercise of Options .......................................... 11
     6.6   Payment ...................................................... 11
     6.7   Restrictions on Share Transferability ........................ 12
     6.8   Termination of Employment or Leave of Absence ................ 12
     6.9   Nontransferability of Options ................................ 13

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     6.10  Rights as a Shareholder ...................................... 13

ARTICLE VII
RESTRICTED STOCK ........................................................ 14
     7.1   Grant of Restricted Stock .................................... 14
     7.2   Restricted Stock Agreement ................................... 14
     7.3   Transferability .............................................. 14
     7.4   Other Restrictions ........................................... 14
     7.5   Voting Rights ................................................ 14
     7.6   Dividends and Other Distributions ............................ 14
     7.7   Termination of Employment .................................... 15

ARTICLE VIII
DEFERRED STOCK .......................................................... 16
     8.1   Award of Deferred Stock ...................................... 16
     8.2   Deferred Stock Bonus Awards .................................. 16
     8.3   Deferred Stock Agreements .................................... 18
     8.4   Assignment ................................................... 19
     8.5   Lump Sum Payments ............................................ 19
     8.6   Rights as a Shareholder ...................................... 19

ARTICLE IX
SPECIAL RECOGNITION STOCK AWARDS ........................................ 20

ARTICLE X
OTHER AWARDS ............................................................ 21
     10.1   Grant of Other Share-Based Awards ........................... 21
     10.2   Terms of Other Share-Based Awards ........................... 21
     10.3   Other Share-Based Award Agreement ........................... 21
     10.4   Other Cash Performance-Based Awards ......................... 21

ARTICLE XI
PERFORMANCE MEASURES FOR AWARDS ......................................... 22
     11.1   Performance Measures ........................................ 22
     11.2   Adjustments ................................................. 22
     11.3   Committee Discretion ........................................ 23

ARTICLE XII
CONVERSION AWARDS ....................................................... 24

ARTICLE XIII
BENEFICIARY DESIGNATION ................................................. 25

ARTICLE XIV
DEFERRALS ............................................................... 26

                                     -iii-
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ARTICLE XV
RIGHTS OF PARTICIPANTS .................................................. 27
     15.1   Employment or Service ....................................... 27
     15.2   Participation ............................................... 27

ARTICLE XVI
AMENDMENT, MODIFICATION AND TERMINATION ................................. 28
     16.1   Amendment, Modification, and Termination .................... 28
     16.2   Adjustment of Awards Upon the Occurrence of Certain
                  Unusual or Nonrecurring Events ........................ 28
     16.3   Awards Previously Granted ................................... 29
     16.4   Compliance with Code Section 162(m) ......................... 29
     16.5   Substitution of Awards in Mergers and Acquisitions .......... 29

ARTICLE XVII
WITHHOLDING ............................................................. 30
     17.1   Tax Withholding ............................................. 30
     17.2   Share Withholding ........................................... 30

ARTICLE XVIII
INDEMNIFICATION ......................................................... 31

ARTICLE XIX
SUCCESSORS .............................................................. 32

ARTICLE XX
LEGAL CONSTRUCTION ...................................................... 33
     20.1   Gender and Number ........................................... 33
     20.2   Severability ................................................ 33
     20.3   Requirements of Law ......................................... 33
     20.4   Securities Law Compliance ................................... 33
     20.5   Governing Law ............................................... 33

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<PAGE>

                            HOST MARRIOTT CORPORATION
                             AND HOST MARRIOTT, L.P.
                1997 COMPREHENSIVE STOCK AND CASH INCENTIVE PLAN
               AS AMENDED AND RESTATED EFFECTIVE DECEMBER 29, 1998

                                    PREAMBLE
                                    --------

     WHEREAS, Host Marriott Corporation sponsors the Host Marriott Corporation
1997 Comprehensive Stock Incentive Plan (the "Plan"); and

     WHEREAS, Host Marriott Corporation intends to enter into certain
transactions pursuant to a plan to reorganize its business operations so that it
will qualify as a real estate investment trust as of January 1, 1999 ("Host REIT
Conversion"); and

     WHEREAS, as part of the Host REIT Conversion, (i) Host Marriott Corporation
will transfer its liabilities, including but not limited to liabilities relating
to employee benefits to Host Marriott, L.P., (ii) Host Marriott Corporation will
merge with and into HMC Merger Corporation (to be renamed Host Marriott
Corporation), and (iii) holders of Host Marriott Corporation common stock will
receive a dividend of outstanding common shares of Crestline Capital Corporation
("Crestline"); and

     WHEREAS, in connection with the Host REIT Conversion, Host Marriott
Corporation and Crestline have entered into a Distribution Agreement (the
"Distribution Agreement") and Host Marriott Corporation and Host Marriott, L.P.
have entered into a Contribution Agreement (the "Contribution Agreement"); and

     WHEREAS, pursuant to the Distribution Agreement, Host Marriott Corporation
and Crestline have agreed to enter into an agreement allocating responsibilities
with respect to employee compensation, benefits, labor, and certain other
employment matters pursuant to the terms and conditions set forth in the
Employee Benefits and Other Employment Matters Allocation Agreement (the
"Allocation Agreement"); and

