GAYLORD ENTERTAINMENT CO /DE
1997 OMNIBUS STOCK OPTION AND INCENTIVE PLAN
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<TYPE>EX-10.4
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<FILENAME>g77816exv10w4.txt
<DESCRIPTION>1997 OMNIBUS STOCK OPTION AND INCENTIVE PLAN
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                                                                    EXHIBIT 10.4

                          GAYLORD ENTERTAINMENT COMPANY
                  1997 OMNIBUS STOCK OPTION AND INCENTIVE PLAN

1. PURPOSE; TYPES OF AWARDS; CONSTRUCTION.

      The purpose of this 1997 Omnibus Stock Option and Incentive Plan (formerly
known as the Amended and Restated 1997 Stock Option and Incentive Plan) of
Gaylord Entertainment Company (the "Plan") is to afford an incentive to
officers, directors, key employees, consultants and advisors of Gaylord
Entertainment Company (the "Company"), or any Subsidiary (as defined herein)
which now exists or hereafter is organized or acquired by the Company, to
acquire a proprietary interest in the Company, to continue as officers,
directors, employees, consultants and advisors, to increase their efforts on
behalf of the Company and to promote the success of the Company's business.

      It is further intended that options granted by the Compensation or other
Committee (the "Committee") of the Board of Directors of the Company (the
"Board") pursuant to Section 8 of the Plan shall constitute "incentive stock
options" ("Incentive Stock Options") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and options granted by
the Committee pursuant to Section 7 of the Plan shall constitute "nonqualified
stock options" ("Nonqualified Stock Options"). The Committee may also grant
stock appreciation rights ("Stock Appreciation Rights" or "SARs") pursuant to
Section 9 of the Plan; shares of restricted stock ("Restricted Stock") pursuant
to Section 10 of the Plan; Deferred Shares of stock pursuant to Section 11 of
the Plan; and Performance Shares and Performance Units pursuant to Section 12 of
the Plan.

      The provisions of the Plan are intended to satisfy the requirements of
Section 16(b) of the Securities Exchange Act of 1934, and shall be interpreted
in a manner consistent with the requirements thereof, as now or hereafter
construed, interpreted, and applied by regulations, rulings, and cases. The Plan
is also designated so that awards granted hereunder intended to comply with the
requirements for "performance-based" compensation under Section 162(m) of the
Code may comply with such requirements. The creation and implementation of the
Plan shall not diminish or prejudice other compensation plans or programs
approved from time to time by the Board.

2. DEFINITIONS.

      As used in this Plan, the following words and phrases shall have the
meanings indicated:

            (a) "Common Stock" shall mean shares of Common Stock, par value $.01
per share, of the Company.

            (b) "Deferral Period" means the period of time during which Deferred
Shares are subject to deferral limitations under Section 11 of this Plan.

            (c) "Deferred Shares" means an award pursuant to Section 11 of this
Plan of the right to receive shares of Common Stock at the end of a specified
Deferral Period.

            (d) "Disability" shall mean a Grantee's (as defined in Section 3
hereof) inability to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for a continuous
period of not less than twelve (12) months.


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            (e) "Fair Market Value" per share of Common Stock as of a particular
date shall mean (i) the closing sales price per share of Common Stock on the
national securities exchange on which the Common Stock is principally traded,
for the last preceding date on which there was a sale of such Common Stock on
such exchange, or (ii) if the shares of Common Stock are then traded in an
over-the-counter market, the average of the closing bid and asked prices for the
shares of Common Stock in such over-the-counter market for the last preceding
date on which there was a sale of such Common Stock in such market, or (iii) if
the shares of Common Stock are not then listed on a national securities exchange
or traded in an over-the-counter market, such value as the Committee, in its
sole discretion, shall determine.

            (f) "Immediate Family" shall mean any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include
adoptive relationships.

            (g) "Option" or "Options" shall mean a grant to a Grantee of an
option or options to purchase shares of Common Stock. Options granted by the
Committee pursuant to the Plan shall constitute either Incentive Stock Options
or Nonqualified Stock Options.

            (h) "Parent" shall mean any company (other than the Company) in an
unbroken chain of companies ending with the Company if, at the time of granting
an Option, each of the companies other than the Company owns stock or equity
interests (including partnership interests) possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock or equity
interests in one of the other companies in such chain.

