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_ _ _ CUC INTERNATIONAL INC.
EXECUTIVE RETIREMENT PLAN
CUC International Inc., a Delaware corporation
(the "Company"), hereby adopts the CUC International Inc.
Executive Retirement Plan (the "Plan") effective as of
January 1, 1997.
1
PURPOSE AND DEFINITIONS
1.1 The purpose of the Plan is to afford officers and other
key employees of the Company, who will be responsible for
the management, growth, success and protection of the
Company's business, with a long-term incentive in order to
create in such employees an increased interest in and a
greater concern for the welfare of the Company and to reward
those officers and key employees who have been responsible
for the growth and success of the Company. The Plan is
intended to provide additional retirement security for the
participants under the Plan and to constitute an unfunded
retirement plan for a select group of management or highly
compensated employees within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, as amended.
1.2 For purposes of the Plan, the following terms shall
have the meaning set forth below:
"Accrued Target Value" means that portion of the Target
Value of a Participant described in Section 10.4.
"Actuarial Assumption" means, for purposes of the Plan,
an interest rate of 8% and the 1983 Group Annuity
Mortality Table (male) as published by the Society of
Actuaries, to be utilized to determine an Actuarial
Equivalent benefit to be provided by the Target Value.
"Actuarial Equivalent" means the use of Actuarial
Assumptions to achieve a value equal to the Target
Value or Adjusted Target Value, as the case may be.
"Adjusted Target Value" means the Target Value of a
Participant increased or decreased in value based upon
an assumed interest rate of 8%, to reflect the deferral
of the Commencement Date of a Participant as a result
of the continued employment of the Participant with the
Company or its Affiliates on or after the Retirement
Date of the Participant or to determine the equivalent
Target Value prior to the Participant's Retirement Date
as required under Articles 3 and 5.
"Affiliate" means a subsidiary or joint venture in
which the Company owns directly or indirectly fifty
percent (50%) or more of the equity interest (excluding
preferred stock).
"Beneficiary" means the beneficiary designated by the
Participant, or deemed designated by the Participant,
pursuant to Section 7.1.
"Change in Control" means a change in ownership of the
Company or any other action as described in Section
6.3.
"Commencement Date" means the first day of the month
following a Participant's Retirement Date, or if the
Participant is then employed by the Company or any of
its Affiliates, the first day of the month following
the Participant's termination of employment with the
Company and all of its Affiliates.
"Compensation Committee" means the Compensation
Committee of the board of directors of the Company.
"Employment Agreement" means an employment agreement
between the Company or an Affiliate and a Participant,
in effect at the time of any applicable determinations
under the Plan.
"Participant" means a key employee recommended by the
Chief Executive Officer of the Company and selected by
the Compensation Committee to participate in the Plan
pursuant to Section 2.1.
"Retirement Date" means the Retirement Date set by the
Compensation Committee at the time a key employee first
becomes a Participant under the Plan or any earlier
date subsequently set by the Compensation Committee.
"Target Value" means the target value of a
Participant's retirement benefit as determined by the
Compensation Committee at the date a key employee
becomes a Participant of the Plan, or as thereafter may
be increased by action of the Compensation Committee.
"Total Disability" means any permanent mental or physi
cal condition which (i) in the good faith judgment of
the Compensation Committee prevents the Participant
from reasonably discharging the duties of his or her
position, (ii) is attested to in writing from time to
time by a physician selected by the Compensation
Committee and (iii) has continued for a period of at
least twelve consecutive months.
"Year of Participation" shall mean a twelve-month
period of participation under the Plan during a period
of employment with the Company or its Affiliates or
while Totally Disabled.
"Year of Vesting Service" means a twelve-month period
of employment with the Company or any of its Affiliates
or a period of Total Disability as defined in Section
3.1.
2
ELIGIBILITY AND PARTICIPATION
2.1 Eligibility. The Chief Executive Officer of the
Company shall recommend to the Compensation Committee key
employees of the Company for participation in the Plan. The
Compensation Committee shall make a determination of each
such person who shall participate in the Plan and shall
notify such person of participation in writing. Each key
employee so designated by the Compensation Committee is
hereinafter referred to as a "Participant."