     WHEREAS, pursuant to the Contribution Agreement, Host Marriott Corporation
and Host Marriott, L.P. have also agreed to enter into an agreement allocating
responsibilities with respect to employee compensation, benefits, labor, and
certain other employment matters pursuant to the terms and conditions set forth
in the Allocation Agreement; and


     WHEREAS, pursuant to the Allocation Agreement, (a) Host Marriott
Corporation will continue to reserve those shares already reserved under the
Plan, (b) all future awards under the Plan after the Host REIT Conversion will
be denominated in Host Marriott Corporation common stock, and (c) the effect of
the Distribution and the Host REIT Conversion on Existing HMC Stock Awards (as
such term is defined in the Allocation Agreement) made under the Plan prior to
the Distribution Date will be determined as provided in the Allocation
Agreement; and
<PAGE>

     NOW, THEREFORE, this Host Marriott Corporation and Host Marriott, L.P.
Comprehensive Stock and Cash Incentive Plan (the "Plan") amends and restates in
its entirety the Host Marriott Corporation 1997 Comprehensive Stock Incentive
Plan. Set forth herein are all of the terms of the three plans comprising the
Plan, one for the benefit of the employees of Host Marriott Corporation (the
"Host REIT Plan"), one for the benefit of the employees of Host Marriott, L.P.,
(the "Operating Partnership Plan"), and one for the benefit of the employees of
any Subsidiary of Host Marriott Corporation or Host Marriott, L.P. (the
"Subsidiary Companies Plan"). The Committee shall administer all three plans.


                                      -2-
<PAGE>

                                   ARTICLE I
                       ESTABLISHMENT, PURPOSE AND DURATION

     1.1 Establishment of the Plan . Host Marriott Corporation, a Maryland
corporation ("Host Marriott Corporation") and Host Marriott, L.P., a Delaware
Limited Partnership ("Operating Partnership") (collectively referred to herein
as the "Company"), hereby amend and restate the 1997 Comprehensive Stock
Incentive Plan to be known as the "Host Marriott Corporation and Host Marriott,
L.P. 1999 Comprehensive Stock and Cash Incentive Plan" (hereinafter referred to
as the "Plan"), as set forth in this document, effective as of the Contribution
Date (as such term is defined in the Allocation Agreement), comprising the Host
REIT Plan, the Operating Partnership Plan and the Subsidiary Companies Plan. The
Plan shall also include the Host Marriott Corporation 1993 Comprehensive Stock
Incentive Plan. The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Restricted Stock, Bonus Awards, Deferred Stock
Agreements, Stock Appreciation Rights, Special Recognition Awards and other
stock-based Awards.

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

     The Plan is further intended to provide flexibility to Host Marriott
Corporation, the Operating Partnership and the Subsidiaries in their ability to
motivate, attract and retain the services of key employees who have been or will
be given management responsibilities.

     1.3 Duration of the Plan. This amendment and restatement of the Plan shall
become effective on the Contribution Date, and shall remain in effect, subject
to the right of the Board of Directors of the Host Marriott Corporation to
terminate the Plan at any time pursuant to Article XVI hereof, until all Shares
subject to it shall have been purchased or acquired according to the Plan's
provisions.


                                      -3-
<PAGE>

                                   ARTICLE II
                          DEFINITIONS AND CONSTRUCTION

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

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

     "Award " means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, Restricted Stock, Deferred
Stock, Special Recognition Stock Awards, 1998 Conversion Awards, Other
Share-Based Awards, Other Cash Performance-Based Awards.

     "Award Agreement" means an agreement entered into by the Company and each
Participant setting forth the terms and provisions applicable to Awards granted
under this Plan.

     "Beneficial Owner " or "Beneficial Ownership" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.

     "Beneficiary" means the person or persons designated pursuant to Article
XIII hereof.

     "Board " or "Board of Directors" means the Board of Directors of Host
Marriott Corporation.

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

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

     "Committee " means the Compensation Policy Committee of the Board, as
specified in Article III herein, or such other Committee appointed by the Board
to administer the Plan with respect to grants of Awards.

     "Company" means Host Marriott Corporation, as to the Host REIT Plan, the
Operating Company as to the Operating Partnership Plan, and any Subsidiary of
Host Marriott Corporation or the Operating Partnership as to the Subsidiary
Companies Plan.

     "Contribution Date" means the Contribution Date as defined in the
Allocation Agreement.

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


                                      -4-
<PAGE>

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

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

     "Deferred Stock " means an Award granted to a Participant as described in
Article VIII herein.

     "Deferred Stock Bonus Award " means a grant of a right to receive Shares on
a deferred basis, pursuant to Section 8.2 hereof.

     "Deferred Stock Agreement" means an Award granted to a Participant as
described in Section 8.3 herein.

     "Director " means any member of the Board.

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

     "Distribution Agreement" means the Distribution Agreement as defined in the
Allocation Agreement.