      (i) "Performance Goals" means performance goals based on one or more
of the following criteria: (i) pre-tax income or after-tax income; (ii)
operating cash flow; (iii) operating profit; (iv) return on equity, assets,
capital, or investment; (v) earnings or book value per share; (vi) sales or
revenues; (vii) operating expenses; (viii) cost of capital; (ix) Common Stock
price appreciation; and (x) implementation or completion of critical projects or
processes. Where applicable, the Performance Goals may be expressed in terms of
attaining a specified level of the particular criteria or the attainment of a
percentage increase or decrease in the particular criteria, and may be applied
to one or more of the Company or any Subsidiary, or a division or strategic
business unit of the Company, or may be applied to the performance of the
Company relative to a market index, a group of other companies, or a combination
thereof, all as determined by the Committee. The Performance Goals may include a
threshold level of performance below which no payment will be made (or no
vesting will occur), levels of performance at which specified payments will be
made (or specified vesting will occur), and a maximum level of performance above
which no additional payment will be made (or at which full vesting will occur).
Each of the foregoing Performance Goals shall be determined, to the extent
applicable, in accordance with generally accepted accounting principles and
shall be subject to certification by the Committee; provided, that the Committee
shall have the authority to make equitable adjustments to the Performance Goals
in recognition of unusual or non-recurring events affecting the Company or any
Subsidiary or the financial statements of the Company or any Subsidiary, in
response to changes in applicable laws or regulations, or to account for items
of gain, loss, or expense determined to be extraordinary or unusual in nature or
infrequent in occurrence or related to the disposal of a segment of business or
related to a change in accounting principles.


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            (j) "Performance Period" means a period of time established under
Section 12 of this Plan within which the Performance Goals relating to a
Performance Share, Performance Unit, or Deferred Shares are to be achieved.

            (k) "Performance Share" means a bookkeeping entry that records the
equivalent of one share of Common Stock awarded pursuant to Section 12 of this
Plan.

            (l) "Performance Unit" means a bookkeeping entry that records a unit
equivalent to $1.00 awarded pursuant to Section 12 of this Plan.

            (m) "Subsidiary" shall mean any company (other than the Company) in
an unbroken chain of companies beginning with the Company if, at the time of
granting an Option, each of the companies other than the last company in the
unbroken chain owns stock or equity interests (including partnership interests)
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock or equity interests in one of the other companies in such
chain.

            (n) "Ten Percent Stockholder" shall mean a Grantee who, at the time
an Incentive Stock Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Parent or Subsidiary.

            (o) "Retirement" means retirement by an employee from active
employment with the Company or any Subsidiary (i) on or after attaining age 65,
or (ii) with the express written consent of the Company on or after attaining
age 55.

            (p) "Voting Trust" shall mean the trust created by that certain
Voting Trust Agreement, dated as of October 3, 1990, as amended October 7, 1991,
and as may be amended hereafter from time to time, and "Voting Trustees" shall
mean the trustees of the Voting Trust.

3. ADMINISTRATION.

      The Plan shall be administered by the Committee, which will be comprised
solely of "Non-Employee Directors" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or by the
Board if for any reason the Committee is not so comprised, in which case all
references herein to the Committee shall refer to the Board.

      The Committee shall have the authority in its discretion, subject to and
not inconsistent with the express provisions of the Plan, to administer the Plan
and to exercise all the powers and authorities either specifically granted to it
under the Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to grant Options, SARs, Restricted
Stock, Deferred Shares, Performance Shares, and Performance Units; to determine
which Options shall constitute Incentive Stock Options and which Options shall
constitute Nonqualified Stock Options and whether such Options will be
accompanied by Stock Appreciation Rights; to determine the purchase price of the
shares of Common Stock covered by each Option (the "Option Price") and SARs, the
kind of consideration payable (if any) with respect to awards, and the various
methods for payment; to determine the Deferral Period, the period during which
Options may be exercised and during which Restricted Stock shall be subject to
restrictions, and whether in whole or in installments; to determine the persons
to whom, and the time or times at which awards shall be granted (such persons
are referred to herein as "Grantees"); to determine the number of shares to be
covered by each award; to determine the terms, conditions, and restrictions of
any Performance


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Goals and the number of Options, SARs, shares of Restricted Stock, Deferred
Shares, Performance Shares or Performance Units subject thereto; to interpret
the Plan; to prescribe, amend, and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the agreements (which need not be
identical) entered into in connection with awards granted under the Plan (the
"Agreements"); to cancel or suspend awards, as necessary; and to make all other
determinations deemed necessary or advisable for the administration of the Plan.