2.2 Designation of Vesting Requirement, Age for
Commencement of Payment of Benefits and Target Value. The
Compensation Committee shall determine for each Participant
at the time a key employee is selected as a Participant and
shall advise each Participant in writing the number of Years
of Service with the Company that shall be required to
achieve vesting of the benefit provided for the Participant
under the Plan, the age at which a Participant who is vested
may commence to receive benefits under the Plan (provided
the Participant has then terminated employment with the
Company) and the Target Value of the Participant.
3
VESTING AND FORFEITURES
3.1 Vesting. A Participant shall become vested in the
benefit provided under the Plan after achieving the number
of Years of Vesting Service initially set by the
Compensation Committee upon the Participant becoming
eligible for participation in the Plan, or such lesser
number of Year of Vesting Service subsequently set by the
Compensation Committee. A Year of Vesting Service is a one-
year period of employment of a Participant as an employee of
the Company or an Affiliate, the computation of which shall
commence with the initial date of employment of the
Participant and terminate with the Participant's termination
of employment with the Company and all of its Affiliates.
Only a consecutive period of employment shall be considered,
provided however, that if a Participant terminates
employment and thereafter is re-employed within a period of
one year, the period of absence shall be counted towards a
Year of Vesting Service for purposes of the calculation of
vesting. Periods of Total Disability shall be included in
calculating Years of Vesting Service.
3.2 Forfeiture. Except as provided under Articles 5 and 6,
upon a Participant's termination of employment for any
reason other than death or Total Disability with the Company
and all of its Affiliates prior to the vesting of the
Participant under Section 3.1, above, the Participant's
entire benefit under the Plan shall be forfeited.
3.3 Death. Upon a Participant's death while employed by
the Company or any of its Affiliates or while Totally
Disabled, prior to becoming vested pursuant to Section 3.1,
the Participant's entire benefit under the Plan shall be
forfeited. Upon a Participant's death whether before or
after termination of employment with the Company and its
Affiliates, but after becoming vested pursuant to Section
3.1 and prior to the commencement of payment of benefits
under Section 4.1, a benefit shall be payable under the Plan
to the Participant's Beneficiary based upon the Adjusted
Target Value of the Participant as of the date of death.
The benefit shall be payable in equal installments over a
period of 60 months, commencing as of the first day of the
month following the Participant's death.
3.4 Total Disability. If a Participant terminates
employment by reason of Total Disability and thereafter
ceases to be Totally Disabled prior to becoming vested under
Section 3.1 and is not reemployed by the Company or its
Affiliates, the Participant shall forfeit any benefit under
the Plan.
4
BENEFITS
4.1 Commencement. A vested Participant upon attaining the
Participant's Retirement Date shall be entitled to commence
to receive as of the Commencement Date, a monthly retirement
benefit for life equal to the Actuarial Equivalent of
(a) the Target Value of the Participant if the Commencement
Date is the first day of the month following the Retirement
Date or (b) the Adjusted Target Value if the Commencement
Date is any time thereafter.
4.2 Optional Form of Benefit. A Participant may elect an
Actuarial Equivalent optional form of benefit, with the
approval of the Compensation Committee. Such optional form
may be any benefit payable over the life of a Participant
with or without a survivor benefit for a designated
Beneficiary of the Participant and with or without a payment
for a period certain (e.g., benefit for life with a 50%
survivor benefit for spouse or benefit for life with
payments for ten (10) years certain in the event of prior
death).
5
TERMINATION OF EMPLOYMENT WITHOUT CAUSE OR FOR GOOD
REASON
5.1 Minimum Benefit. In the event of a termination of a
Participant's employment with the Company and all Affiliates
(whether prior to, on or after the vesting of the
Participant under Section 3.1 above) (i) by the Company or
the applicable Affiliate without Cause or (ii) by the
Participant for Good Reason, notwithstanding any other
provision of the Plan to the contrary, a Participant shall
be deemed to have a vested Target Value of 75% of the
Participant's Target Value and such amount shall be paid by
the Company in a lump sum to the Participant within ten (10)
business days following the date of the termination of the
Participant's employment with the Company and Affiliates, in
satisfaction of any benefit the Participant or the
Participant's Beneficiary is otherwise entitled to under the
Plan, except for any additional benefit payable under
Section 5.4.