     "Effective Date " has the meaning set forth in Section 1.3 hereof.

     "Employee " means any individual who is, or will become, a full-time,
active non-union employee of the Company.

     "Engaging in Competition" means (i) engaging, individually or as an
employee, consultant or owner (more than 5%) of any entity, in any business
engaged in significant competition with any business operated by the Company,
(ii) soliciting and hiring a key employee of the Company in another business,
whether or not in significant competition with any business operated by the
Company; or (iii) using or disclosing confidential Company information, in each
case, without the approval of the Company.

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

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


                                      -5-
<PAGE>

     "Host Marriott Corporation" means Host Marriott Corporation, a Delaware
corporation for the period before the Contribution Date, and Host Marriott
Corporation, a Maryland corporation, for the period beginning on and after the
Contribution Date.

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

     "Insider" shall mean an individual who is, on the relevant date, an
officer, Director or more than ten percent (10%) beneficial owner of any class
of the Company's equity securities that is registered pursuant to Section 12 of
the Exchange Act, all as defined under Section 16 of the Exchange Act.

     "1998 Conversion Award" means an Award pursuant to Article XII to reflect
the effect of the Distribution on outstanding awards which were held by the
grantee immediately before the Distribution.

     "Non-Employee Director" means a Director who is not an Employee of the
Company.

     "Nonqualified Stock Option " or "NQSO" means an Award of an option to
purchase Shares, granted under Article VI herein and which is not intended to
meet the requirements of Code Section 422.

     "Operating Partnership" means Host Marriott, L.P., a Delaware limited
partnership.

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

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

     "Other Cash Performance-Based Awards" means an Other Cash Performance-Based
Award as described in Article X herein.

     "Other Share-Based Award" means an Other Share-Based Award as described in
Article X herein.

     "Participant " means an Employee or former Employee of Host Marriott
Corporation, the Operating Partnership or any Subsidiary to whom an Award
granted under the Plan is outstanding, or any other individual to whom a 1998
Conversion Award granted under the Plan is outstanding.

     "Performance-Based Exception means the performance-based exception from the
tax deductibility limitations of Code Section 162(m).

     "Period of Restriction " means the period during which the transfer of
Shares of Restricted Stock is limited (based on the passage of time, the
achievement of performance objectives, or upon the


                                      -6-
<PAGE>

occurrence of other events as determined by the Committee, in its discretion,
and the Shares are subject to a substantial risk of forfeiture, as provided in
Article VII hereof.

     "Person " has the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a "group"
as defined in Section 13(d) thereof.

     "Plan " has the meaning set forth in Section 1.1 hereof.

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

     "Shares " means shares of Host Marriott Corporation, par value $1.00 per
share, for the period before the Contribution Date, and shares of Host Marriott
Corporation, par value $0.01 per share, for the period beginning on or after the
Contribution Date.

     "Special Recognition Stock Award " means an award granted to a Participant
pursuant to Article IX hereof.

     "Subsidiary " means any corporation, partnership, joint venture or other
entity other than the Operating Partnership in which the Company owns a majority
of the equity interest by vote or by value or in which the Company has a
majority capital or profits interest.

     "Year of Service" means a period of twelve (12) consecutive calendar months
during which an Employee was paid for 1200 or more hours of work for the
Company.


                                      -7-
<PAGE>

                            ARTICLE IIIADMINISTRATION

     3.1 The Committee . The Plan shall be administered by the Compensation
Policy Committee of the Board, or by any other Committee appointed by the Board,
the members of which shall be "Non-Employee Directors" within the meaning of
Rule 16b-3 under the Exchange Act, or any successor provision. The members of
the Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board.

     3.2 Authority of the Committee . Except as limited by law or by the
Articles of Incorporation or Bylaws of Host Marriott Corporation, and subject to
the provisions herein, the Committee shall have full power to select Employees
who shall participate in the Plan, determine the sizes and types of Awards,
determine the terms and conditions of Awards in a manner consistent with the
Plan, construe the interpret the Plan and any agreement or instrument entered
into under the Plan, establish, amend, or waive rules and regulations for the
Plan's administration, and (subject to the provisions of Article XVI herein)
amend the terms and conditions of any outstanding Award to the extent such terms
and conditions are within the discretion of the Committee as provided in the
Plan, except that Deferred Stock Bonus Awards authorized by Article VIII hereof
shall be granted and administered by the Chief Executive Officer in the case of
any recipients who are not Officers or Covered Employees. Further, the Committee
shall make all other determinations which may be necessary or advisable for the
administration of the Plan. The Committee's determinations under the Plan
(including without limitation, determinations of the persons to receive Awards,
the form, amount and timing of such Awards, the terms and provisions of such
Awards and the Award Agreements evidencing such Awards) need not be uniform and
may be made by the Committee selectively among persons who receive, or are
eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated. As permitted by law, the Committee may delegate its
authority under the Plan to a Director or Employee.