      The Committee may delegate to one or more of its members or to one or more
agents such administrative duties as it may deem advisable, and the Committee or
any person to whom it has delegated duties as aforesaid may employ one or more
persons to render advice with respect to any responsibility the Committee or
such person may have under the Plan. All decisions, determinations, and
interpretations of the Committee shall be final and binding on all Grantees of
any awards under this Plan.

      The Board shall fill all vacancies, however caused, in the Committee. The
Board may from time to time appoint additional members to the Committee, and may
at any time remove one or more Committee members and substitute others. One
member of the Committee shall be selected by the Board as chairman. The
Committee shall hold its meetings at such times and places as it shall deem
advisable. All determinations of the Committee shall be made by a majority of
its members either present in person or participating by conference telephone at
a meeting or by written consent. The Committee may appoint a secretary and make
such rules and regulations for the conduct of its business as it shall deem
advisable, and shall keep minutes of its meetings.

      No members of the Board or Committee shall be liable for any action taken
or determination made in good faith with respect to the Plan or any award
granted hereunder.

4. ELIGIBILITY.

      Directors, officers, key employees, consultants and advisors of the
Company or any Subsidiary shall be eligible to receive awards hereunder;
provided, however, that only consultants or advisors who have rendered bona fide
services to the Company or any Subsidiary in connection with its business
operations, and not in connection with the offer or sale of securities in
capital-raising transactions, shall be eligible to receive awards hereunder. In
determining the persons to whom awards shall be granted and the number of shares
or Performance Units to be covered by each award, the Committee, in its sole
discretion, shall take into account the contribution by the eligible
participants to the management, growth, and profitability of the business of the
Company and such other factors as the Committee shall deem relevant.

5. STOCK.

      The maximum number of shares of Common Stock reserved for the grant of
awards under the Plan shall be 5,450,000 (including shares of Common Stock
reserved for the grant of awards issued in connection with the Distribution
Agreement (as defined below)), subject to adjustment as provided in Section 13
hereof. Such shares may, in whole or in part, be authorized but unissued shares
or shares that shall have been or may be reacquired by the Company.

      If any outstanding award under the Plan should, for any reason, expire or
be canceled, forfeited, or terminated, without having been exercised in full,
the shares of Common Stock allocable


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to the unexercised, canceled, forfeited, or terminated portion of such award
shall (unless the Plan shall have been terminated) become available for
subsequent grants of awards under the Plan.

      The maximum number of shares of Common Stock with respect to which awards
(including Options, SARs, Restricted Stock, Deferred Shares, Performance Shares,
and Performance Units) may be granted under the Plan to any eligible employee
during any consecutive three-year period shall be 1,000,000, subject to
adjustment as provided in Section 13 hereof. Notwithstanding the foregoing,
shares of Common Stock issued or issuable to any person in connection with the
Agreement and Plan of Distribution, dated as of September 30, 1997, between the
Company and Gaylord Entertainment Company, a Delaware corporation (the
"Distribution Agreement") shall not be counted for purposes of the maximum
number of shares limitation in the preceding sentence.

6. TERMS AND CONDITIONS OF OPTIONS.

      Each Option granted pursuant to the Plan shall be evidenced by a written
agreement between the Company and the Grantee (the "Option Agreement"), in such
form as the Committee shall from time to time approve, which Option Agreement
shall comply with and be subject to the following terms and conditions:

            (a) Number of Shares. Each Option Agreement shall state the number
of shares of Common Stock to which the Option relates.

            (b) Type of Option. Each Option Agreement shall specifically state
that the Option constitutes an Incentive Stock Option or a Nonqualified Stock
Option.

            (c) Option Price. Each Option Agreement shall state the Option
Price, which, in the case of an Incentive Stock Option, shall not be less than
one hundred percent (100%) of the Fair Market Value of the shares of Common
Stock covered by the Option on the date of grant. The Option Price shall be
subject to adjustment as provided in Section 13 hereof. Unless otherwise stated
in the resolution, the date on which the Committee adopts a resolution expressly
granting an Option shall be considered the day on which such Option is granted.

            (d) Medium and Time of Payment. The Option Price shall be paid in
full, at the time of exercise, in any manner that the Committee shall deem
appropriate or that the Option Agreement shall provide for, including, in cash,
in shares of Common Stock having a Fair Market Value equal to such Option Price,
in cash provided through a broker-dealer sale and remittance procedure, approved
by the Committee, in a combination of cash and Common Stock, or in such other
manner as the Committee shall determine.

