AS AMENDED THROUGH SEPTEMBER 10, 19961
1990 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
One Million One Hundred Thirty-Nine Thousand Sixty-Two
(1,139,062) shares of Common Stock, $.01 par value per
share, of the Company ("Common Stock"). Each individual who
on August 23, 1990 was a director (but not an employee) of
the Company was granted on such date options with respect to
seventy-five thousand nine hundred thirty-seven (75,937)
shares of Common Stock. Each individual who after August
23, 1990 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 seventy-
five thousand nine hundred thirty-seven (75,937) 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 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") consisting of not less than
two 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 "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. With respect to persons subject to Section 16
of the 34 Act, the Company reserves the right to defer
distribution of share certificates issuable upon exercise of
an option by such person until at least six 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 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, 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.
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 34 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 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 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 23, 1990. No
options may be granted under the Plan after August 23, 2000.
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.
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.
_______________________________
1 Gives effect to October 21, 1996 stock split.