NORTHSTAR REALTY FINANCE CORP.

                        2004 OMNIBUS STOCK INCENTIVE PLAN

SECTION 1.        GENERAL PURPOSE OF PLAN.

                  The name of this plan is the NorthStar Realty Finance Corp.
2004 Omnibus Stock Incentive Plan (the "Plan"). The purpose of the Plan is to
enable the Company to attract and retain highly qualified personnel who will
contribute to the Company's success and to provide incentives to Participants
(hereinafter defined) that are linked directly to increases in stockholder value
and will therefore inure to the benefit of all stockholders of the Company. To
accomplish the foregoing, the Plan provides that the Company may grant awards of
Stock, Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock and Other Awards (each as hereinafter defined).

SECTION 2.        DEFINITIONS.

                  For purposes of the Plan, the following terms shall be defined
as set forth below:

                  (a) "Additional IPO Shares" means any shares of Stock that the
Company issues and sells to the IPO Underwriters as a result of any exercise of
the overallotment option granted by the Company to the IPO Underwriters pursuant
to the underwriting agreement relating to the Initial Public Offering.

                  (b) "Administrator" means the Board, or if and to the extent
the Board does not administer the Plan, the Committee in accordance with Section
3 below.

                  (c) "Automatic Non-Employee Director Stock Grant" shall have
the meaning set forth in Section 10.

                  (d) "Award" means an award of Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock, Stock
or Other Awards under the Plan.

                  (e) "Beneficial Owner" shall have the meaning set forth in
Rule 13d-3 under the Exchange Act.

                  (f) "Board" means the Board of Directors of the Company.

                  (g) "Change in Control" of the Company shall be deemed to have
occurred if an event set forth in any one of the following paragraphs (i)-(iii)
shall have occurred unless prior to the occurrence of such event, the Board
determines that such event shall not constitute a Change in Control:

                      (i) any Person is or becomes Beneficial Owner, directly or
                      indirectly, of securities of the Company representing
                      twenty





                      percent 20% or more of the combined voting power of the
                      then outstanding securities of the Company, excluding (A)
                      any Person who becomes such a Beneficial Owner in
                      connection with a transaction described in clause (x) of
                      paragraph (ii) below, (B) any Person who becomes such a
                      Beneficial Owner through the issuance of such securities
                      with respect to purchases made directly from the Company;
                      and (C) NorthStar Capital Investment Corp. ("NCIC"); or

                      (ii) the consummation of a merger or consolidation of the
                      Company with any other corporation or the issuance of
                      voting securities of the Company in connection with a
                      merger or consolidation of the Company (or any direct or
                      indirect subsidiary of the Company) pursuant to applicable
                      stock exchange requirements, other than (x) a merger or
                      consolidation which would result in the voting securities
                      of the Company outstanding immediately prior to such
                      merger or consolidation continuing to represent (either by
                      remaining outstanding or by being converted into voting
                      securities of the surviving entity or any parent thereof)
                      fifty percent (50%) or more of the combined voting power
                      of the securities of the Company or such surviving entity
                      or any parent thereof outstanding immediately after such
                      merger or consolidation, or (y) a merger or consolidation
                      effected to implement a recapitalization of the Company
                      (or similar transaction) in which no Person is or becomes
                      the Beneficial Owner, directly or indirectly, of
                      securities of the Company representing twenty percent
                      (20%) or more of the combined voting power of the then
                      outstanding securities of the Company; or

                      (iii) the stockholders of the Company approve a plan of
                      complete liquidation or dissolution of the Company or an
                      agreement for the sale or disposition by the Company of
                      all or substantially all of the assets of the Company.

                 (h) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.

                 (i) "Committee" means any committee the Board may appoint to
administer the Plan. To the extent necessary and desirable, the Committee shall
be composed entirely of individuals who meet the qualifications referred to in
Section 162(m) of the Code and Rule 16b-3 under the Exchange Act. If at any time
or to any extent the Board shall not administer the Plan, then the functions of
the Board specified in the Plan shall be exercised by the Committee.

                 (j) "Company" means NorthStar Realty Finance Corp., a Maryland
corporation (or any successor corporation).

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                 (k) "Eligible Recipient" means an officer, director (including
a Non-Employee Director), employee, consultant or advisor of the Company or of
any Parent or Subsidiary.

                 (l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time.

                 (m) "Fair Market Value" means, as of any given date, the fair
market value of a share of Stock as determined by the Administrator using any
reasonable method and in good faith; provided that (i) if shares of Stock are
admitted to trading on a national securities exchange, the fair market value of
a share of Stock on any date shall be the closing sale price reported for such
share on the exchange on such date on which a sale was reported; (ii) if shares
of Stock are admitted to quotation on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or a successor quotation system
and has been designated as a National Market System ("NMS") security, fair
market value of a share on any date shall be the closing sale price reported for
such share on the system on such date on which a sale was reported; (iii) if
shares of Stock are admitted to quotation on the NASDAQ but have not been
designated as an NMS security, fair market value of a share on any such date
shall be the average of the highest bid and lowest asked prices for such share
on the system on such date on which both the bid and asked prices were reported.