     3.3 Decisions Binding . All determinations and decisions made by the
Committee or its designee pursuant to the provisions of the Plan and all related
orders or resolutions of the Board shall be final, conclusive and binding on all
parties.

     3.4 Unanimous Consent in Lieu of Meeting . Except as otherwise required by
law, a memorandum signed by all members of the Committee members shall
constitute the act of the Committee without the necessity in such event to hold
a meeting.

                                      -8-
<PAGE>

             ARTICLE IV SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

     4.1 Number of Shares. Subject to Sections 4.2 and 4.3 herein, (a) in the
aggregate, no more than 44,442,911 shares of the Common Stock of the Host
Marriott Corporation may be issued pursuant to Awards granted under the Plan,
and (b) the maximum aggregate number of Shares that may be subject to any Awards
(other than 1998 Conversion Awards) granted in any one fiscal year to any single
Employee shall be two million (2,000,000). No more than 30% of the Shares
available for Awards will be issued with respect to Awards other than Options.

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

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

     4.4 Limitation on Participation. Notwithstanding any other provision to the
contrary, effective as of the Contribution Date, an Employee shall not be
eligible to participate in the Plan and shall cease to be a Participant, to the
extent such Employee was a Participant immediately before the application of
this Section 4.4 to such Employee, if the participation of such Employee would
violate the ownership limits set forth in Article VIII of Host Marriott
Corporation's Articles of Amendment and Restatement of Articles of
Incorporation.


                                      -9-
<PAGE>

                     ARTICLE V ELIGIBILITY AND PARTICIPATION

     5.1 Eligibility . Employees shall be eligible to participate in this Plan
with respect to Awards specified in Articles VI through X. Persons eligible to
receive 1998 Conversion Awards under the Allocation Agreement shall be eligible
to participate in the Plan with respect to Awards specified in Article XII and
shall be considered a Participant to the extent such Awards are outstanding.

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


                                     -10-
<PAGE>

                                   ARTICLE VI
                                 STOCK OPTIONS

     6.1 Grant of Options . Subject to the terms and provisions of the Plan,
Options may be granted to Employees in such number, and upon such terms, and at
any time and from time to time as shall be determined by the Committee. Options
may include provisions for reload of Options exercised by the tender of Shares
or the withholding of Shares with respect to the exercise of the Options.

     6.2 Award Agreement. . Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement shall also specify whether the
Option is intended to be an ISO within the meaning of Code Section 422 or an
NQSO whose grant is intended not to fall under the provisions of Code Section
422.

     6.3 Option Price. The Option Price for each grant of an Option (other than
an Option covered by a 1998 Conversion Award) under this Article VI shall be at
least equal to one hundred percent (100%) of the Fair Market Value of a Share on
the date the Option is granted.

     6.4 Duration of Options. Each Option granted under this Article VI shall
expire at such time as the Committee shall determine at the time of grant;
provided, however, that no Option shall be exercisable later than the fifteenth
(15Th) anniversary date of its grant.

     6.5 Exercise of Options. Options granted under this Article VI shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Employee.

     The ability of an Employee to exercise an Option is conditioned upon the
Employee not committing any criminal offense or malicious tort relating to or
against the Company.

     6.6 Payment. Options granted under this Article VI shall be exercised by
the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.

     The Option Price upon exercise of any Option shall be payable to the
Company in full either (a) in cash or its equivalent, or (b) if permitted in the
governing Award Agreement, by tendering previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the total Option
Price (provided that the Shares which are tendered must have been held by the
Participant for at least six (6) months prior to their tender to satisfy the
Option Price), or (c) if permitted in the governing Award Agreement, by a
combination of (a) and (b).

     The Committee also may allow cashless exercise as permitted under the
Federal Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law.

                                     -11-
<PAGE>

     6.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article VI as it may deem advisable, including, without
limitation, restrictions under applicable Federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed or traded, and under any blue sky or state securities laws applicable to
such Shares.

     6.8 Termination of Employment or Leave of Absence. In the event that an
Employee, during the Employee's lifetime has been on leave of absence for a
period of greater than twelve (12) months (except a leave of absence approved by
the Board or the Committee, as the case may be), or ceases to be an Employee of
the Company or of any Subsidiary for any reason, including retirement, the
portion of any Option which is not exercisable on the date on which the Employee
ceased to be an Employee or has been on leave for over twelve (12) months
(except a leave of absence approved by the Board or the Committee, as the case
may be) shall expire on such date and any unexercised portion thereof which was
otherwise exercisable on such date shall expire unless exercised within a period
of three (3) months (one year in the case of a Participant who is Disabled) from
such date, but in no event after the expiration of the term for which the Option
was granted; provided, however, that in the case of an optionee of an NQSO who
is an "Approved Retiree" (as herein defined), said optionee may exercise such
Option until the sooner to occur of (i) the expiration of such Option in
accordance with its original term, or (ii) the expiration of five years from the
date of retirement. For purposes of the proviso to the preceding sentence:

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

     (b)  Any time period during which an optionee may continue to exercise an
          Option within clause (ii) of said proviso shall count in determining
          compliance with any schedule established pursuant to Section 6.5
          herein; and

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

     In the event of the death of an optionee during the three-month period
described above for exercise of an Option by a terminated optionee or one on
leave for over twelve (12) months (except a leave of absence approved by the
Board or the Committee, as the case may be), the Option shall be exercisable by
the optionee's personal representatives, heirs or legatees to the same extent
and

                                     -12-
<PAGE>

during the same period that the optionee could have exercised the Option if the
optionee had not died.

