AMENDED THROUGH JUNE 5, 1996
1992 DIRECTORS STOCK OPTION PLAN
OF
CUC INTERNATIONAL INC.
1. PURPOSES OF THE PLAN. This stock option plan (the "Plan")
is designed to provide an incentive to directors of CUC
International Inc., a Delaware corporation (the "Company").
2. STOCK SUBJECT TO THE PLAN. Options may be granted as
provided herein to purchase in the aggregate not more than
Four Hundred Fifty Thousand (450,000) shares of Common
Stock, $.01 par value per share, of the Company ("Common
Stock"). Each individual who on August 28, 1992 was a
director (but not an employee) of the Company was granted on
such date options with respect to twenty thousand (20,000)
shares of Common Stock (which have been adjusted to forty-
five thousand (45,000) to reflect three-for-two stock splits
which occurred on April 30, 1993 and June 30, 1995). Each
individual who after August 28, 1992 becomes a director (but
not an employee) of the Company, on the date of his election
to the Board of Directors, shall be granted an option to
purchase forty-five thousand (45,000) shares of Common
Stock. Such shares may, in the discretion of the Committee,
consist either in whole or in part of authorized but
unissued shares of Common Stock or shares of Common Stock
held in the treasury of the Company. The Company shall at
all times during the term of the Plan reserve and keep
available such number of shares of Common Stock as will be
sufficient to satisfy the requirements of the Plan. Such
options shall be considered "non-qualified stock options,"
within the meaning of the Internal Revenue Code of 1986, as
amended (the "Code"). No director to whom any options are
granted hereunder shall be eligible to receive any
additional options under the Plan. Subject to the provision
of Paragraph 11, any shares subject to an option which for
any reason expires, is cancelled or is terminated
unexercised as to such shares shall again become available
for option under the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered
by a Committee (the "Committee") consisting of not less than
three members of the Board of Directors who are not
employees of the Company and who are "disinterested persons"
as defined in Rule 16b-3(d) under the Securities Exchange
Act of 1934 (the "34 Act"). A majority of the members shall
constitute a quorum, and the acts of a majority of the
members present at any meeting at which a quorum is present,
and any acts approved in writing by all members without a
meeting, shall be the acts of the Committee.
Subject to the express provisions of the Plan, the Committee
shall have the authority, in its sole discretion, to make
all determinations necessary or advisable for administering
the Plan; and, with the consent of the optionee, to modify
an option, provided such option as modified does not violate
the terms of the Plan. The determinations of the Committee
on the matters referred to in this Paragraph 3 shall be
conclusive.
No member of the Committee shall be liable for anything
whatsoever in connection with the administration of the Plan
except such member's own willful misconduct. Under no
circumstances shall any member of the Committee be liable
for any act or omission of any other member of the
Committee. In their performance of its functions with
respect to the Plan, the Committee shall be entitled to rely
upon information and advice furnished by the Company's
officers, the Company's accountants, the Company's counsel
and any other party the Committee deems necessary and no
member of the Committee shall be liable for any action taken
or not taken in reliance upon any such advice.
4. EXERCISE PRICE. The exercise price of the shares of Common
Stock under each option shall be 100% of the fair market
value of the Common Stock on the date of grant. The
determination of the Committee shall be conclusive in
determining the fair market value of the stock.
5. TERM OF OPTION. The term of each option granted pursuant to
the Plan shall be such term as is established by the
Committee, in its sole discretion, at the time such option
is granted. Options shall be subject to earlier termination
as hereinafter provided.
6. EXERCISE OF OPTION. An option or any part or installment
thereof shall be exercised by giving written notice to the
Company at its principal office (at present 707 Summer
Street, Stamford, Connecticut 06901), specifying the number
of shares as to which such option is being exercised and
accompanied by payment in full of the aggregate exercise
price therefor (or the amount due on exercise if the Stock
Option Contract permits installment payments) (i) in cash or
by certified check, (ii) with previously acquired shares of
Common Stock having an aggregate exercise price of all
options being exercised, or (iii) any combination thereof.