5.2 Termination of Employment for Cause. For purposes of
this Article 5, a termination of a Participant's employment
by the Company or an Affiliate for "Cause" shall mean
termination of the Participant's employment by the Company
for "Cause" as determined under an Employment Agreement of
the Participant, or if none, upon a good faith determination
by the board of directors of the Company, by written notice
to the Participant specifying the event relied upon for such
termination, due to the Participant's serious, willful
misconduct with respect to his duties of employment
(including but not limited to conviction for a felony or
perpetration of a common law fraud) which has resulted or is
likely to result in material economic damage to the Company
or any Affiliate and which, in any such case, is not cured
(if such is capable of being cured) within thirty (30) days
after written notice thereof to the Participant.
5.3 Termination of Employment for Good Reason. For
purposes of this Article 5, a termination of a Participant's
employment by the Participant for "Good Reason" shall mean
termination of the Participant's employment by the
Participant due to "good reason" or "constructive
termination" as determined under an Employment Agreement of
the Participant, or if none, due to a reduction of the
Participant's aggregate base salary with the Company and
Affiliates, or a material change by the Company or
applicable Affiliate in the functions, duties or
responsibilities of the Participant's position which would
reduce the ranking or level, dignity, responsibility,
importance or scope of such position; or any relocation of
the Participant outside of the general Stamford, Connecticut
area, in each case above, without the written consent of the
Participant. The Participant shall provide the Company a
written notice which describes the circumstances being
relied on for the termination of employment for Good Reason
within ninety (90) days after the event giving rise to the
notice. The Company shall have thirty (30) days after
receipt of such notice to remedy the situation prior to the
termination of the Participant's employment for Good Reason.
5.4 Additional Benefit. In the event of a termination of
the Participant's employment resulting in the payment of a
benefit under Section 5.1 above, the Company shall calculate
the Actuarial Equivalent of the Participant's Target Value
payable as a lump sum as of the date of the termination of
the Participant's employment (the "Section 5.4 Actuarial
Equivalent Benefit") within five (5) business days following
the date of the termination of the Participant's employment.
If the Section 5.4 Actuarial Equivalent Benefit is greater
than the lump sum benefit payable under Section 5.1 above,
the difference between the Section 5.4 Actuarial Equivalent
Benefit and the lump sum benefit payable under Section 5.1
above shall be paid by the Company in a lump sum to the
Participant within ten (10) business days of the date of the
termination of the Participant's employment.
6
CHANGE OF CONTROL
6.1 Minimum Benefit. In the event of a Change in Control,
notwithstanding any other provision of the Plan to the
contrary, a Participant actively employed with the Company
or an Affiliate shall be deemed to have a vested Target
Value of 75% of the Participant's Target Value and such
amount (on an unreduced basis) shall be paid by the Company
in a lump sum to the Participant within ten (10) business
days of the Change In Control, in satisfaction of any
benefit the Participant or the Participant's Beneficiary is
otherwise entitled to under the Plan. Such payment shall be
subject to the provisions of Section 6.2.