     Notwithstanding anything in Section 6.5 to the contrary, in the event of
the death of an optionee while an Employee or Approved Retiree of the Company or
any Subsidiary, an outstanding Option held by such optionee upon death shall
become fully vested upon death and shall be exercisable by the optionee's
personal representatives, heirs or legatees at any time prior to the expiration
of one (1) years from the date of death of the optionee, but in no event after
the expiration of the term for which the Option was granted.

     6.9 Nontransferability of Options

         (a)  Incentive Stock Options. No ISO granted under the Plan may be
              sold, transferred, pledged, assigned, or otherwise alienated or
              hypothecated, other than by will or by the laws of descent and
              distribution. Further, all ISOs granted to a Participant under the
              Plan shall be exercisable during his or her lifetime only by such
              Participant.

         (b)  Nonqualified Stock Options. Except as otherwise provided in a
              Participant's Award Agreement, no NQSO granted under this Article
              VI may be sold, transferred, pledged, assigned, or otherwise
              alienated or hypothecated, other than by will or by the laws of
              descent and distribution. Further, except as otherwise provided in
              a Participant's Award Agreement, all NQSO's granted to a
              Participant under this Article VI shall be exercisable during his
              or her lifetime only by such Participant.

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


                                     -13-
<PAGE>

                                   ARTICLE VII
                                RESTRICTED STOCK

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

     7.2 Restricted Stock Agreement . Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the Period(s)
of Restriction, the number of Shares of Restricted Stock granted, and such other
provisions as the Committee shall determine.

     7.3 Transferability. Except as provided in this Article VII, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Restricted Stock
Award Agreement, or upon earlier satisfaction of any other conditions, as
specified by the Committee in its sole discretion and set forth in the
Restricted Stock Award Agreement. All rights with respect to the Restricted
Stock granted to a Participant under the Plan shall be available during his or
her lifetime only to such Participant.

     7.4 Other Restrictions. The Committee shall impose such conditions and/or
restrictions on any Shares of Restricted Stock granted pursuant to the Plan as
it may deem advisable, including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of Restricted Stock,
restrictions based upon the achievement of specific performance objectives
(Company-wide, business unit, and/or individual), continued employment with the
Company over a prescribed period of time, time-based restrictions on vesting
following the attainment of the performance objectives, and/or restrictions
under applicable Federal or state securities laws.

     The Company shall retain the certificates representing Shares of Restricted
Stock in the Company's possession until such time as all conditions and/or
restrictions applicable to such Shares have been satisfied.

     Except as otherwise provided in this Article VII, Shares of Restricted
Stock covered by each Restricted Stock grant made under the Plan shall become
freely transferable by the Participant after the last day of the applicable
Period of Restriction.

     Distribution of Shares of Restricted Stock is conditioned upon the
Participant not committing any criminal offense or malicious tort relating to or
against the Company.

     7.5 Voting Rights . During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.

     7.6 Dividends and Other Distributions . If determined by the Committee in
its absolute discretion, during the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may be credited with regular cash
dividends paid with respect to the underlying Shares while they are so held.
Such dividends may be paid currently, accrued as contingent cash

                                     -14-
<PAGE>

obligations, or converted into additional shares of Restricted Stock, upon such
terms as the Committee establishes.

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

     7.7 Termination of Employment . In the event a Participant's employment
with the Company is terminated because of the Participant's Disability or death
during the Period of Restriction, the Period of Restriction shall end and the
Participant's rights thereunder shall inure to the benefit or his or her
Beneficiary.

     In the event that the Participant's employment with the Company is
terminated for any reason other than death or Disability during the Period of
Restriction, such Participant's outstanding Restricted Shares shall be forfeited
to the Company without payment, unless the Committee, in its sole discretion,
determines otherwise.

                                     -15-
<PAGE>

                                  ARTICLE VIII
                                 DEFERRED STOCK

     8.1 Award of Deferred Stock . Subject to the terms and provisions of the
Plan, at any time and from time to time, (a) the Chief Executive Officer may
grant Deferred Stock Bonus Awards or Deferred Stock Agreements to Employees who
are not Officers or Covered Employees and (b) the Committee may grant Deferred
Stock Bonus Awards or Deferred Stock Agreements to Officers or Covered
Employees. The Chief Executive Officer or the Committee shall have complete
discretion in determining the amount of Deferred Stock granted to each Employee
(subject to Article IV herein) and, consistent with the provisions of the Plan,
in determining the terms and conditions pertaining to such Awards of Deferred
Stock.