                 (n) "Immediate Family" means 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 of the Participant.

                 (o) "Incentive Stock Option" means any Stock Option intended to
be designated as an "incentive stock option" within the meaning of Section 422
of the Code.

                 (p) "Initial Offering Price" means the initial public offering
price of the Stock as set forth in the final prospectus included within the
registration statement filed with the Securities and Exchange Commission for the
initial underwritten public offering of Stock.

                 (q) "Initial Public Offering" means the initial underwritten
public offering of Stock pursuant to the prospectus included within the
registration statement filed with the Securities and Exchange Commission.

                 (r) "IPO Underwriters" means the underwriters of the Initial
Public Offering.

                 (s) "Non-Employee Chairman" means the Chairman of the Board
upon the consummation of the Initial Public Offering if such Chairman is not an
employee of the Company.

                 (t) "Non-Employee Director" means a director of the Company who
is not an employee of the Company, other than the Non-Employee Chairman.

                                       3


                 (u) "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option, including any Stock Option that provides (as of
the time such Stock Option is granted) that it will not be treated as an
Incentive Stock Option.

                 (v) "Other Awards" means an award granted pursuant to Section
11.

                 (w) "Parent" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company, if each of the
corporations in the chain (other than the Company) owns stock possessing 50% or
more of the combined voting power of all classes of stock in one of the other
corporations in the chain.

                 (x) "Participant" means any Eligible Recipient selected by the
Administrator, pursuant to the Administrator's authority in Section 3 below, to
receive an Award.

                 (y) "Person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization, other entity or "group" (as defined in the Securities Exchange Act
of 1934).

                 (z) "Restricted Stock" means shares of Stock subject to certain
restrictions granted pursuant to Section 9 below.

                 (aa) "Stock" means the common stock, par value $0.01 per share,
of the Company.

                 (bb) "Stock Appreciation Right" means the right pursuant to an
award granted under Section 8 below to receive an amount equal to the excess, if
any, of (A) the Fair Market Value, as of the date such Stock Appreciation Right
or portion thereof is surrendered, of the shares of Stock covered by such right
or such portion thereof, over (B) the aggregate exercise price of such right or
such portion thereof.

                 (cc) "Stock Option" means an option to purchase shares of Stock
granted pursuant to Section 7 below.

                 (dd) "Subsidiary" means any corporation or other entity (other
than the Company) in which the Company has a controlling interest, either
directly or indirectly.

                 (ee) "Unit" or "Units" means a unit or units of limited
partnership interest in NorthStar Realty Finance Limited Partnership, a Delaware
limited partnership and the entity through which the Company conducts a
significant portion of its business.

SECTION 3.        ADMINISTRATION.

                 (a) The Plan shall be administered in accordance with the
requirements of Section 162(m) of the Code (but only to the extent necessary and
desirable to maintain qualification of Awards under the Plan under Section
162(m) of the Code) and, to the extent applicable, Rule 16b-3 under the Exchange
Act ("Rule 16b-3")

                                       4


by the Board or, at the Board's sole discretion, by the Committee, which shall
be appointed by the Board, and which shall serve at the pleasure of the Board.

                 (b) The Administrator shall have the power and authority to
grant Stock Options, Stock Appreciation Rights, Restricted Stock, Stock, Other
Awards or any combination of the foregoing hereunder to Eligible Recipients
pursuant to the terms of the Plan. In particular, but without limitation, the
Administrator shall have the authority:

                     (i) to select those Eligible Recipients who shall be
Participants;

                     (ii) to determine whether and to what extent Awards are to
be granted hereunder to Participants;

                     (iii) to determine the number of shares of Stock to be
covered by each Award granted hereunder;

                     (iv) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of each Award granted hereunder,
including the waiver or modification of any such terms or conditions;

                     (v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, which shall govern all written instruments
evidencing Awards granted hereunder, including the waiver or modification of any
such terms or conditions;

                     (vi) to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall from time to time deem
advisable; and

                     (vii) to interpret the terms and provisions of the Plan and
any Award issued under the Plan (and any award agreements relating thereto) and
to otherwise supervise the administration of the Plan.

                 (c) The Administrator may, in its absolute discretion, without
amendment to the Plan, (i) accelerate the date on which any Stock Option granted
under the Plan becomes exercisable, waive or amend the operation of Plan
provisions respecting exercise after termination of employment or otherwise
adjust any of the terms of such Stock Option, and (ii) accelerate the lapse of
restrictions, or waive any condition imposed hereunder, with respect to any
share of Restricted Stock or otherwise adjust any of the terms applicable to any
such Award; provided, however, that no action under this Section 3(c) shall
adversely affect any outstanding Award without the consent of the holder
thereof.