6.2 Excise Tax Limitation. (i) In the event that any
payment or benefit received or to be received by the
Participant pursuant to the terms of the Plan (the "Plan
Payments") or of any other plan, arrangement or agreement of
the Company or any Affiliate ("Other Payments" and, together
with the Plan Payments, the "Payments") would, in the
opinion of independent tax counsel selected by the Company
and reasonably acceptable to the Participant ("Tax
Counsel"), be subject to the excise tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") or any successor provision, as
determined as provided below, the Payments shall be reduced
(but not below zero) until no portion of the Payments would
be subject to the Excise Tax. For purposes of this
limitation, (a) no portion of the Payments the receipt or
enjoyment of which the Participant shall have effectively
waived in writing shall be taken into account, (b) only the
portion of the Payments which in the opinion of Tax Counsel
constitute a "parachute payment" within the meaning of
Section 280G(b)(2) of the Code shall be taken into account,
(c) the Payments shall be reduced only to the extent
necessary so that the Payments would not be subject to the
Excise Tax, in the opinion of Tax Counsel, and (d) the value
of any noncash benefit or any deferred payment or benefit
included in such Payments shall be determined by the Tax
Counsel in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. If any reduction in
Payments is necessary to satisfy this Section 6.2, the
Participant shall be entitled, at any time by written notice
to the Company, to reduce the amount of any Payment other
wise payable to him (including, without limitation, by
waiving in whole or in part, any accelerated vesting on
options previously granted the Participant), and to select
from among the Payments those to be so reduced in order to
satisfy the limitations of this Section 6.2 and the Company
shall reduce the amount of such Payments accordingly. Any
stock options the vesting of which would have otherwise
accelerated but for the provisions of this Section 6.2 shall
continue to vest in accordance with their respective terms;
and shall upon such vesting remain exercisable until the
applicable expiration dates contained in the applicable
stock option agreements pursuant to which such stock options
were granted, whether or not the Participant's employment is
terminated.
(ii) If it is established pursuant to an opinion of
Tax Counsel or a final determination of a court or an
Internal Revenue Service proceeding that, notwith
standing the good faith of the Participant and the
Company in applying the terms of this Section 6.2,
any Payments paid to the Participant or for his
benefit exceeded the limitation contained in this
Section 6.2, then the Participant shall pay to the
Company, within sixty (60) days of receipt of notice
of such final determination or opinion, an amount
equal to the sum of (a) the excess of the Payments
paid to him or for his benefit over the maximum
Payments that should have been paid to or for his
benefit taking into account the limitations contained
in this Section 6.2, and (b) interest on the amount
set forth in clause (a) of this sentence at the
applicable federal rate (as defined in Section
1274(d) of the Code) from the date of his receipt of
such excess until the date of such payment; provided,
however, that (x) he shall not be required to make
any payment to the Company pursuant to this Section
6.2(ii), (1) if such final determination requires the
payment by him of an Excise Tax by reason of any
Payment or portion thereof or (2) in the case of the
opinion of Tax Counsel, until the expiration of the
application statute of limitations or a final
determination of a court or an Internal Revenue
Service proceeding that no Excise Tax is due and (y)
he shall only be required to make a payment to the
Company pursuant to this Section 6.2(ii) to the
extent such payment is deductible (or excludable from
income) for federal income tax purposes.
(iii) If it is established pursuant to an opinion of
Tax Counsel or a final determination of a court or an
Internal Revenue Service proceeding that, notwith
standing the good faith of the Participant and the
Company in applying the terms of this Section 6.2,
any Payments paid to him or for his benefit were in
an amount less than the maximum Payments which could
be payable to him without such payments being subject
to the Excise Tax, then the Company shall pay to him,
within ninety (90) days of receipt of notice of such
final determination or opinion, an amount equal to
the sum of (a) the excess, if any, of the payments
that should have been paid to him or for his benefit
over the payments paid to or for his benefit and (b)
interest on the amount set forth in clause (a) of
this sentence at the applicable federal rate (as
defined in Section 1274(d) of the Code) from the date
of his non-receipt of such excess until the date of
such payment.
(iv) The Company shall pay the Plan Payments at such
times as set forth in Section 6.1 hereof; provided,
however, that if the Company in good faith believes
that any such payments shall be reduced under the
provisions of this Section 6.2, the Company shall pay
to the Participant at such time a good faith estimate
of the reduced payments, the computation of which
shall be given to him in writing together with a
written explanation of the basis for making such
adjustment. The Company shall, within thirty (30)
days of the otherwise applicable payment date, either
(a) pay to the Participant the balance of the
payments together with interest thereon at the
applicable federal rate (as defined in Section
1274(d) of the Code) or (b) deliver to him a copy of
the opinion of Tax Counsel referred to in Section
6.2(i) hereof, as applicable, establishing the amount
of the reduced payments, along with the excess, if
any, of the reduced payments over the estimate
previously paid on account thereof, together with
interest thereon at the applicable federal rate (as
defined in Section 1274(d) of the Code).