            (e) Term and Exercisability of Options. Each Option shall be
exercisable at such times and under such conditions as the Committee, in its
discretion, shall determine; provided, however, that in the case of an Incentive
Stock Option, such exercise period shall not exceed ten (10) years from the date
of grant of such Option. The exercise period shall be subject to earlier
termination as provided in Section 6(g) hereof. An Option may be exercised, as
to any or all full shares of Common Stock as to which the Option has become
exercisable, by giving written notice of such exercise to the Committee or its
designated agent.

            (f) Termination of Employment.


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                  (i) Generally. Except as otherwise provided herein or as
determined by the Committee, an Option may not be exercised unless the Grantee
is then in the service or employ of the Company or a Parent or Subsidiary (or a
company or a parent or subsidiary company of such company issuing or assuming
the Option in a transaction to which Section 424(a) of the Code applies), and
unless the Grantee has remained continuously in such service or employ since the
date of grant of the Option. Unless otherwise determined by the Committee at or
after the date of grant, in the event that the employment of a Grantee or the
service provided to the Company by the Grantee terminates (other than by reason
of death, Disability, Retirement, or for Cause) all Options that are exercisable
at the time of such termination may be exercised for a period of 90 days from
the date of such termination or until the expiration of the stated term of the
Option, whichever period is shorter. For purposes of interpreting this Section
6(f) only, the service of a director as a non-employee member of the Board shall
be deemed to be employment by the Company.

                  (ii) Death or Disability. If a Grantee's employment with, or
service to, the Company or a Parent or Subsidiary terminates by reason of death,
or if the Grantee's employment or service terminates by reason of Disability,
all Options theretofore granted to such Grantee will become fully vested and
exercisable (notwithstanding any terms of the Options providing for delayed
exercisability) and may be exercised by the Grantee, by the legal representative
of the Grantee's estate, or by the legatee under the Grantee's will at any time
until the expiration of the stated term of the Option. In the event that an
Option granted hereunder is exercised by the legal representative of a deceased
or disabled Grantee, written notice of such exercise must be accompanied by a
certified copy of letters testamentary or equivalent proof of the right of such
legal representative or legatee to exercise such Option.

                  (iii) Retirement. If a Grantee's employment with, or service
to, the Company or a Parent or Subsidiary terminates by reason of Retirement,
any Option held by the Grantee may thereafter be exercised, to the extent it was
exercisable at the time of such Retirement or on such accelerated basis as the
Committee may determine at or after the date of grant (but before the date of
such Retirement), at any time until the expiration of the stated term of the
Option.

                  (iv) Cause. If a Grantee's employment with, or service to, the
Company or a Parent or Subsidiary terminates for "Cause" (as determined by the
Committee in its sole discretion) the Option, to the extent not theretofore
exercised, shall terminate on the date of termination of employment.

                  (v) Committee Discretion. Notwithstanding the provisions of
subsections (i) through (iv) above, the Committee may, in its sole discretion,
at or after the date of grant (but before the date of termination), establish
different terms and conditions pertaining to the effect on any Option of
termination of a Grantee's employment with, or service to, the Company or a
Parent or Subsidiary, to the extent permitted by applicable federal and state
law.

            (g) Other Provisions. The Option Agreements evidencing Options under
the Plan shall contain such other terms and conditions, not inconsistent with
the Plan, as the Committee may determine.

7. NONQUALIFIED STOCK OPTIONS.

      Options granted pursuant to this Section 7 are intended to constitute
Nonqualified Stock Options and shall be subject only to the general terms and
conditions specified in Section 6 hereof .


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8. INCENTIVE STOCK OPTIONS.

      Options granted pursuant to this Section 8 are intended to constitute
Incentive Stock Options and shall be subject to the following special terms and
conditions, in addition to the general terms and conditions specified in Section
6 hereof

            (a) Value of Shares. The aggregate Fair Market Value (determined as
of the date the Incentive Stock Option is granted) of the shares of equity
securities of the Company with respect to which Incentive Stock Options granted
under this Plan and all other option plans of any Parent or Subsidiary become
exercisable for the first time by each Grantee during any calendar year shall
not exceed $100,000. To the extent such $100,000 limit has been exceeded with
respect to any Options first becoming exercisable, including acceleration upon a
Change in Control, and notwithstanding any statement in the Option Agreement
that it constitutes an Incentive Stock Option, the portion of such Option(s)
that exceeds such $100,000 limit shall be treated as a Nonqualified Stock
Option.