The Company shall have the right to deduct and withhold from
any cash otherwise payable to an optionee, or require that
an optionee make arrangements satisfactory to the Company
for payment of, such amounts as the Company shall determine
for the purpose of satisfying its liability to withhold
Federal, state or local income of FICA taxes incurred by
reason of the grant or exercise of an option.
Certificates representing the shares purchased shall be
issued as promptly as practicable, provided that the Company
may postpone issuing certificates for such shares for such
time as the Company, in its sole discretion, may deem
necessary or desirable in order to enable it to comply with
any requirements of the Securities Act of 1933, as amended
("Securities Act"), the 34 Act, any Rules or Regulations of
the Securities and Exchange Commission promulgated under
either the foregoing acts, the listing requirements of any
securities exchange on which the Company's Common Stock may
now or hereafter be listed, or any applicable laws of any
jurisdiction relating the authorization, issuance or sale of
securities. The holder of an option shall not have the
rights of a stockholder with respect to the shares covered
by his option until the date of issuance of a stock
certificate to him for such shares; provided, however, that
until such stock certificate is issued, any option holder
using previously acquired shares in payment of an option
exercise price shall have the rights of a shareholder with
respect to such previously acquired shares. In no case may
a fraction of a share be purchased or issued under the Plan.
7. TERMINATION OF DIRECTOR'S TERM.
(a) In the event that the term of an optionee's
membership on the Board of Directors expires because
the optionee (i) loses an election for a position on
the Board of Directors, (ii) resigns from the Board of
Directors prior to attaining age 65 or (iii) fails to
seek election to the Board of Directors for a term
commencing prior to his attainment of age 62 (in any
case, other than on account of death or physical or
mental disability), options granted to such optionee
shall remain exercisable until expiration of one month
after the expiration of such optionee's term, at which
time such options shall expire.
(b) In the event that the term of an optionee's
membership on the Board of Directors expires because of
the optionee's resignation after age 65 or failure to
seek election to the Board of Directors for a term
commencing after his attainment of age 62, options
granted to such optionee shall remain exercisable until
the expiration of five years after the expiration of
such optionee's term, at which time such options shall
expire.
(c) In the event that the term of an optionee's
membership on the Board of Directors expires because of
the optionee's physical or mental disability (unless
such expiration is described in subsection (b) hereof)
or death, options granted to such optionee shall become
immediately exercisable by his executor, administrator
or other person at the time entitled by law to his
rights under the option and shall remain exercisable
until the expiration of one year after the expiration
of such optionee's term, at which time such options
shall expire.
(d) In the event that an optionee is removed from the
Board of Directors by the shareholders of the Company
or by the Board of Directors, options granted to such
optionee shall expire immediately upon such removal or
disqualification.
(e) For the purposes of this Section 7 only, in the
case of an optionee who is appointed by the Board of
Directors as a "director emeritus" of the Company, the
"term" of such optionee's "membership on the Board of
Directors" shall not be deemed to terminate or expire
until such time as such optionee ceases for any reason
to be a director emeritus of the Company. If such
optionee ceases to be a director emeritus because of
physical or mental disability or death, the provisions
of Section 7(c) shall apply; if such optionee ceases to
be a director emeritus because of removal by the Board
of Directors, the provisions of Section 7(d) shall
apply; if such optionee ceases to be a director
emeritus for any other reason, the provisions of
Section 7(b) shall apply.
8. CHANGE IN CONTROL. In the event of a change in control, as
hereinafter defined, options granted under this Plan shall
become immediately exercisable, provided that such change in
control occurs after the initial vesting of an option grant.