                 (d) All decisions made by the Administrator pursuant to the
provisions of the Plan shall be final, conclusive and binding on all persons,
including the Company and the Participants. No member of the Board or the
Committee, nor any officer or employee of the Company acting on behalf of the
Board or the Committee, shall be

                                       5



personally liable for any action, determination, or interpretation taken or made
in good faith with respect to the Plan, and all members of the Board or the
Committee and each and any officer or employee of the Company acting on their
behalf shall, to the extent permitted by law, be fully indemnified and protected
by the Company in respect of any such action, determination or interpretation.

SECTION 4.        SHARES RESERVED FOR ISSUANCE UNDER THE PLAN.

                 (a) The total number of shares of Stock reserved and available
for issuance under the Plan (the "Reserved Shares") shall initially be 1,375,000
shares. The number of Reserved Shares shall be automatically increased (without
any further action by the Board or the stockholders of the Company) by the
number of shares of Stock that is equal to five percent of any Additional IPO
Shares; provided, however, that the maximum number of Reserved Shares shall not
exceed ___________, subject to adjustment as set forth in Section 5 below. Such
shares may consist, in whole or in part, of authorized and unissued shares or
treasury shares.

                 (b) Subject to the provisions of Section 162(m) of the Code, as
from time to time applicable, to the extent that (i) a Stock Option expires or
is otherwise cancelled or terminated without being exercised, or (ii) any shares
of Stock subject to any Awards granted hereunder are forfeited, such shares of
Stock shall again be available for issuance in connection with future awards
granted under the Plan.

                 (c) The aggregate number of shares of Stock as to which Awards
may be granted to any individual during any calendar year may not, subject to
adjustment as provided in Section 5, exceed 50% of the shares of Stock reserved
for issuance for the purposes of the Plan in accordance with the provisions of
this Section 4.

SECTION 5.        EQUITABLE ADJUSTMENTS; CHANGE IN CONTROL.

                 (a) Upon the occurrence of any merger, reorganization,
consolidation, recapitalization, stock dividend or other change in corporate
structure affecting the Stock, the Administrator shall make appropriate
equitable adjustments, which may include, without limitation, adjustments to:
(i) the aggregate number of shares of Stock reserved for issuance under the
Plan, (ii) the kind, number and exercise price of outstanding Stock Options and
Stock Appreciation Rights granted under the Plan, and (iii) the kind, number and
purchase price of shares of Stock subject to outstanding awards of Restricted
Stock granted under the Plan, in each case as may be determined by the
Administrator, in its sole discretion. Such other substitutions or adjustments
shall be made as may be determined by the Administrator, in its sole discretion.
In connection with any event described in this paragraph, the Administrator may
provide, in its sole discretion, for the cancellation of any outstanding Awards
in exchange for payment in cash or other property equal to the Fair Market Value
of the Stock covered by such Awards, reduced by the option or exercise price, if
any.

                 (b) In the event of a Change in Control, unless otherwise
determined by the Board prior to the occurrence of such Change in Control, or
unless otherwise


                                       6



provided in an award agreement, such Awards shall become fully vested and
exercisable and all restrictions on the vesting or exercisability of such Awards
shall lapse as of the date of the Change in Control.

SECTION 6.        ELIGIBILITY.

                  Eligible Recipients shall be eligible to be granted Stock
Options, Stock Appreciation Rights, Restricted Stock, Stock, Other Awards or any
combination of the foregoing hereunder. The Participants under the Plan shall be
selected from time to time by the Administrator, in its sole discretion, from
among the Eligible Recipients, and the Administrator shall determine, in its
sole discretion, the number of shares of Stock covered by each such Award.

SECTION 7.        STOCK OPTIONS.

                  Stock Options may be granted alone or in addition to other
Awards granted under the Plan. Any Stock Option granted under the Plan shall be
in such form as the Administrator may from time to time approve, and the
provisions of Stock Option awards need not be the same with respect to each
Participant. Participants who are granted Stock Options shall enter into an
award agreement with the Company, in such form as the Administrator shall
determine, which shall set forth, among other things, the option price of the
Stock Option, the term of the Stock Option and provisions regarding
exercisability of the Stock Option granted thereunder.

                  The Stock Options granted under the Plan may be of two types:
(i) Incentive Stock Options and (ii) Non-Qualified Stock Options.

                  The Administrator shall have the authority to grant to any
officer or employee of the Company or of any Parent or Subsidiary (including
directors who are also officers of the Company) Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options (in each case with
or without Stock Appreciation Rights). Directors who are not also employees or
officers of the Company or of any Parent or Subsidiary, consultants or advisors
to the Company or to any Parent or Subsidiary may only be granted Non-Qualified
Stock Options (with or without Stock Appreciation Rights). To the extent that
any Stock Option does not qualify as an Incentive Stock Option, it shall
constitute a separate Non-Qualified Stock Option. More than one Stock Option may
be granted to the same Participant and be outstanding concurrently hereunder.

