AMENDED THROUGH SEPTEMBER 10, 19961
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
Three Hundred Thirty-Seven Thousand Five Hundred (337,500)
shares of Common Stock, $.01 par value per share, of the
Company ("Common Stock"). Options to purchase eleven
thousand two hundred fifty (11,250) shares of Common Stock
(as adjusted through October 21, 1996 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 forty-
five thousand (45,000) shares of Common Stock (as adjusted
through October 21, 1996 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 canceled 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 two (2) members of the
Board of Directors, each of whom shall be a Non-Employee
Director of the Company within the meaning of Rule 16b-3 or
its successors 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 Company
reserves the right to defer distribution of share
certificates issuable upon exercise of an option by an
optionee until at least six (6) months have elapsed from the
date of grant of the option. 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 may 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. 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. TRANSFERABILITY OF OPTIONS. Options granted under the Plan
shall be transferable by the optionee only pursuant to the
following methods: by will or the laws of descent and
distribution; pursuant to a domestic relations order, as
defined in the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder; or as a gift
to family members of the optionee, trusts for the benefit of
family members of the optionee or charities or other not-for-
profit organizations. Except to the extent provided in this
Paragraph and Paragraph 7(c), options may not be assigned,
transferred, pledged, hypothecated or disposed of in any way
(whether by operation of law or otherwise), shall not be
subject to execution, attachment or similar process, and may
be exercised during the lifetime of the holder thereof only
by such holder.
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.
_______________________________
1 Gives effect to October 21, 1996 stock split.