A "change in control" shall be deemed to have occurred if
(i) a tender offer shall be made and consummated for the
ownership of 51% or more of the outstanding voting
securities of the Company, (ii) the Company shall be merged
or consolidated with another corporation and as a result of
such merger or consolidation less than 75% of the
outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the former
shareholders of the Company, other than affiliates (within
the meaning of the 1934 Act) of any party to such merger or
consolidation, as the same shall have existed immediately
prior to such merger or consolidation, (iii) the Company
shall sell substantially all of its assets to another
corporation which is not a wholly owned subsidiary, or (iv)
a person, within the meaning of Section 3(a)(9) or of
Section 13(d)(3) (as in effect on the date hereof) of the 34
Act, shall acquire 25% or more of the outstanding voting
securities of the Company (whether directly, indirectly,
beneficially or of record). For purposes hereof, ownership
of voting securities shall take into account and shall
include ownership as determined by applying the provisions
of Rule 13d-3(d)(1)(i) (as in effect on the date hereof)
pursuant to the 34 Act.
9. STOCK OPTION CONTRACTS. Each option shall be evidenced by
an appropriate Stock Option Contract, and shall contain such
terms and conditions not inconsistent herewith as may be
determined by the Committee, and which shall provide, among
other things that in the event of the exercise of such
option, unless the shares of Common Stock received upon such
exercise shall have been registered under an effective
registration statement under the Securities Act, 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 the
Securities Act.
10. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. The number and
kind of shares reserved for issuance hereunder may be
equitably adjusted, in the discretion of the Committee, 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 stock, in order to preserve the benefits intended to be
made available under the Plan. In the event of any of the
foregoing, the number and kind of shares subject to any
outstanding option granted pursuant to the Plan and the
exercise price of any such option shall be equitably
adjusted (including by payment of cash to the holder of such
option) in the discretion of the Committee in order to
preserve the benefits or potential benefits intended to be
made available to the holder of an option granted pursuant
to the Plan. 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 the underlying option is subject.
No fractional shares of Company stock shall be reserved or
authorized or made subject to any outstanding option by any
such adjustment.
11. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was
adopted by the Board of Directors on August 28, 1992. No
options may be granted under the Plan after the tenth
anniversary of that date. The Board of Directors, without
further approval of the Company's stockholders, may at any
time suspend or terminate the Plan, in whole or in part, or
amend it from time to time in such respects as it may deem
advisable; provided, however, that no amendment shall be
effective without the prior or subsequent approval of a
majority of the Company's outstanding stock entitled to vote
thereon which would (a) except as specified in Paragraph 10,
increase the maximum number of shares for which options may
be granted under the Plan, (b) otherwise materially increase
the benefits to participants under the Plan or (c)
materially change the eligibility requirements for
individuals entitled to receive options hereunder. No
termination, suspension or amendment of the Plan shall,
without the consent of the holder of an existing option
affected thereby, adversely affect his rights under such
option.
12. NON-TRANSFERABILITY OF OPTIONS. No option granted under the
Plan shall be transferable otherwise than by will or the
laws of descent and distribution, unless such transfer is
permitted by Rule 16b-3 under the 34 Act and the Committee
approves such transferability, and options may be exercised,
during the lifetime of the holder thereof, only by him.
Except to the extent provided in Paragraph 7(c), options may
not be assigned, transferred, pledged, hypothecated or
disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment
or similar process.
13. STOCKHOLDERS' APPROVAL. The Plan shall be subject to
approval by a majority of the Company's outstanding stock
entitled to vote thereon at the next annual or special
meeting of its stockholders to be held to consider such
approval and no options granted hereunder may be exercised
prior to such approval, provided that the date of grant of
any options granted hereunder shall be determined as if the
Plan had not been subject to such approval.
14. GOVERNING LAW. The Plan and all rights hereunder shall be
construed in accordance with and governed by the internal
laws of the State of Delaware.
15. COMPLIANCE WITH RULE 16b-3. All transactions under the Plan
are intended to comply with all applicable conditions of
Rule 16b-3 or its successors under the 34 Act, regardless of
whether such conditions are set forth in the Plan. To the
extent any provision of the Plan or action by the Committee
fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the
Committee.