     8.2 Deferred Stock Bonus Awards. Deferred Stock Bonus Awards may be granted
as part of a management incentive program under which part of the annual
performance bonus awarded to managers and other key employees is made in
Deferred Stock. Subject to the terms of the Plan, Deferred Stock Bonus Awards
shall have such terms and conditions as determined by (a) the Chief Executive
Officer with respect to Employees who are not Officers or Covered Employees and
(b) the Committee with respect to Officers or Covered Employees. As determined
in the discretion of (a) the Chief Executive Officer with respect to Employees
who are not Officers or Covered Employees and (b) the Committee with respect to
Officers or Covered Employees, and subject to the terms of the Plan,
Participants may elect to receive their Deferred Stock Bonus Award in the form
of either a Current Award or a Deferred Award.

     (A)  Method of Election. Each Participant who is granted a Deferred Stock
          Bonus Award and selected by (a) the Chief Executive Officer with
          respect to Employees who are not Officers or Covered Employees and (b)
          the Committee with respect to Officers or Covered Employees, in their
          respective discretion, may elect, in writing, on a form to be
          furnished by the Company, to receive a Current Award or a Deferred
          Award. Notwithstanding the foregoing, any eligible Participant who
          does not elect to receive a Deferred Award within the time designated
          by the Committee shall be granted a Current Award.

     (B)  Deferred Award.

          (i)  Vesting. Deferred Stock granted in connection with a Deferred
               Award shall contingently vest, pro rata, in annual installments
               commencing one year after the date of the Deferred Stock Bonus
               Award and continuing on each January 2 thereafter until the
               expiration of a ten-year period from such commencement date.
               Notwithstanding the foregoing, all unvested Deferred Stock
               subject to a Deferred Award shall vest upon the Participant's (1)
               termination of employment following attainment of age 55 with ten
               (10) Years of Service, (2) termination of employment with
               retirement approval from the Committee and with twenty (20) Years
               of Service, (3) Disability, or (4) death. Subject to Section 4.3
               herein, unvested Deferred Stock shall not continue to vest
               following termination of employment for any other reason.


                                     -16-
<PAGE>

          (ii) Distribution of Shares. Vested Shares shall be distributed to the
               Participant in two (2) to ten (10) approximately equal annual
               installments, as elected by the Participant, or over such shorter
               period as determined by the Committee. Such distribution shall
               commence in the month of January following the date the
               Participant terminates employment; provided, however, that the
               Participant may elect to receive his or her vested Shares in a
               single distribution which shall take place in the month of
               January following his or her termination of employment.

                    All such elections made pursuant to this Section 8.2(B)(ii)
               shall be made at the time the Deferred Stock Bonus Award is
               granted, and shall be made, in writing, on a form prescribed by
               the Committee. Upon a Participant's death, all undistributed
               vested Deferred Stock will be distributed in one distribution as
               provided in Article XIII herein.

     (C)  Current Award.

          (i)  Distribution of Shares. Shares subject to a Current Award will be
               distributed in ten (10) consecutive, approximately equal, annual
               installments, commencing one (1) year after the date of the
               Deferred Stock Bonus Award. If the Participant dies prior to
               distribution of all Shares to which he or she is entitled, the
               remaining Shares will be distributed in one distribution as
               provided in Article XIII herein.

          (ii) Forfeiture of Shares. Any undistributed Shares subject to a
               Current Award will be forfeited and the Deferred Stock Bonus
               Award relating thereto terminated, without payment, if the
               Participant's employment with the Company is terminated for any
               reason other than the Participant's (1) termination of employment
               at or beyond age 55 with 10 Years of Service, (2) retirement
               after 20 Years of Service with approval from the Committee, (3)
               Disability, or (4) death. Any undistributed Shares not subject to
               forfeiture shall continue to be distributed to the Participant
               under the distribution schedule which would have applied to those
               Shares if the Participant had not terminated employment, or over
               such shorter period as may be determined by the Committee.

     (D)  Conditions. Distribution of Shares under Current Awards and Deferred
          Awards is conditioned upon:

          (i)   the Participant not committing any criminal offense or malicious
                tort relating to or against the Company;

          (ii)  the Participant not Engaging in Competition; and

          (iii) the Participant having provided the Committee with a current
                address where the Deferred Stock Bonus Award may be distributed.

                                     -17-
<PAGE>

               If said conditions are not met, all undistributed Shares will be
          forfeited and the Deferred Stock Bonus Award terminated, without
          payment.

     8.3  Deferred Stock Agreements . Deferred Stock Agreements represent
Deferred Stock granted to a Participant subject to the following conditions:

          (a) Vesting . Deferred Stock granted pursuant to this Section 8.3
     shall contingently vest over a specified number of years, as determined by
     (a) the Chief Executive Officer with respect to Employees who are not
     Officers or Covered Employees or (b) the Committee with respect to Officers
     or Covered Employees. Notwithstanding the foregoing, all unvested Deferred
     Stock subject to a Deferred Stock Agreement shall immediately vest upon the
     Participant's: (1) termination of employment following attainment of age 55
     with ten (10) Years of Service, (2) termination of employment with
     retirement approval from the Committee and with twenty (20) Years of
     Service, (3) termination of employment as a result of Disability, or (4)
     termination of employment as a result of death. Subject to Section 4.3
     herein, unless otherwise provided in the Deferred Stock Agreement, if the
     Participant's employment with the Company shall be terminated for any other
     reason, all Deferred Stock which is not vested before such termination of
     employment shall be forfeited and the Deferred Stock Agreement terminated
     without payment.