(v) If the Participant and the Company are parties
to any other agreement relating to excise tax
liability under Section 4999 of the Code, and the
provisions of such agreement conflict with the
provisions of this Section 6.2, the provisions of
such other agreement shall govern to the extent
inconsistent with this Section 6.2.
6.3 Change in Control. A "Change in Control" shall be
deemed to have occurred if (i) a tender offer shall be made
and consummated for the ownership of fifty-one percent (51%)
or more of the outstanding voting securities of the Company,
(ii) the Company or any subsidiary thereof shall be merged
with or into or consolidated with another corporation and as
a result of such merger or consolidation less than seventy-
five percent (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, (iii)
the Company shall sell substantially all of its assets to
another corporation which is not a wholly-owned subsidiary
of the Company, (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 Securities Exchange Act of 1934, as amended,
shall acquire twenty-five percent (25%) or more of the
outstanding voting securities of the Company (whether
directly, indirectly, beneficially or of record) or (v) any
other event shall take place that a majority of the board of
directors of the Company, in its sole discretion, shall
determine constitutes a "Change in Control" for the purposes
hereof. 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 Securities
Exchange Act of 1934, as amended.
7
MISCELLANEOUS
7.1 Designation of Beneficiary. A Participant shall
designate on a form provided by the Compensation Committee a
beneficiary to receive any death benefit payable under the
terms of the Plan. In the event a Participant does not
designate a beneficiary or the beneficiary dies prior to the
death of the Participant, the beneficiary shall be deemed to
the Participant's estate, except in the event of an optional
form of benefit selected under Section 4.2 which provides
for a survivor benefit to be paid for the life of a
designated beneficiary, in which case no survivor benefit
shall be payable after the death of the designated
beneficiary.
7.2 Incapacity. If a person to whom a benefit is payable
is incompetent by reason of a physical or mental disability,
the Compensation Committee, in its sole discretion, may
cause the payments due to such person to made to another
person for his or her benefit without any responsibility of
the Compensation Committee to receipts of the application of
such payment. Such payment shall operate as a complete
discharge of the obligations of such person under the Plan.
7.3 Withholding Taxes. The Company may directly or
indirectly withhold from any payments under this Plan all
federal, state, city or other taxes that shall be required
pursuant to any law or governmental regulation.
8
CLAIMS
8.1 Claims Procedure. If any Participant or his or her
Beneficiary has a claim for benefits which is not being
paid, such claimant may file with the Compensation Committee
a written claim setting forth the amount and nature of the
claim, supporting facts, and the claimant's address. The
Compensation Committee shall notify each claimant of its
decision in writing by registered or certified mail within
sixty (60) days after its receipt of a claim or, under
special circumstances, within ninety (90) days after its
receipt of a claim. If a claim is denied, the written
notice of denial shall set forth the reasons for such
denial, refer to pertinent Plan provisions on which the
denial is based, describe any additional material or
information necessary for the claimant to realize the claim,
and explain the claim review procedure under the Plan.
8.2 Claims Review Procedure. A claimant whose claim has
been denied or such claimant's duly authorized representative may
file, within sixty (60) days after notice of such denial is
received by the claimant, a written request for review of such
claim by the Compensation Committee. If a request is so filed,
the Compensation Committee shall review the claim and notify
the claimant in writing of its decision within sixty (60) days
after receipt of such request. In special circumstances, the
Compensation Committee may extend for up to sixty (60) additional
days the deadline for its decision. The notice of the final
decision of the Compensation Committee shall include the
reasons for its decision and specific references to the Plan
provisions on which the decision is based. The decision of
the Compensation Committee shall be final and binding on all
parties.
9
ADMINISTRATION
9.1 Quorum. A majority of the members of the Compensation
Committee shall constitute a quorum for any meeting of such
committee held with respect to the Plan, and the acts of a
majority of the members of either such committee, whether at
a meeting or approved in writing without a meeting shall be
valid acts of such committee.
