NONCOMPETITION AGREEMENT
By signing below, I, Janice G. Davidson
(sometimes referred to hereinafter as the "Executive"),
agree to the terms and conditions set forth in this
agreement (the "Agreement") between me and CUC
International Inc. (the "Company"). I am entering into
this Agreement (a) in connection with, and as additional
consideration for, the Company's acquisition, on the date
hereof (the "Acquisition"), of all of the outstanding
capital stock of Davidson & Associates, Inc. ("Davidson")
pursuant to an Agreement and Plan of Merger, dated as of
February 19, 1996 (the "Merger Agreement") and (b) in
accordance with the terms and conditions of Section 4.17
of the Merger Agreement. Immediately prior to the
Acquisition, I was President of Davidson and beneficially
owned 16,000,325 shares of Davidson common stock.
1. Confidentiality. The Executive acknowledges that
all secret, non-public, or proprietary information
pertaining to the affairs, business, results of
operations, accounting methods, practices and procedures,
acquisition candidates, financial condition, clients,
customers or other relationships of Davidson or any of its
subsidiaries (as defined in the Merger Agreement) that he
possesses on the date hereof and may come to possess
hereafter ("Informa tion") is confidential and is a unique
and valuable asset of the Company and its affiliates. The
Executive will not, except to the extent reasonably
necessary in performance of his duties under his
employment agreement with the Company, give any person,
firm, association, corporation or govern mental agency any
Information, except as may be required by law. The
Executive will not make use of the Information for his own
purposes or for the benefit of any person or organi
zation. The Executive will also use his best efforts to
prevent the disclosure of the Information by others.
2. Restricted Activities
(a) For the period commencing on the date
hereof and ending on the fifth anniversary of the date
hereof (the "Restricted Period"), the Executive, without
prior express written approval by the Board of Directors
of the Company (the "Board of Directors"), will not engage
in competition, or directly or indirectly own or hold a
proprietary interest in or be employed by, or consult with
or receive compensa tion from, any party which competes,
in any way or manner with the business of Davidson or any
of its subsidiaries, as such business or businesses may be
conducted from time to time. The Executive acknowledges
that Davidson's and its subsidiaries' businesses are
conducted nationally and internationally and agrees that
the provisions in the fore going sentence shall operate
throughout the United States and the World.
(b) During the Restricted Period, the
Executive, without express prior written approval from the
Board of Directors, will not solicit any clients of
Davidson or any of its subsidiaries for any business of
Davidson or any of its subsidiaries or discuss with any
employee of the Company or any of its affiliates
information or operation of any business intended to
compete with the Company or any of its affiliates.
(c) During the Restricted Period, the
Executive will not solicit or induce any person who is an
employee of Davidson or any of its subsidiaries to
terminate any relationship such person may have with
Davidson or any of its subsidiaries, nor shall the
Executive during such period directly or indirectly
engage, employ or compensate, or cause or permit any
person with which the Executive may be affiliated, to
engage, employ or compensate, any employee of the Company
or any of its affiliates. The Executive hereby represents
and warrants that the Executive has not entered into any
agreement, understanding or arrangement with any employee
of the Company or any of its affiliates pertaining to any
business in which the Executive has participated or plans
to participate, or to the employment, engagement or
compensation of any such employee.
(d) For the purposes of this Agreement,
proprietary interest means legal or equitable ownership,
whether through stock holding or otherwise, of an equity
interest in a business, firm or entity of ownership or
more than 5% (or such greater percentage as may be
approved by the Company) of any class of equity interest
in a publicly-held company and the term "affiliate", when
used in respect of the Company, shall include, without
limitation, all subsidiaries of the Company, including
Davidson and its subsidiaries, and all licensees of the
Company.
(e) The Executive hereby acknowledges that
damages at law may be an insufficient remedy to the
Company if the Executive violates the terms of this
Agreement and that the Company shall be entitled to
preliminary and/or permanent injunctive relief in any
court of competent jurisdiction to restrain the breach of
or otherwise to specifically enforce any of the covenants
contained in this Agreement without the necessity of
showing any actual damage or that monetary damages would
not provide an adequate remedy. Such right to an
injunction shall be in addition to, and not in limitation
of, any other rights or remedies the Company may have.
Without limiting the generality of the foregoing, neither
party shall oppose any motion the other party may make for
any expedited discovery of hearing in connection with any
alleged breach of this Agreement.
(f) The period of time during which the
provisions of this Agreement shall be in effect shall be extended
by the length of time during which the Executive is in breach of
the terms hereof as determined by any court of competent
jurisdiction on the Company's application for injunctive
relief.
(g) The Executive agrees that the restrictions
contained in this Agreement are material to the Company and,
but for the Executive's agreement to comply with such re
strictions, the Company would not have entered into the Merger
Agreement.