            (b) Ten Percent Stockholder. In the case of an Incentive Stock
Option granted to a Ten Percent Stockholder, (i) the Option Price shall not be
less than one hundred ten percent (110%) of the Fair Market Value of the shares
of Common Stock on the date of grant of such Incentive Stock Option, and (ii)
the exercise period shall not exceed five (5) years from the date of grant of
such Incentive Stock Option.

9. STOCK APPRECIATION RIGHTS.

      The Committee is authorized to grant SARs to Grantees on the following
terms and conditions:

            (a) In General. Unless the Committee determines otherwise, an SAR
(i) granted in tandem with a Nonqualified Stock Option may be granted at the
time of grant of the related Nonqualified Stock Option or at any time
thereafter, and (ii) granted in tandem with an Incentive Stock Option may only
be granted at the time of grant of the related Incentive Stock Option. An SAR
granted in tandem with an Option shall be exercisable only to the extent the
underlying Option is exercisable and shall terminate when the underlying Option
terminates.

            (b) SARs. An SAR shall confer on the Grantee a right to receive an
amount with respect to each share subject thereto, upon exercise thereof, equal
to the excess of (i) the Fair Market Value of one share of Common Stock on the
date of exercise over (ii) the grant price of the SAR (which in the case of an
SAR granted in tandem with an Option shall be equal to the exercise price of the
underlying Option, and which in the case of any other SAR shall be such price as
the Committee may determine).

            (c) Performance Goals. The Committee may condition the exercise of
any SAR upon the attainment of specified Performance Goals, in its sole
discretion.

10. RESTRICTED STOCK.

      The Committee may award shares of Restricted Stock to any eligible
employee or director. Each award of Restricted Stock under the Plan shall be
evidenced by an instrument, in such form as the Committee shall from time to
time approve (the "Restricted Stock Agreement"), and shall comply


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with the following terms and conditions (and with such other terms and
conditions not inconsistent with the terms of this Plan as the Committee, in its
discretion, shall establish including, without limitation, the requirement that
a Grantee provide consideration for Restricted Stock upon the lapse of
restrictions):

            (a) The Committee shall determine the number of shares of Common
Stock to be issued to the Grantee pursuant to the award.

            (b) Shares of Restricted Stock may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution, for such period as the Committee shall
determine from the date on which the award is granted (the "Restricted Period").
The Committee may impose such other restrictions and conditions on the shares as
it deems appropriate including the satisfaction of Performance Goals.
Certificates for shares of stock issued pursuant to Restricted Stock awards
shall bear an appropriate legend referring to such restrictions, and any attempt
to dispose of any such shares of stock in contravention of such restrictions
shall be null and void and without effect. During the Restricted Period, such
certificates shall be held in escrow by an escrow agent appointed by the
Committee. In determining the Restricted Period of an award, the Committee may
provide that the foregoing restrictions lapse at such times, under such
circumstances, and in such installments, as the Committee may determine.

            (c) Subject to such exceptions as may be determined by the
Committee, if the Grantee's continuous employment with the Company or any Parent
or Subsidiary shall terminate for any reason prior to the expiration of the
Restricted Period of an award, any shares remaining subject to restrictions
(after taking into account the provisions of Subsection (f) of this Section 10)
shall thereupon be forfeited by the Grantee and transferred to, and reacquired
by, the Company or a Parent or Subsidiary at no cost to the Company or such
Parent or Subsidiary.

            (d) During the Restricted Period the Grantee shall possess all
incidents of ownership of such shares, subject to Subsection (b) of this Section
10, including the right to receive cash dividends with respect to such shares
and to vote such shares; provided, that shares of Common Stock distributed in
connection with a stock split or stock dividend shall be subject to restriction
and a risk of forfeiture to the same extent as the Restricted Stock with respect
to which such shares are distributed.

            (e) Upon the occurrence of any of the events described in Section
13(c), all restrictions then outstanding with respect to shares of Restricted
Stock awarded hereunder shall automatically expire and be of no further force or
effect.

            (f) The Committee shall have the authority (and the Restricted Stock
Agreement may so provide) to cancel all or any portion of any outstanding
restrictions prior to the expiration of the Restricted Period with respect to
any or all of the shares of Restricted Stock awarded on such terms and
conditions as the Committee shall deem appropriate.