9.2 Duties. The Compensation Committee shall have the
power and duty to do all things necessary or convenient to
effect the intent and purposes of the Plan, whether or not
such powers and duties are specifically set forth herein,
and, by way of amplification and not limitation of the
foregoing, the Compensation Committee shall have the power
to:
(1) provide rules and regulations for the management,
operation and administration of the Plan, and, from time to
time, amend or supplement such rules and regulations;
(2) construe the Plan in its sole discretion to the fullest
extent permitted by law, which shall be final and conclusive
upon all parties hereto;
(3) correct any defect, supply any omission, or reconcile
any inconsistency in the Plan in such manner and to such
extent as it shall deem appropriate in its sole discretion
to carry the same into effect including amendments to the
Plan;
(4) establish actuarial principles and assumptions from
time to time for use with respect to the Plan, to the extent
not set forth in the Plan; and
(5) delegate all or any portion of the power to manage,
operate and administer the Plan to any person that it so
chooses.
9.3 Binding Authority. The acts and determinations of the
Compensation Committee or its duly authorized delegate
within the powers conferred by the Plan shall be final and
conclusive for all purposes of the Plan, and shall not be
subject to any appeal or review except as provided herein.
9.4 Exculpation. No member of the Compensation Committee
shall be directly or indirectly responsible or otherwise
liable for any action taken or any failure to take action as
a member of the Compensation Committee, except for such
action, default, exercise or failure to exercise resulting
from such member's gross negligence or willful misconduct.
No member of the Compensation Committee shall be liable in
any way for the acts or defaults of any other member of the
Compensation Committee, or any of its advisors, agents or
representatives.
9.5 Indemnification. The Company shall indemnify and hold
harmless each member of the Compensation Committee against
any and all expenses and liabilities arising out of his or
her own activities relating to the Compensation Committee,
except for expenses and liabilities arising out of a
member's gross negligence or willful misconduct.
9.6 Information. The Company shall furnish to the
Compensation Committee all information the Compensation
Committee may deem appropriate for the exercise of its
powers and duties in the administration of the Plan. The
Compensation Committee shall be entitled to rely on any
information provided by the Company without any
investigation thereof.
9.7 Self-Interest. No member of the Compensation Committee
may act, vote or otherwise influence a decision of such
committee relating to his or her benefits, if any, under the
Plan.
10
GENERAL PROVISIONS
10.1 Non-Property Interest. Any Participant who may have or
claim any interest in or right to any compensation, payment
or benefit payable hereunder shall rely solely upon the
unsecured promise of the Company. Nothing herein shall be
construed to give to or vest in the Participant or any other
person, now or hereafter, any right, title, interest or
claim in or to any specific asset, fund, reserve, account,
insurance or annuity policy or contract, or other property
of any kind whatsoever owned by the Company, or in which the
Company may have any right, title or interest, now or at any
time in the future.
10.2 Disclosure. The Compensation Committee shall make
available to each Participant for examination at the
principal office of the Company (or at such other location
as may be determined by the Compensation Committee), a copy
of the Plan and such of its records, or copies thereof, as
may pertain to any benefits of such Participant under the
Plan.
10.3 Other Rights. The Plan shall not affect or impair the
rights or obligations of the Company or a Participant under
any other contract, arrangement, or pension, profit sharing
or other compensation plan.
10.4 Amendment or Termination. Notwithstanding any other
provision of the Plan, the Plan may at any time be amended,
suspended or terminated by the Company, subject to prior
written approval of the Compensation Committee in its sole
discretion, except no such amendment, suspension or
termination shall (a) reduce a Participant's vested Target
Value (determined as of the date of such termination or
amendment), or (b) if a Participant has not forfeited his or
her benefit prior to the time of any such termination or
amendment, shall reduce a participant's Target Value below
the product of the Target Value, multiplied by a fraction,
with the numerator a Participant's Years of Participation
and the denominator a Participant's projected Years of
Participation to the Participant's Retirement Date (the
Participant's "Accrued Target Value"). In the latter case
the Participant's Accrued Target Value shall be deemed the
Participant's vested Target Value for the purpose of
calculating the Participant's benefit under the Plan.