3. Governing Law; Construction. This Agreement has
been executed and delivered in the State of Connecticut and
its validity, interpretation, performance and enforcement shall
be governed by the internal laws of that state. The
construction and interpretation of this Agreement shall not be
strictly construed against the drafter.
4. Arbitration. (a) Any controversy, dispute or
claim arising out of or relating to this Agreement or the
breach hereof which cannot be settled by mutual agreement (other than
with respect to the matters for which the Compa ny may, but shall not
be required to, seek injunctive re lief) shall be finally settled by
binding arbitration in accordance with the Federal Arbitration Act (or
if not ap plicable, the applicable state arbitration law) as follows:
Any party who is aggrieved shall deliver a notice to the other party
setting forth the specific points in dispute. Any points remaining in
dispute twenty (20) days after the giving of such notice may be
submitted to arbitration in New York, New York, or Los Angeles,
California, whichever the complaining party may choose, to
Jams/Endispute, before a single arbitrator appointed in accordance
with the arbitra tion rules of Jams/Endispute, modified only as herein
ex pressly provided. After the aforesaid twenty (20) days, either
party, upon ten (10) days notice to the other, may so submit the
points in dispute to arbitration. The arbitrator may enter a default
decision against any party who fails to participate in the arbitration
proceedings.
(a) The decision of the arbitrator on the points in
dispute will be final, unappealable and binding, and
judgment on the award may be entered in any court having
jurisdiction thereof.
(b) Except as otherwise provided in this Agreement,
the arbitrator will be authorized to apportion its fees and
expenses and the reasonable attorney's fees and expenses of any such
party as the arbitrator deems appropriate. In the absence of any
such apportionment, the fees and expenses of the arbitrator will be
borne equally by each party, and each party will bear the fees and
expenses of its own attorney.
(c) The parties agree that this Section 4 has been
included to rapidly and inexpensively resolve any disputes
between them with respect to this Agreement, and that this
Section shall be grounds for dismissal of any court action
commenced by either party with respect to this Agreement, other
than with respect to matters for which the Company has sought
injunctive relief, and post-arbitration actions seeking to
enforce an arbitration award.
(d) The parties shall keep confidential, and shall
not disclose to any person, except as may be required by law,
the existence of any controversy hereunder, the referral of any
such controversy to arbitration or the status or resolution
thereof.
5. Separability. All provisions of this Agreement
are intended to be severable. In the event any provision or
restriction contained herein is held to be invalid or
unenforceable in any respect, in whole or in part, such
finding shall in no way affect the validity or enforce ability of
any other provision of this Agreement. The par ties hereto
further agree that any such invalid or un enforceable provision
shall be deemed modified so that it shall be enforced to the
greatest extent permissible under law, and to the extent that any
court of competent jurisdic tion determines any restriction herein
to be unreasonable in any respect, such court may limit this
Agreement to render it reasonable in the light of the
circumstances in which it was entered into and specifically
enforce this Agreement as limited.
6. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and
shall be given (and shall be deemed to have been duly
received if so given) by hand delivery, telegram, telex or
telecopy, or by mail (registered or certified mail,
postage prepaid, return receipt requested) or by any
courier service, such as Federal Express, providing proof
of delivery. All communications hereunder shall be
delivered to the respective parties at the following
addresses:
If to the Executive:Janice G. Davidson
c/o Davidson & Associates, Inc.
19840 Pioneer Avenue
Torrance, California 90503
Telephone: (310) 793-0600
Facsimile: (310) 793-0601
with a copy to: Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California
90071-3197 Telephone: (213) 229-
7000 Facsimile: (213) 229-7520
Attention: Peter F. Ziegler,
Esq.
If to the Company: CUC International Inc.
707 Summer Street
Stamford, Connecticut 06901
Telephone: (203) 324-9261
Facsimile: (203) 348-1982
Attention: Amy N.Lipton,Esq.
with a copy to: Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
Attention: Howard Chatzinoff, Esq.
or to such other address as the person to whom notice is given
may have previously furnished to the others in writing in the
manner set forth above.
7. No Waiver. The failure of any party hereto to
exercise any right, power or remedy provided under this
Agreement or otherwise available in respect hereof at law or
in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof,
shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to
demand such compliance.
8. Assignability and Binding Effect. This
Agreement shall be binding upon and inure to the benefit
of the parties and their respective successors. The
obligations of the parties hereto may not be delegated,
and any attempted delegation shall be null and void and
without effect.
IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the 24th day of July, 1996.
CUC INTERNATIONAL INC.
By:__________________________
Name: E. Kirk Shelton
Title: President
JANICE G. DAVIDSON