          (b) Distribution of Shares. Vested Deferred Stock granted pursuant to
     this Section 8.3 shall be distributed to the Participant in the form of
     Shares in the manner specified in the Deferred Stock Agreement, or over
     such shorter period as the Committee may direct. Such distribution shall
     commence on January 2 following the first to occur of the date the
     Participant (1) retires, (ii) becomes Disabled, or (iii) attains at least
     age 65 and is no longer employed by the Company. Upon the Participant's
     death or as soon as practicable thereafter, all unpaid vested Deferred
     Stock shall be distributed in the form of Shares, in one distribution, as
     provided in Article XIII.

          (c) Conditions . Distribution of Shares subject to Deferred Stock
     Agreements is conditioned upon:

              (i)   the Participant not Engaging in Competition;

              (ii)  the Participant not committing any criminal offense or
          malicious tort relating to or against the Company; and

              (iii) the Participant having provided the Committee with a
          current address where the Deferred Stock may be distributed.

If such conditions are not met, all undistributed Deferred Stock will be
forfeited and the Deferred Stock Agreement terminated without payment.

                                     -18-
<PAGE>

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

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

     8.6 Rights as a Shareholder. The Participant shall have no rights as a
shareholder with respect to Deferred Stock until the date of issuance of a stock
certificate or confirmation for such Shares. Except as otherwise expressly
provided by the Board or the Committee, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date of
issuance of a stock certificate or confirmation for such Shares.

                                     -19-
<PAGE>

                                   ARTICLE IX
                        SPECIAL RECOGNITION STOCK AWARDS

     Subject to the terms and provisions of the Plan, the Committee or its
designee, at any time and from time to time, may grant Special Recognition Stock
Awards to Employees in such amounts and upon such conditions as the Committee or
its designee shall determine.

                                     -20-
<PAGE>

                                   ARTICLE X
                                  OTHER AWARDS

     10.1 Grant of Other Share-Based Awards . The Committee may grant Other
Share-Based Awards to Participants in such number, and upon such terms, and at
any time and from time to time, as shall be determined by the Committee.

     10.2 Terms of Other Share-Based Awards . Other Share-Based Awards shall
contain such terms and conditions as the Committee may from time to time specify
and may be denominated in cash, in Shares, in Share-equivalent units, in Share
appreciation units, in securities or debentures convertible into Shares or in a
combination of the foregoing and may be paid in cash or in Shares, all as
determined by the Committee. Other Share-Based Awards may be issued alone or in
tandem with other Awards granted to Employees.

     10.3 Other Share-Based Award Agreement. Each Other Share-Based Awards shall
be evidenced by an Award Agreement that shall specify such terms and conditions
as the Committee may determine.

     10.4 Other Cash Performance-Based Awards. The Committee may grant Other
Cash Performance-Based Awards based on performance measures set forth in Article
XI not based on Shares upon such terms and at any time and from time to time as
shall be determined by the Committee. Each such Other Cash Performance-Based
Award shall be evidenced by an award agreement that shall specify such terms and
conditions as the Committee shall determine. An Other Cash Performance-Based
Award not based upon Shares shall not decrease the number of Shares under
Article IV which may be issued pursuant to other Awards. No individual shall be
eligible to receive a payment with respect to cash performance-based awards in
excess of $4,000,000 in any calendar year. Other Cash Performance-Based Awards
may relate to annual bonus or long-term performance awards.

                                     -21-
<PAGE>

                                   ARTICLE XI
                        PERFORMANCE MEASURES FOR AWARDS

     11.1 Performance Measures. Unless and until the Committee proposes for
shareholder vote and shareholders approve a change in the general performance
measures set forth in this Article XI, the attainment of which may determine the
degree of payout and/or vesting with respect to Awards which are designed to
qualify for the Performance-Based Exception, the performance measure(s) to be
used for purposes of such Awards shall be chosen by the Committee from among the
following alternatives:

          (a)  Consolidated cash flows,

          (b)   Consolidated financial reported earnings,

          (c)   Consolidated economic earnings,

          (d)   Earnings per share,

          (e)   Earnings as a percentage of average capital,

          (f)   Earnings as a multiple of interest expense,

          (g)  Business unit financial reported earnings,

          (h)  Business unit economic earnings,

          (i)  Business unit cash flows,

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

          (k)  Total capital invested in assets, and

          (l)  Capital invested in assets subject to the strategic alliance with
               Marriott International, Inc.