Moreover, if the Compensation Committee has established any
additional or revised terms and conditions of participation
for any Participant, the Compensation Committee may, in its
sole discretion, add to, amend or terminate any such terms
and conditions upon prior written notice to the Participant,
except no such amendment or termination shall reduce a
Participant's vested Target Value or Accrued Target Value.
10.5 Severability. If any term or condition of the Plan
shall be invalid or unenforceable to any extent or in any
application, then the remainder of the Plan, with the
exception of such invalid or unenforceable provision, shall
not be affected thereby, and shall continue in effect and
application to its fullest extent.
10.6 No Employment Rights. Neither the establishment of the
Plan or any action of the Compensation Committee shall be
held or construed to confer upon any Participant the right
to a continuation of employment by the Company. Subject to
any applicable employment contract, the Company reserves the
right to dismiss or otherwise deal with any Participant to
the same extent as though the Plan had not been adopted.
10.7 Transferability of Rights. No Participant or spouse of
a Participant shall have any right to commute, encumber,
transfer or otherwise dispose of or alienate any present or
future right or expectancy which he may have at any time to
receive payments of benefits hereunder, which benefits and
the right thereto are expressly declared to be non-
assignable and nontransferable, except to the extent
required by law. Any attempt to transfer or assign a
benefit, or any rights granted hereunder, by a Participant
or the spouse of a Participant shall, in the sole discretion
of the Compensation Committee (after consideration of such
facts as it deems pertinent), be grounds for terminating any
rights of the Participant, his joint or contingent annuitant
or beneficiary, to any portion of the Plan benefits not
previously paid.
10.8 Governing Law. The Plan shall be construed,
administered, and enforced according to the laws of the
State of Connecticut, except to the extent that such laws
are preempted by the federal laws of the United States of
America.
IN WITNESS WHEREOF, the Company has caused this
Plan to be adopted as of the effective date first set forth
above.
CUC INTERNATIONAL INC.
By:
CUC INTERNATIONAL INC.
1996 Executive Retirement Plan
CUC INTERNATIONAL INC.
EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
Page
ARTICLE 1 PURPOSE AND DEFINITIONS 1
ARTICLE 2 ELIGIBILITY AND PARTICIPATION 3
2.1 Eligibility 3
2.2 Designation of Vesting Requirement,
Age for Commencement of Payment of
Benefits and Target Value 3
ARTICLE 3 VESTING AND FORFEITURES 4
3.1 Vesting 4
3.2 Forfeiture 4
3.3 Death 4
3.4 Total Disability 5
ARTICLE 4 BENEFITS 5
4.1 Commencement 5
4.2 Optional Form of Benefit 5
ARTICLE 5 TERMINATION OF EMPLOYMENT WITHOUT CAUSE
OR FOR GOOD REASON 6
5.1 Minimum Benefit 6
5.2 Termination of Employment for Cause 6
5.3 Termination of Employment for
Good Reason 6
5.4 Additional Benefit 7
ARTICLE 6 CHANGE OF CONTROL 7
6.1 Minimum Benefit 7
6.2 Excise Tax Limitation 8
6.3 Change in Control 11
ARTICLE 7 MISCELLANEOUS 11
7.1 Designation of Beneficiary 11
7.2 Incapacity 12
7.3 Withholding Taxes 12
ARTICLE 8 CLAIMS 12
8.1 Claims Procedure 12
8.2 Claims Review Procedure 12
ARTICLE 9 ADMINISTRATION 13
9.1 Quorum 13
9.2 Duties 13
9.3 Binding Authority 14
9.4 Exculpation 14
9.5 Indemnification 14
9.6 Information 14
9.7 Self-Interest 14
ARTICLE 10 GENERAL PROVISIONS 15
10.1 Non-Property Interest 15
10.2 Disclosure 15
10.3 Other Rights 15
10.4 Amendment or Termination 15
10.5 Severability 16
10.6 No Employment Rights 16
10.7 Transferability of Rights 16
10.8 Governing Law 17