                  Stock Options granted under the Plan shall be subject to the
following terms and conditions and to the award agreement evidencing each Award
which shall contain such additional terms and conditions, not inconsistent with
the terms of the Plan, as the Administrator shall deem desirable:

                  (a) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the Administrator in its
sole discretion at the time of grant but shall not, in the case of Incentive
Stock Options, be less than 100% of the Fair Market Value of the Stock on such
date (110% of the Fair Market Value per


                                       7




share on such date if, on such date, the Eligible Recipient owns, or is deemed
to own under the Code, stock possessing more than ten percent (a "Ten Percent
Owner") of the total combined voting power of all classes of Stock).

                 (b) Option Term. The term of each Stock Option shall be fixed
by the Administrator, but no Stock Option shall be exercisable more than ten
years after the date such Stock Option is granted; provided, however, that if
the Eligible Recipient is a Ten Percent Owner, an Incentive Stock Option may not
be exercisable after the expiration of five years from the date such Incentive
Stock Option is granted.

                 (c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Administrator at or after the time of grant; provided, however, that no
action following the time of grant shall adversely affect any outstanding Stock
Option without the consent of the holder thereof. The Administrator may provide
at the time of grant, in its sole discretion, that any Stock Option shall be
exercisable only in installments, and the Administrator may waive such
installment exercise provisions at any time, in whole or in part, based on such
factors as the Administrator may determine, in its sole discretion, including
but not limited to in connection with any Change in Control of the Company.

                 (d) Method of Exercise. Subject to Section 7(c), Stock Options
may be exercised in whole or in part at any time during the option period, by
giving written notice of exercise to the Company specifying the number of shares
of Stock to be purchased, accompanied by payment in full of the purchase price
in cash or its equivalent, as determined by the Administrator. As determined by
the Administrator, in its sole discretion, payment in whole or in part may also
be made (i) in the form of unrestricted Stock already owned by the Participant
which, (x) in the case of unrestricted Stock acquired upon exercise of an
option, have been owned by the Participant for more than six months on the date
of surrender, and (y) has a Fair Market Value on the date of surrender equal to
the aggregate option price of the Stock as to which such Stock Option shall be
exercised; (ii) in the case of the exercise of a Non-Qualified Stock Option, in
the form of Restricted Stock subject to an award hereunder (based, in each case,
on the Fair Market Value of the Stock on the date the Stock Option is
exercised); provided, however, that in the case of an Incentive Stock Option,
the right to make payment in the form of already owned shares of Stock may be
authorized only at the time of grant; (iii) any other form of consideration
approved by the Administrator and permitted by applicable law; or (iv) any
combination of the foregoing. If payment of the option price of a Non-Qualified
Stock Option is made in whole or in part in the form of Restricted Stock, the
shares of Stock received upon the exercise of such Stock Option shall be
restricted in accordance with the original terms of the Restricted Stock award
in question, except that the Administrator may direct that such restrictions
shall apply only to that number of shares of Stock equal to the number of shares
surrendered upon the exercise of such Stock Option.

                 (e) Rights as Stockholder. A Participant shall generally have
the rights to dividends and any other rights of a stockholder with respect to
the Stock subject to the Stock Option only after the Participant has given
written notice of exercise, has



                                       8


paid in full for such shares, and, if requested, has given the representation
described in paragraph (b) of Section 14 below.

                 (f) Non-Transferability of Stock Options. Except as otherwise
provided by the Administrator, Stock Options may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will, by
the laws of descent or distribution, by instrument to an inter vivos or
testamentary trust in which the Stock Options are to be passed to beneficiaries
upon the death of the Participant, or by gift to Immediate Family, and may be
exercised, during the lifetime of the Participant, only by the Participant.

                 (g) Termination of Employment or Service. In the event that a
Participant ceases to be employed by or to provide services to any of the
Company, any Parent or any Subsidiary, any outstanding Stock Options previously
granted to such Participant shall be exercisable at such time or times and
subject to such terms and conditions as set forth in the award agreement
governing such Awards. Unless otherwise provided in the award agreement, Stock
Options granted to such Participant, to the extent they were not vested and
exercisable at the time of such termination, shall expire on the date of such
termination.

                 (h) Annual Limit on Incentive Stock Options. In addition to the
limitation applicable to Stock Options in Section 4(c) above, to the extent that
the aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of shares of Stock with respect to which Incentive Stock
Options granted to a Participant under this Plan and all other option plans of
the Company or of any Parent or Subsidiary become exercisable for the first time
by the Participant during any calendar year exceeds $100,000 (as determined in
accordance with Section 422(d) of the Code), the portion of such Incentive Stock
Options in excess of $100,000 shall be treated as Non-Qualified Stock Options.

SECTION 8.        STOCK APPRECIATION RIGHTS.