11. DEFERRED SHARES.

      The Committee may authorize grants of Deferred Shares to Grantees upon
such terms and conditions as the Committee may determine in accordance with the
following provisions:


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            (a) Each grant shall constitute the agreement by the Company to
issue or transfer shares of Common Stock to the Grantee in the future in
consideration of the performance of services, subject to the fulfillment during
the Deferral Period of such conditions as the Committee may specify.

            (b) Each grant may be made without additional consideration from the
Grantee or in consideration of a payment by the Grantee that is less than the
Fair Market Value on the date of grant.

            (c) Each grant shall provide that the Deferred Shares covered
thereby shall be subject to a Deferral Period, which shall be fixed by the
Committee on the date of grant, and any grant or sale may provide for the
earlier termination of such period in the event of a change in control of the
Company or other similar transaction or event.

            (d) During the Deferral Period, the Grantee shall not have any right
to transfer any rights under the subject award, shall not have any rights of
ownership in the Deferred Shares and shall not have any right to vote such
shares, but the Committee may on or after the date of grant authorize the
payment of dividend equivalents on such shares in cash or additional shares of
Common Stock on a current, deferred or contingent basis.

            (e) Any grant or the vesting thereof may be further conditioned upon
the attainment of Performance Goals established by the Committee in accordance
with the applicable provisions of Section 12 of this Plan regarding Performance
Shares and Performance Units.

            (f) Each grant shall be evidenced by an agreement delivered to and
accepted by the Grantee and containing such terms and provisions as the
Committee may determine consistent with this Plan.

12. PERFORMANCE SHARES AND PERFORMANCE UNITS.

      The Committee may also authorize grants of Performance Shares and
Performance Units, which shall become payable to the Grantee upon the
achievement of specified Performance Goals, upon such terms and conditions as
the Committee may determine in accordance with the following provisions:

            (a) Each grant shall specify the number of Performance Shares or
Performance Units to which it pertains, which may be subject to adjustment to
reflect changes in compensation or other factors.

            (b) The Performance Period with respect to each Performance Share or
Performance Unit shall commence on the date of grant and may be subject to
earlier termination in the event of a Change in Control (as defined in Section
13(c)) or other similar transaction or event.

            (c) Each grant shall specify the Performance Goals that are to be
achieved by the Grantee.

            (d) Each grant may specify in respect of the specified Performance
Goals a minimum acceptable level of achievement below which no payment will be
made and may set forth a formula for determining the amount of any payment to be
made if performance is at or above such


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minimum acceptable level but falls short of the maximum achievement of the
specified Performance Goals.

            (e) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units that shall have been earned, and any
grant may specify that any such amount may be paid by the Company in cash,
shares of Common Stock or any combination thereof and may either grant to the
Grantee or reserve to the Committee the right to elect among those alternatives.

            (f) Any grant of Performance Shares may specify that the amount
payable with respect thereto may not exceed a maximum specified by the Committee
on the date of grant. Any grant of Performance Units may specify that the amount
payable, or the number of shares of Common Stock issued, with respect thereto
may not exceed maximums specified by the Committee on the Grant Date.

            (g) Any grant of Performance Shares may provide for the payment to
the Grantee of dividend equivalents thereon in cash or additional shares of
Common Stock on a current, deferred or contingent basis.

            (h) If provided in the terms of the grant, the Committee may adjust
Performance Goals and the related minimum acceptable level of achievement if, in
the sole judgment of the Committee, events or transactions have occurred after
the date of grant that are unrelated to the performance of the Grantee and
result in distortion of the Performance Goals or the related minimum acceptable
level of achievement.

            (i) Each grant shall be evidenced by an agreement delivered to and
accepted by the Grantee, which shall state that the Performance Shares or
Performance Units are subject to all of the terms and conditions of this Plan
and such other terms and provisions as the Committee may determine consistent
with this Plan.

13. EFFECT OF CERTAIN CHANGES.

            (a) If there is any change in the shares of Common Stock through the
declaration of extraordinary cash dividends, stock dividends, recapitalization,
stock splits, or combinations or exchanges of such shares, or other similar
transactions, the number of shares of Common Stock available for awards (both
the maximum number of shares issuable under the Plan as a whole and the maximum
number of shares issuable on a per-employee basis, each as set forth in Section
5 hereof), the number of such shares covered by outstanding awards, the
Performance Goals, and the price per share of Options or SARs shall be
proportionately adjusted by the Committee to reflect such change in the issued
shares of Common Stock; provided, that any fractional shares resulting from such
adjustment shall be eliminated; and provided, further, that, with respect to
Incentive Stock Options, such adjustment shall be made in accordance with
Section 424(h) of the Code.

