AMENDED THROUGH JUNE 5, 1996
1994 DIRECTORS STOCK OPTION PLAN
OF
CUC INTERNATIONAL INC.
1. PURPOSES OF THE PLAN. The 1994 Directors Stock Option Plan
(the "Plan") is designed to attract, retain and provide an
incentive to directors of CUC International Inc., a
Delaware corporation (the "Company"), who are not
employees of the Company, by providing them with an
ownership interest in the Company.
2. STOCK SUBJECT TO THE PLAN. Options may be granted as
provided herein to purchase in the aggregate not more than
Two Hundred Twenty-Five Thousand (225,000) shares of
Common Stock, $.01 par value per share, of the Company
("Common Stock"). Options to purchase seven thousand five
hundred (7,500) shares of Common Stock (as adjusted to
reflect a three-for-two stock split which occurred June
30, 1995 and as it may be adjusted pursuant to Section 10
hereof) shall be automatically granted on November 23 (or
the first succeeding business day thereafter on which the
Common Stock is traded on the principal securities
exchange on which it is listed) of each of 1994, 1995,
1996 and 1997 to each individual who is a director (but
not an employee) of the Company on such date. In the
event of the expiration of the term of the membership on
the Board of Directors of the Company ("Board of
Directors") of any individual who is a director (but not
an employee) of the Company, because of such individual's
physical or mental disability or death, such individual
(or his executor, administrator or other person at the
time entitled by law thereto) shall automatically be
granted, as of the date of the expiration of such
individual's term on the Board of Directors all of the
options under this Plan which such individual would have
been entitled to receive during the remainder of his then
current term on the Board of Directors with the exercise
thereof subject to the provisions of Paragraph 7(c)
hereof. The Common Stock that may be purchased pursuant to
options under this Plan by any one individual shall not
exceed thirty thousand (30,000) shares of Common Stock (as
adjusted to reflect a three-for-two stock split which
occurred June 30, 1995 and as it may be adjusted pursuant
to Section 10 hereof).
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"). Subject to the provision of
Paragraph 11 hereof, 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") appointed by the Board of
Directors consisting of not less than three (3) members of
the Board of Directors who are not employees of the
Company and who are "disinterested persons" as defined in
Rule 16b-3 under the Securities Exchange Act of 1934 (the
"Exchange Act"). A majority of the members of the
Committee shall constitute a quorum, and the acts of a
majority of the members of the Committee present at any
meeting at which a quorum is present, and any acts
approved in writing by all members of the Committee
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. The
Chief Executive Officer and the President of the Company
shall be authorized to implement the Plan in accordance
with its terms.
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 the 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 Common 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 of Common Stock 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 (as described in
Paragraph 9 hereof) 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 or FICA taxes
incurred by reason of the grant or exercise of an option.
Certificates representing the shares of Common Stock
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
Exchange Act, any Rules or Regulations of the Securities
and Exchange Commission promulgated under either of 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 to 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 of Common Stock 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 of Common Stock 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 of Common Stock be purchased or
issued under the Plan. An optionee receiving options to
purchase Common Stock under the Plan shall not be able to sell the
Common Stock underlying such options until at least six (6) months have
elapsed from the date such options were granted to such
optionee.
7. TERMINATION OF DIRECTOR'S TERM. Unless otherwise determined
by the Committee, options shall be exercisable following
termination of an optionee's term as a director or
director emeritus only as indicated below:
(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 the
earlier to occur of the expiration of one month after
the expiration of such optionee's term or the stated
expiration date of such options, 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 earlier to occur of the expiration of five
years after the expiration of such optionee's term or
the stated expiration date of such options, 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 remain exercisable by his executor,
administrator or other person at the time entitled by
law to his rights under the option until the earlier
to occur of the expiration of one year after the
expiration of such optionee's term or the stated
expiration date of such options, 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, each individual who is a director
(but not an employee) of the Company on the effective date
of such change of control shall automatically be granted,
as of such date, all of the options under the Plan which
such individual would have been entitled to receive if
such individual were a non-employee director on November
23 of each remaining year in which the Plan provides that
grants are to be made. 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 Exchange 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
Exchange 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 Exchange 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 Common 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 November 23, 1994.
No options may be granted under the Plan after the third
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, (c) materially change the eligibility requirements
for individuals entitled to receive options hereunder, or
(d) materially change the method for determination of the
purchase price to be paid for shares of Common Stock upon
the exercise of options granted hereunder; and, provided,
further, that the Plan may not be amended more than once
every six (6) months, other than to comport with changes
in the Code, the Employee Retirement Income Security Act
of 1974, as amended, or the rules promulgated thereunder.
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 Exchange 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. In the
event such approval is not obtained, any options granted
hereunder shall be null and void.
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 Exchange 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.