                  Stock Appreciation Rights may be granted either alone ("Free
Standing Rights") or in conjunction with all or part of any Stock Option granted
under the Plan ("Related Rights"). In the case of a Non-Qualified Stock Option,
Related Rights may be granted either at or after the time of the grant of such
Stock Option. In the case of an Incentive Stock Option, Related Rights may be
granted only at the time of the grant of the Incentive Stock Option. The
Administrator shall determine the Eligible Recipients to whom, and the time or
times at which, grants of Stock Appreciation Rights shall be made; the number of
shares of Stock to be awarded, the exercise price, and all other conditions of
Stock Appreciation Rights. The provisions of Stock Appreciation Rights need not
be the same with respect to each Participant.

                  Stock Appreciation Rights granted under the Plan shall be
subject to the following terms and conditions and to the award agreement
evidencing such Award which shall contain such additional terms and conditions,
not inconsistent with the terms of the Plan, as the Administrator shall deem
desirable:

                                       9


                 (a) Awards. The prospective recipient of a Stock Appreciation
Right shall not have any rights with respect to such Award, unless and until
such recipient has executed an agreement evidencing the award and delivered a
fully executed copy thereof to the Company, within a period of sixty days (or
such other period as the Administrator may specify) after the award date.
Participants who are granted Stock Appreciation Rights shall have no rights as
stockholders of the Company with respect to the grant or exercise of such
rights.

                 (b) Exercisability.

                     (i) Stock Appreciation Rights that are Free Standing
Rights ("Free Standing Stock Appreciation Rights") shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Administrator at or after grant.

                     (ii) Stock Appreciation Rights that are Related Rights
("Related Stock Appreciation Rights") shall be exercisable only at such time or
times and to the extent that the Stock Options to which they relate shall be
exercisable in accordance with the provisions of Section 7 above and this
Section 8 of the Plan; provided, however, that a Related Stock Appreciation
Right granted in connection with an Incentive Stock Option shall be exercisable
only if and when the Fair Market Value of the Stock subject to the Incentive
Stock Option exceeds the option price of such Stock Option.

                 (c) Payment Upon Exercise.

                     (i) Upon the exercise of a Free Standing Stock Appreciation
Right, the Participant shall be entitled to receive up to, but not more than, an
amount in cash or that number of shares of Stock (or any combination of cash and
shares of Stock) equal in value to the excess of the Fair Market Value of one
share of Stock as of the date of exercise over the price per share specified in
the Free Standing Stock Appreciation Right (which price shall be no less than
100% of the Fair Market Value of the Stock on the date of grant) multiplied by
the number of shares of Stock in respect of which the Free Standing Stock
Appreciation Right is being exercised, with the Administrator having the right
to determine the form of payment.

                     (ii) A Related Right may be exercised by a Participant by
surrendering the applicable portion of the related Stock Option. Upon such
exercise and surrender, the Participant shall be entitled to receive up to, but
not more than, an amount in cash or that number of shares of Stock (or any
combination of cash and shares of Stock) equal in value to the excess of the
Fair Market Value of one share of Stock as of the date of exercise over the
option price per share specified in the related Stock Option multiplied by the
number of shares of Stock in respect of which the Related Stock Appreciation
Right is being exercised, with the Administrator having the right to determine
the form of payment. Stock Options which have been so surrendered, in whole or
in part,


                                       10



shall no longer be exercisable to the extent the Related Rights have been so
exercised.

                 (d) Non-Transferability.

                     (i) Free Standing Stock Appreciation Rights shall be
transferable only when and to the extent that a Stock Option would be
transferable under paragraph (f) of Section 7 of the Plan.

                     (ii) Related Stock Appreciation Rights shall be
transferable only when and to the extent that the underlying Stock Option would
be transferable under paragraph (f) of Section 7 of the Plan.

                 (e) Termination of Employment or Service.

                     (i) In the event that a Participant ceases to be employed
by or to provide services to any of the Company, any Parent or any Subsidiary,
any outstanding Stock Appreciation Rights previously granted to such Participant
shall be exercisable at such time or times and subject to such terms and
conditions as set forth in the award agreement governing such Awards. Unless
otherwise provided in the award agreement, Stock Appreciation Rights granted to
such Participant, to the extent they were not vested and exercisable at the time
of such termination, shall expire on the date of such termination.

                     (ii) In the event of the termination of employment or
service of a Participant who has been granted one or more Related Stock
Appreciation Rights, such rights shall be exercisable at such time or times and
subject to such terms and conditions as applicable to the related Stock Options.

                 (f) Term.

                     (i) The term of each Free Standing Stock Appreciation Right
shall be fixed by the Administrator, but no Free Standing Stock Appreciation
Right shall be exercisable more than ten years after the date such right is
granted.

                     (ii) The term of each Related Stock Appreciation Right
shall be the term of the Stock Option to which it relates, but no Related Stock
Appreciation Right shall be exercisable more than ten years after the date such
right is granted.

SECTION 9.        RESTRICTED STOCK.