            (b) In the event of the dissolution or liquidation of the Company;
in the event of any corporate separation or division, including but not limited
to, split-up, split-off or spin-off; or in the event of other similar
transactions, the Committee may, in its sole discretion, provide that either:

                  (i) the Grantee of any award hereunder shall have the right to
exercise an Option (at its then Option Price) and receive such property, cash,
securities, or any combination


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thereof upon such exercise as would have been received with respect to the
number of shares of Common Stock for which such Option might have been exercised
immediately prior to such dissolution, liquidation, or corporate separation or
division; or

                  (ii) each Option shall terminate as of a date to be fixed by
the Committee and that not less than thirty (30) days' written notice of the
date so fixed shall be given to each Grantee, who shall have the right, during
the period of thirty (30) days preceding such termination, to exercise all or
part of such Option.

      In the event of a proposed sale of all or substantially all of the assets
of the Company or the merger of the Company with or into another corporation,
any award then outstanding shall be assumed or an equivalent award shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless such successor corporation does not agree to
assume the award or to substitute an equivalent award, in which case the
Committee shall, in lieu of such assumption or substitution, provide for the
realization of such outstanding awards in the manner set forth in Section
13(b)(i) or 13(b)(ii) above.

            (c) If, while any awards remain outstanding under the Plan, any of
the following events shall occur (which events shall constitute a "Change in
Control" of the Company):

                  (i) the "beneficial ownership," as defined in Rule 13d-3 under
the Exchange Act, of securities representing more than a majority of the
combined voting power of the Company are acquired by any "person" as defined in
Sections 13(d) and 14(d) of the Exchange Act (other than (A) the Company, (B)
any trustee or other fiduciary holding securities under an employee benefit plan
of the Company, (C) the Voting Trust and the Voting Trustees, (D) Edward L.
Gaylord or any member of his Immediate Family, or any "person" controlled by,
controlling or under common control with Edward L. Gaylord or any member of his
Immediate Family; or (E) any corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company); or

                  (ii) the shareholders of the Company approve a definitive
agreement to merge or consolidate the Company with or into another company
(other than a merger or consolidation which would result in 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) a majority of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation), or to sell or otherwise dispose
of all or substantially all of its assets, or adopt a plan of liquidation; or

                  (iii) during any period of two consecutive years, individuals
who at the beginning of such period were members of the Board cease for any
reason to constitute at least a majority thereof (unless the election, or the
nomination for election by the Company's shareholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of such period);

then from and after the date on which any such Change in Control shall have
occurred (the "Acceleration Date"), any Option, SAR, share of Restricted Stock,
Deferred Share, Performance Share, or Performance Unit awarded pursuant to this
Plan shall be exercisable or otherwise nonforfeitable in full, as applicable,
whether or not otherwise exercisable or forfeitable.


                                       11
<PAGE>
            Following the Acceleration Date, the Committee shall, in the case of
a merger, consolidation, or sale or disposition of assets, promptly make an
appropriate adjustment to the number and class of shares of Common Stock
available for awards, and to the amount and kind of shares or other securities
or property receivable upon exercise or other realization of any outstanding
awards after the effective date of such transaction, and, if applicable, the
price thereof.

            (d) In the event of a change in the Common Stock of the Company as
presently constituted that is limited to a change of all of its authorized
shares of Common Stock into the same number of shares with a different par value
or without par value, the shares resulting from any such change shall be deemed
to be the Common Stock within the meaning of the Plan.

            (e) Except as herein before expressly provided in this Section 13,
the Grantee of an award hereunder shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class or the payment of
any stock dividend or any other increase or decrease in the number of shares of
stock of any class or by reason of any dissolution, liquidation, merger, or
consolidation or spin-off of assets or stock of another company; and any issue
by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common
Stock subject to an award. The grant of an award pursuant to the Plan shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structures or to merge or to consolidate or to dissolve, liquidate, or sell, or
transfer all or part of its business or assets or engage in any similar
transactions.