     11.2 Adjustments. The Committee shall have the discretion to adjust the
determinations of the degree of attainment of preestablished performance
objectives, provided, however, that Awards which are designed to qualify for the
Performance-Based Exception, and which are held by Covered Employees, may not be
adjusted upward (the Committee shall retain the discretion to adjust such Awards
downward.


                                     -22-
<PAGE>

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


                                     -23-
<PAGE>

                                  ARTICLE XII
                               CONVERSION AWARDS

     All 1998 Conversion Awards which, under the Allocation Agreement, are to be
denominated in shares of Host Marriott Corporation, shall be issued under the
Host REIT Plan as provided in the Allocation Agreement. The Committee shall
administer all such 1998 Conversion Awards under the Host REIT Plan, giving
service credit to the grantee of each such 1998 Conversion Award to the extent
required under the Allocation Agreement. All 1998 Conversion Awards shall be
subject to substantially similar terms and conditions as provided in the
holder's outstanding awards prior to the Contribution Date.


                                     -24-
<PAGE>

                                  ARTICLE XIII
                            BENEFICIARY DESIGNATION

     Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of the Participant's death
before the Participant has received any or all of such benefit. Each such
designation shall revoke all prior designations by the same Participant, shall
be in a form prescribed by the Company, and will be effective only when filed by
the Participant in writing with the Company during the Participant's lifetime.
In the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.


                                     -25-
<PAGE>

                                  ARTICLE XIV
                                   DEFERRALS

     The Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of an exercise of an
Option, or the payment of or the lapse or waiver of restrictions with respect to
any other Award. If any such deferral election is required or permitted, the
Committee shall, in its sole discretion, establish rules and procedures for such
payment deferrals.


                                     -26-
<PAGE>

                                   ARTICLE XV
                             RIGHTS OF PARTICIPANTS

     15.1 Employment or Service. Nothing in this Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant's
employment or service at any time, nor confer upon any Participant any right to
continue in the employ or service of the Company.

     15.2 Participation. No Employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.


                                     -27-
<PAGE>

                                   ARTICLE XVI
                    AMENDMENT, MODIFICATION AND TERMINATION

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

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

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

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

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

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

     16.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. Subject to the restriction set forth in Article XI herein
on the exercise of upward discretion with respect to Awards which have been
designed to comply with the Performance-Based Exception, the Committee may make
adjustments in the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4.3 hereof) affecting the Company or the
financial statements of the Company or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan.

     16.3 Awards Previously Granted. No termination, amendment, or modification
of the Plan or any Award shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the
Participant holding such Award.

                                     -28-
<PAGE>

     16.4 Compliance with Code Section 162(m). At all times when Code Section
162(m) is applicable, all Awards granted under this Plan shall comply with the
requirements of Code Section 162(m), provided, however, that in the event the
Committee determines that such compliance is not desired with respect to any
Award or Awards available for grant under the Plan, then compliance with Code
Section162(m) will not be required. In addition, in the event that changes are
made to Code Section 162(m) to permit greater flexibility with respect to any
Award or Awards available under the Plan, the Committee may, subject to this
Article XVI, make any adjustments it deems appropriate.

     16.5 Substitution of Awards in Mergers and Acquisitions. Awards may be
granted under the Plan from time to time in substitution for awards held by
employees or directors of entities who become or are about to become employees
or directors of the Company or a Subsidiary as a result of a merger,
consolidation or other acquisition of the employing entity or the acquisition by
the Company or a Subsidiary of the assets or stock of the employing entity. The
terms and conditions of any substitute awards so granted may vary from the terms
and conditions set forth herein to the extent that the Committee deems
appropriate at the time of grant to conform the substitute awards to the
provisions of the awards for which they are substituted.


                                     -29-
<PAGE>

                                  ARTICLE XVII
                                  WITHHOLDING

     17.1 Tax Withholding. The Company shall have the power and the right to
deduct from any amount otherwise due to the Participant, or to withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy
Federal, state, and local taxes, domestic or foreign, required by law or
regulation to be withheld with respect to any taxable event arising as a result
of this Plan.

     17.2 Share Withholding. With respect to withholding required in connection
with any Award, the Company may require, or the Committee may permit a
Participant to elect, that the withholding requirement be satisfied, in whole or
in part, by having the Company withhold Shares having a Fair Market Value on the
date the tax is to be determined equal to the minimum statutory total tax which
could be withheld on the transaction. Any election by a Participant shall be
irrevocable, made in writing, signed by the Participant, and shall be subject to
any restrictions or limitations that the Committee, in its sole discretion,
deems appropriate.


                                     -30-
<PAGE>

                                 ARTICLE XVIII
                                INDEMNIFICATION

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

                                     -31-
<PAGE>

                                   ARTICLE XIX
                                   SUCCESSORS

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


                                     -32-
<PAGE>

                                   ARTICLE XX
                               LEGAL CONSTRUCTION

     20.1 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.

     20.2 Severability . In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

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

     20.4 Securities Law Compliance. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void to the extent permitted by law and deemed advisable by the Committee.

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


                                     -33-
</TEXT>
</DOCUMENT>