                  Awards of Restricted Stock may be issued either alone or in
addition to other Awards granted under the Plan and shall be evidenced by an
award agreement. The Administrator shall determine the Eligible Recipients to
whom, and the time or times at which, Restricted Stock awards shall be made; the
number of shares to be awarded; the price, if any, to be paid by the Participant
for the acquisition of Restricted Stock; the


                                       11




Restricted Period (as defined in Section 9 (c)) applicable to Restricted Stock
awards; and all other conditions applicable to Restricted Stock awards. The
provisions of the awards of Restricted Stock need not be the same with respect
to each Participant.

                 (a) Purchase Price. The price per share, if any, that a
Participant must pay for shares purchasable under an award of Restricted Stock
shall be determined by the Administrator in its sole discretion at the time of
grant.

                 (b) Awards and Certificates. The prospective recipient of a
Restricted Stock award shall not have any rights with respect to any such Award,
unless and until such recipient has executed an award agreement evidencing the
Award and delivered a fully executed copy thereof to the Company, within such
period as the Administrator may specify after the award date. Each Participant
who is granted an award of Restricted Stock shall be issued a stock certificate
in respect of such shares of Restricted Stock, which certificate shall be
registered in the name of the Participant and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to any such
Award; provided that the Company may require that the stock certificates
evidencing Restricted Stock granted hereunder be held in the custody of the
Company until the restrictions thereon shall have lapsed, and that, as a
condition of any Restricted Stock award, the Participant shall have delivered a
stock power, endorsed in blank, relating to the shares covered by such Award.

                 (c) Nontransferability. The Restricted Stock awards granted
pursuant to this Section 9 shall be subject to the restrictions on
transferability set forth in this paragraph (c). During such period as may be
set by the Administrator in the award agreement (the "Restricted Period"), the
Participant shall not be permitted to sell, transfer, pledge, hypothecate or
assign shares of Restricted Stock awarded under the Plan except by will or the
laws of descent and distribution; provided that the Administrator may, in its
sole discretion, provide for the lapse of such restrictions in installments and
may accelerate or waive such restrictions in whole or in part based on such
factors and such circumstances as the Administrator may determine in its sole
discretion. The Administrator may also impose such other restrictions and
conditions, including the achievement of pre-established corporate performance
goals, on awarded Restricted Stock as it deems appropriate. Any attempt to
dispose of any Restricted Shares in contravention of any such restrictions shall
be null and void and without effect.

                 (d) Rights as a Stockholder. Except as provided in Section 9(b)
or as otherwise provided in an award agreement, the Participant shall possess
all incidents of ownership with respect to shares of Restricted Stock during the
Restricted Period, including the right to receive dividends with respect to such
shares and to vote such shares. Certificates for unrestricted Shares shall be
delivered to the Participant promptly after, and only after, the Restricted
Period shall expire without forfeiture in respect of such awards of Restricted
Stock except as the Administrator, in its sole discretion, shall otherwise
determine.

                 (e) Termination of Employment. In the event that a Participant
ceases to be employed by or to provide services to any of the Company, any
Parent or any

                                       12




Subsidiary during the Restricted Period, any rights pursuant to
any Award of Restricted Stock previously granted to such Participant shall be
subject to such terms and conditions as set forth in the award agreement
governing such Awards. Unless otherwise provided in the award agreement, the
Restricted Stock awards granted to such Participant, to the extent that
restrictions have not lapsed or applicable conditions have not been met at the
time of such cessation of employment or provision of services, shall expire on
the date of such termination.

SECTION 10.       AUTOMATIC GRANTS OF STOCK TO NON-EMPLOYEE DIRECTORS AND THE
NON-EMPLOYEE CHAIRMAN.

                  The Company shall grant awards of Stock, Restricted Stock and
Other Awards to Non-Employee Directors and the Non-Employee Chairman as
described in further detail below (the "Automatic Non-Employee Director
Awards"). Such grants shall be automatic and non-discretionary and otherwise
subject to the terms and conditions set forth in this Section 10 and in the
award agreement evidencing such grant, as well as the terms of the Plan.
Notwithstanding anything herein to the contrary, subject to such procedures,
terms and conditions established by the Administrator from time to time, a
recipient of an Automatic Non-Employee Director Award may elect, in lieu of
Stock or Restricted Stock under this Section 10, to receive an Other Award under
Section 11 that has an equivalent economic value, as determined by the
Administrator in its sole discretion, to the foregone Stock or Restricted Stock.

                  Each recipient of an Automatic Non-Employee Director Award
shall enter into an award agreement with the Company. The award agreement shall
set forth such terms and conditions, not inconsistent the provisions of this
Section 10, with respect to such automatic grant as the Administrator may
determine.

                 (a) Initial Grant.