14. SURRENDER AND EXCHANGES OF AWARDS.

      The Option Price of an Option may not be amended or modified after the
grant of the Option, and an Option may not be surrendered in consideration of or
exchanged for a grant of a new Option having an Option Price below that of the
Option which was surrendered or exchanged.

15. PERIOD DURING WHICH AWARDS MAY BE GRANTED.

      Awards may be granted pursuant to the Plan from time to time within a
period of ten (10) years from the date of the Distribution (as defined in the
Distribution Agreement), provided that awards granted prior to such tenth
anniversary date may be extended beyond such date.

16. LIMITS ON TRANSFERABILITY OF AWARDS.

      Awards of Incentive Stock Options (and any SAR related thereto), Deferred
Shares, Performance Shares, and Performance Units shall not be transferable
otherwise than by will or by the laws of descent and distribution, and all
Incentive Stock Options are exercisable during the Grantee's lifetime only by
the Grantee. Awards of Nonqualified Stock Options (and any SAR related thereto)
shall not be transferable, without the prior written consent of the Committee,
other than (i) by will or by the laws of descent and distribution, (ii) by a
Grantee to a member of his or her Immediate Family, or (iii) to a trust for the
benefit of the Grantee or a member of his or her Immediate Family. Awards of
Restricted Stock shall be transferable only to the extent set forth in the
Restricted Stock Agreement.


                                       12
<PAGE>
17. EFFECTIVE DATE.

      The Plan shall be deemed to have taken effect on October 1, 1997.

18. AGREEMENT BY GRANTEE REGARDING WITHHOLDING TAXES.

      If the Committee shall so require, as a condition of exercise of an Option
or SAR or other realization of an award, each Grantee shall agree that no later
than the date of exercise or other realization of an award granted hereunder,
the Grantee will pay to the Company or make arrangements satisfactory to the
Committee regarding payment of any federal, state, or local taxes of any kind
required by law to be withheld upon the exercise of an Option or other
realization of an award. Alternatively, the Committee may provide that a Grantee
may elect, to the extent permitted or required by law, to have the Company
deduct federal, state, and local taxes of any kind required by law to be
withheld upon the exercise of an Option or realization of any award from any
payment of any kind due to the Grantee. The Committee may, in its sole
discretion, permit withholding obligations to be satisfied in shares of Common
Stock subject to the award.

19. AMENDMENT AND TERMINATION OF THE PLAN.

      The Board at any time and from time to time may suspend, terminate,
modify, or amend the Plan without stockholder approval to the fullest extent
permitted by the Exchange Act and the rules and regulations thereunder;
provided, however, that no suspension, termination, modification, or amendment
of the Plan may adversely affect any award previously granted hereunder, unless
the written consent of the Grantee is obtained.

20. RIGHTS AS A SHAREHOLDER.

      Except as provided in Section 10(d) hereof, a Grantee or a transferee of
an award shall have no rights as a shareholder with respect to any shares
covered by the award until the date of the issuance of a stock certificate to
him or her for such shares. No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities, or other property) or
distribution of other rights for which the record date is prior to the date such
stock certificate is issued, except as provided in Section 13 hereof.

21. NO RIGHTS TO SERVICE OR EMPLOYMENT.

      Nothing in the Plan or in any award granted or Agreement entered into
pursuant hereto shall confer upon any Grantee the right to continue in the
employ of the Company or any Subsidiary or to be entitled to any remuneration or
benefits not set forth in the Plan or such Agreement or to interfere with or
limit in any way the right of the Company or any such Subsidiary to terminate
such Grantee's service to or employment by the Company or such Subsidiary.
Awards granted under the Plan shall not be affected by any change in duties or
position of a Grantee as long as such Grantee continues to provide service to or
is in the employ of the Company or any Subsidiary.


                                       13
<PAGE>
22. BENEFICIARY.

      A Grantee may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Grantee, the executor or administrator of the Grantee's estate
shall be deemed to be the Grantee's beneficiary.

23. UNFUNDED STATUS OF PLAN.

      The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a Grantee by
the Company, nothing contained herein shall give any such Grantee any rights
that are greater than those of a general creditor of the Company. In its sole
discretion, the Committee may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver Common
Stock or payments in lieu of or with respect to awards hereunder; provided,
however, that, unless the Committee otherwise determines with the consent of the
affected participant, the existence of such trusts or other arrangements is
consistent with the "unfunded" status of the Plan.

24. GOVERNING LAW.

      The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Delaware.


                                       14

</TEXT>
</DOCUMENT>
