FORM OF STOCK OPTION CONTRACT -
1994 DIRECTORS STOCK OPTION PLAN
Dear (name):
I am pleased to advise you that the Committee (the "Committee")
of the Board of Directors of CUC International Inc. (the
"Corporation") which administers the Corporation's 1994 Directors
Stock Option Plan (the "Plan") on November __, 199_ authorized
the granting to you under the Plan of a non-statutory option to
purchase 7,500 shares of common stock, $.01 par value, of the
Corporation (the "Common Stock") at a price of $____________ per
share (the "Exercise Price"), which the Committee believes to be
the fair market value of the Common Stock on that date.
Terms not defined herein shall have the meaning set forth in the
Plan.
1. Your option may be exercised under the following terms:
(a) This option shall not be transferable except by
will or the laws of descent and distribution, unless
such transfer is permitted by Rule 16b-3 under the
Securities Exchange Act of 1934 and the Committee has
approved such transferability.
(b) Subject to the provisions of paragraphs (e)
through (i) hereof, this option may be exercisable by
you as follows:
You may purchase some or all of the Common Stock for
which options are herein granted on or after the date
hereof.
Your right to exercise this option shall be cumulative.
This option shall expire on the tenth anniversary of
the date hereof.
(c) If required by the Corporation, prior to the
delivery to you of a certificate or certificates
representing the shares of Common Stock purchased by
you upon the exercise of the option, you shall have
deposited with the Corporation a non-disposition letter
(restricting disposition by you of the shares of Common
Stock) in form satisfactory to counsel for the
Corporation. In no case may you sell the Common Stock
purchased by you upon the exercise of this option until
at least six months after the date hereof. You
acknowledge that, unless the shares of Common Stock
received upon exercise of this option shall have been
registered under an effective registration statement
under the Securities Act of 1933, as amended, such
shares will be acquired for investment and not with a
view to distribution thereof, and that such shares may
not be sold except in compliance with the applicable
provisions of such Act.
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(d) In the event of a stock split, stock dividend,
recapitalization, reorganization, merger,
consolidation, extraordinary dividend, split-up, spin-
off, combination, stock repurchase, exchange of shares,
warrants or rights offering to purchase stock at a
price substantially below fair market value or other
similar corporate event affecting the Common Stock, the
number and kind of shares subject to this option and
the Exercise Price shall be equitably adjusted
(including by payment of cash to you) in the
discretion of the Committee, as defined in the Plan, in
order to preserve the benefits or potential benefits
intended to be made available to you under this option.
The determination of the Committee as to what
adjustments shall be made, and the extent thereof,
shall be final. Unless otherwise determined by the
Committee, such adjustments shall be subject to the
same vesting schedule and restrictions to which this
option is subject. No fractional shares of Common
Stock shall be reserved or authorized or made subject
to this option by any such adjustment.
(e) In the event that the term of your membership on
the Board of Directors expires because you (i) lose an
election for a position on the Board of Directors, (ii)
resign from the Board of Directors prior to attaining
age 65 or (iii) fail to seek election to the Board of
Directors for a term commencing prior to your attaining
age 62 (in any case, other than on account of death or
physical or mental disability), this option shall
remain exercisable until the earlier to occur of the
expiration of one month after the expiration of your
term or the stated expiration date of this option, at
which time this option shall expire.
(f) In the event that the term of your membership on
the Board of Directors expires because you (i) resign
after age 65 or (ii) fail to seek election to the Board
of Directors for a term commencing after you attain age
62, this option shall remain exercisable until the
earlier to occur of the expiration of five years after
the expiration of your term or the stated expiration
date of this option, at which time this option shall
expire.
(g) In the event that the term of your membership on
the Board of Directors expires because you become
physically or mentally disabled (unless such expiration
is described in paragraph (f) above) or you die, the
options granted to you under this letter shall remain
exercisable until the earlier to occur of the
expiration of one year after the expiration of your
term or the stated expiration date of such option, at
which time such options shall expire.
(h) In the event that you are removed from the Board
of Directors by the shareholders of the Corporation or
by the Board of Directors, options granted to you shall
expire immediately upon such removal or
disqualification.
(3)
(i) In the event you are appointed a "director
emeritus" by the Board of Directors, and you cease to
be a director emeritus because of physical or mental
disability or death, the provisions of paragraph 1(g)
shall apply; if you cease to be a director emeritus
because of removal by the Board of Directors, the
provisions of paragraph 1(h) shall apply; and if you
cease to be a director emeritus for any other reason,
the provisions of paragraph 1(f) shall apply.
2. You may pay for shares purchased pursuant hereto as follows:
(a) You may pay the Exercise Price per share in cash
or by certified check at the time of exercise;
(b) Provided that at the time of exercise Common Stock
is publicly traded and quoted regularly in the Wall
Street Journal, you may pay for the shares by delivery
of already-owned shares of Common Stock owned by you
free and clear of any liens, claims, encumbrances or
security interests, which Common Stock shall be valued
(a) if listed on a national securities exchange, at the
average closing price for the ten (10) trading days
immediately preceding the date of exercise or (b)
otherwise at the average of the closing bid and ask
quotations published in the Wall Street Journal for the
ten (10) trading days immediately preceding the date of
exercise; or
(c) You may pay for the shares by any combination of
the methods set forth in (a) and (b) above.
When you wish to exercise your stock option in whole or in part,
please refer to the provisions of this letter and correspond in
writing with the Secretary of the Corporation. This is not an
incentive stock option under Section 422A of the Internal Revenue
Code of 1986, as amended.
Very truly yours,
E. Kirk Shelton
President and Chief Operating Officer