                     (i) Each Non-Employee Director shall automatically be
granted an award of Restricted Stock having a value as of the date of grant
equal to approximately $50,000. Each such award shall be granted (i) to each
Person who is a Non-Employee Director as of the date of filing of the
registration statement that includes the final prospectus containing the Initial
Offering Price, on such filing date, with the calculation of the number of
shares of Restricted Stock so awarded to be computed by dividing $50,000 by the
Initial Offering Price, rounding down to the nearest whole number or (ii) to
each Person who is not a Non-Employee Director as of the date of filing of the
registration statement that includes the final prospectus containing the Initial
Offering Price, the date of the first Board meeting attended by such
Non-Employee Director, with the calculation of the number of shares of
Restricted Stock so awarded to be computed by dividing $50,000 by the Fair
Market Value of the Stock on the date of grant and rounding down to the nearest
whole number. Restrictions with respect to one-third of each such award shall
lapse as of each of the first three successive anniversaries of the date of the
grant, provided, however, that each


                                       13



such Person is then a Non-Employee Director of the Company. No fractional shares
of Restricted Stock shall be included in such Award.

                     (ii) The Non-Employee Chairman shall automatically be
granted an award of Restricted Stock having a value as of the date of grant
equal to approximately $100,000. Such award shall be granted the Person who is
the Non-Employee Chairman as of the date of filing of the registration statement
that includes the final prospectus containing the Initial Offering Price, on
such filing date, with the calculation of the number of shares of Restricted
Stock so awarded to be computed by dividing $100,000 by the Initial Offering
Price, rounding down to the nearest whole number. Restrictions with respect to
one-third of each such award shall lapse as of each of the first three
successive anniversaries of the date of the grant, provided, however, that the
Person is then the Non-Employee Chairman. No fractional shares of Restricted
Stock shall be included in such Award.

                 (b) Annual Grant.

                     (i) On the first business day after the first annual
stockholders' meeting of the Company following the Effective Date, and on the
first business day after each such annual meeting of the Company thereafter
during the term of the Plan, each Non-Employee Director shall automatically be
granted an award of Stock having a value equal to approximately $25,000 as of
the date of the grant, provided, however, that each such Person is then a
Non-Employee Director of the Company. The number of shares of Stock so awarded
shall be computed by dividing $25,000 by the Fair Market Value of the Stock on
the date of grant and rounding down to the nearest whole number. No fractional
shares of Stock shall be included in such Award.

                     (ii) On the first business day after the first annual
stockholders' meeting of the Company following the Effective Date, and on the
first business day after each such annual meeting of the Company thereafter
during the term of the Plan, the Non-Employee Chairman shall automatically be
granted an award of Stock having a value equal to approximately $35,000 as of
the date of the grant, provided, however, that the Person is then the
Non-Employee Chairman. The number of shares of Stock so awarded shall be
computed by dividing $35,000 by the Fair Market Value of the Stock on the date
of grant and rounding down to the nearest whole number. No fractional shares of
Stock shall be included in such Award.

                 (c) Stock Availability. Notwithstanding any of the foregoing,
in the event that the number of shares of Stock available for grant under the
Plan is not sufficient to accommodate the Automatic Non-Employee Director
Awards, then the remaining shares of Stock available for such automatic awards
shall be granted to each Non-Employee Director on the one hand and the
Non-Employee Chairman on the other hand, each of whom is to receive such an
award, on a pro-rata basis. No further grants shall be made until such time, if
any, as additional shares of Stock become available for



                                       14




grant under the Plan through action of the Board or the stockholders of the
Company to increase the number of shares of Stock that may be issued under the
Plan or through cancellation or expiration of Awards previously granted
hereunder.

SECTION 11.       OTHER AWARDS.

                 (a) Nature of Other Awards. Other forms of Awards ("Other
Awards") that may be granted under the Plan include Awards that are valued in
whole or in part by reference to, or are otherwise calculated by reference to or
based on, shares of Stock, including without limitation, (i) Units, (ii)
convertible preferred stock, convertible debentures and other convertible,
exchangeable or redeemable securities or equity interests (including Units),
(iii) membership interests in a Subsidiary or operating partnership and (iv)
Awards valued by reference to book value, fair value or performance parameters
relative to the Company or any Subsidiary or group of Subsidiaries. For purposes
of calculating the number of shares of Stock underlying an Other Award relative
to the total number of shares of Stock reserved and available for issuance under
Section 3(a), the Administrator shall establish in good faith the maximum number
of shares of Stock to which a grantee of such Other Award may be entitled upon
fulfillment of all applicable conditions set forth in the relevant Award
documentation, including vesting, accretion factors, conversion ratios, exchange
ratios and the like. If and when any such conditions are no longer capable of
being met, in whole or in part, the number of shares of Stock underlying such
Other Award shall be reduced accordingly by the Administrator and the related
shares of Stock shall be added back to the shares of Stock available for
issuance under the Plan. Other Awards may be issued either alone or in addition
to other Awards granted under the Plan and shall be evidenced by an Award
agreement. The Administrator shall determine the Eligible Recipients to whom,
and the time or times at which, Other Awards shall be made; the number of shares
of Stock or Units to be awarded; the price, if any, to be paid by the
Participant for the acquisition of Other Awards; and the restrictions and
conditions applicable to Other Awards. Conditions may be based on continuing
employment (or other service relationship), computation of financial metrics
and/or achievement of pre-established performance goals and objectives. The
Administrator may require that Other Awards be held through a limited
partnership, or similar "look-through" entity, and the Administrator may require
such limited partnership or similar entity to impose restrictions on its
partners or other beneficial owners that are not inconsistent with the
provisions of this Section 11. The provisions of the grant of Other Awards need
not be the same with respect to each Participant.

                 (b) Rights as Stockholder. Until such time as an Other Award is
actually converted into, exchanged for, or paid out in shares of Stock, a
Participant shall have no rights as a holder of stock.

                 (c) Non-Transferability. Except as otherwise provided by the
Administrator, Other Awards may not be sold, transferred, pledged, hypothecated
or assigned except by will or the laws of descent and distribution.

                                       15


                 (d) Termination of Employment or Service. In the event that a
Participant ceases to be employed by or to provide services to the Company, any
Parent, or any Subsidiary, any outstanding Other Awards previously granted to
such Participant shall be subject to such terms and conditions as set forth in
the Award agreement governing such Other Awards. Except as may otherwise be
provided by the Administrator either in the Award agreement, or, subject to
Section 12 below, in writing after the Award agreement is issued, a
Participant's rights in all Other Awards that have not vested shall
automatically terminate upon the Participant's termination of employment (or
cessation of service relationship) with the Company, its Parents and its
Subsidiaries for any reason.

SECTION 12.       AMENDMENT AND TERMINATION.

                  The Board may amend, alter or discontinue the Plan in whole or
in part, at any time, but no amendment, alteration, or discontinuation that
would impair the rights of a Participant under any Award theretofore granted
shall be made without such Participant's consent. Unless the Board determines
otherwise, the Board shall obtain approval of the Company's stockholders for any
amendment that would require such approval in order to satisfy Sections 162(m)
and 422 of the Code, stock exchange rules or other applicable law or regulation.
The Administrator may amend the terms of any award theretofore granted,
prospectively or retroactively, but, subject to Sections 5 of the Plan, no such
amendment shall impair the rights of any Participant without his or her consent.

SECTION 13.       UNFUNDED STATUS OF PLAN.

                  The Plan is intended to constitute an "unfunded" plan for
incentive compensation. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company.

SECTION 14.       GENERAL PROVISIONS.

                 (a) Securities Laws Compliance. Shares of Stock shall not be
issued pursuant to the exercise or settlement of any Award granted hereunder
unless the exercise or settlement of such Award and the issuance and delivery of
such shares of Stock pursuant thereto shall comply with all relevant provisions
of law, including, without limitation, the Securities Act of 1933, as amended
(the "Securities Act"), the Exchange Act and the requirements of any stock
exchange upon which the Stock may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.

                 (b) Certificate Legends. The Administrator may require each
person acquiring shares of Stock hereunder to represent to and agree with the
Company in writing that such person is acquiring the shares of Stock without a
view to distribution thereof. The certificates for such shares of Stock may
include any legend which the Administrator deems appropriate to reflect any
restrictions on transfer.


                                       16


                  All certificates for shares of Stock delivered under the Plan
shall be subject to such stock-transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed, and any applicable federal or state securities
law, and the Administrator may cause a legend or legends to be placed on any
such certificates to make appropriate reference to such restrictions.

                 (c) Company Actions; No Right to Employment. Nothing contained
in the Plan shall prevent the Board from adopting other or additional
compensation arrangements, subject to stockholder approval, if such approval is
necessary and desirable; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan shall
not confer upon any Eligible Recipient any right to continued employment or
service with the Company or any Parent or Subsidiary, as the case may be, nor
shall it interfere in any way with the right of the Company or any Parent or
Subsidiary to terminate the employment or service of any of its Eligible
Recipients at any time.

                 (d) Payment of Taxes. Each Participant shall, no later than the
date as of which the value of an Award first becomes includible in the gross
income of the Participant for Federal income tax purposes, pay to the Company,
or make arrangements satisfactory to the Administrator regarding payment of, any
federal, state, or local taxes of any kind required by law to be withheld with
respect to such Award. The obligations of the Company under the Plan shall be
conditional on the making of such payments or arrangements, and the Company
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Participant.

SECTION 15.       EFFECTIVE DATE OF PLAN.

                  The Plan was adopted by the Board on __________, 2004 and
shareholder approval was obtained on _____________, 2004. The Plan shall be
effective as of the effective date of the registration statement filed by the
Company pursuant to the Securities Act in connection with its initial public
offering (the "Effective Date").

SECTION 16.       TERM OF PLAN.

                  No Award shall be granted pursuant to the Plan on or after the
[tenth] anniversary of the Effective Date, but Awards theretofore granted may
extend beyond that date.

SECTION 17.       GOVERNING LAW.

                  The Plan and all determination made and actions taken pursuant
hereto shall be governed by the laws of the State of New York, without giving
effect to the conflict of laws principles thereof.