Exhibit 99.2
PLAN FOR CORPORATE GOVERNANCE OF CUC INTERNATIONAL INC.
FOLLOWING THE EFFECTIVE TIME
BOARD OF DIRECTORS; COMMITTEES OF THE BOARD
At and from the Effective Time, the total number of
persons serving on the Board of Directors of CUC shall be 30
(unless otherwise agreed in writing between CUC and HFS prior
to the Effective Time), half of whom shall be CUC Directors and
half of whom shall be HFS Directors (as such terms are defined
in the Amended and Restated By-Laws attached as Exhibit A-2 to
the Merger Agreement (the "Restated By-Laws")). The Board of
Directors of CUC will adopt a resolution, effective as of the
Effective Time, fixing the size of the CUC Board at 30.
The persons to serve initially on the Board of Directors
of CUC at the Effective Time who are HFS Directors shall be
selected solely by and at the absolute discretion of the Board
of Directors of HFS prior to the Effective Time; and the
persons to serve on the Board of Directors of CUC at the
Effective Time who are CUC Directors shall be selected solely
by and at the absolute discretion of the Board of Directors of
CUC prior to the Effective Time. Initially, five HFS Directors
and five CUC Directors designated prior to the Effective Time
by the HFS Board of Directors and the CUC Board of Directors,
respectively, shall be assigned to each of the three classes of
the Board of Directors of CUC from and after the Effective
Time. In the event that, prior to the Effective Time, any
person so selected to serve on the Board of Directors of CUC
after the Effective Time is unable or unwilling to serve in
such position, the Board of Directors which is entitled to
select such person shall designate another person to serve in
such person's stead in accordance with the provisions of the
immediately preceding two sentences. Until the third
anniversary of the Effective Time, the Executive Committee of
the Board of CUC shall have the exclusive power and authority
to nominate directors for election to the Board at the next
stockholders' meeting at which Directors are to be elected, to
elect directors to fill vacancies on the Board in between
stockholders' meetings and to fill
vacancies on any committee of the Board to the extent an
alternate member has not been previously designated by the
Board of Directors of CUC and shall promptly nominate Directors
for election to the Board at the next stockholders' meeting at
which Directors are to be elected to the Board, elect Directors
to fill vacancies on the Board in between stockholders'
meetings or elect Directors to fill vacancies on any committee
of the Board (to the extent an alternate member has not
previously been designated by the Board), as the case may be,
by resolution adopted in accordance with the Restated By-Laws
and as provided in the next sentence. Nominations of Directors
for election to the Board at any annual or special meeting of
stockholders, the election of Directors to fill vacancies on
the Board in between stockholders' meetings or the election of
Directors to fill vacancies on any committee of the Board (to
the extent an alternate member has not been previously
designated by the Board) shall be undertaken by the Executive
Committee such that (1) the number of HFS Directors and CUC
Directors on the Board or any committee of the Board shall be
equal and (2) the remaining HFS Directors (if the number of HFS
Directors is less than the number of CUC Directors) or the
remaining CUC Directors (if the number of CUC Directors is less
than the number of HFS Directors) shall designate the person to
be nominated or elected.
From and after the Effective Time, as provided in the
Restated By-Laws, the Board of Directors of CUC shall have
three committees:
(i) The Executive Committee (which will also act as the
nominating committee) will consist of four CUC Directors
(including the Chairman of the Board of CUC) and four HFS
Directors (including the Chief Executive Officer of HFS). The
Board of Directors of CUC will adopt a resolution, effective as
of the Effective Time, establishing the Executive Committee in
accordance with the Restated By-Laws, delegating to the
Executive Committee those powers and authorities as provided in
the Restated By-Laws, appointing its members and naming
specific alternate members (who shall be HFS Directors) for
members of the Executive Committee who are HFS Directors and
naming specific alternate members (who shall be CUC Directors)
for the members of the Executive Committee who are CUC
Directors. The Chairman of the Board will also serve as
Chairman of the Executive Committee. The Execu-
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tive Committee will include three CUC Directors and three of
the HFS Directors who, to the extent practicable, are officers
of CUC at and after the Effective Time and the remaining
directors will be independent directors.
(ii) The Compensation Committee will consist of two CUC
Directors and two HFS Directors. The Chairman of the
Compensation Committee will be designated by the HFS Directors.
The Board of Directors of CUC will adopt a resolution,
effective as of the Effective Time, establishing the
Compensation Committee in accordance with the Restated By-Laws,
delegating to the Compensation Committee those powers and
authorities as provided in the Restated By-Laws, appointing its
members and naming specific alternate members (who shall be HFS
Directors) for members of the Compensation Committee who are
HFS Directors and naming specific alternate members (who shall
be CUC Directors) for members of the Compensation Committee who
are CUC Directors.
(iii) The Audit Committee will consist of two CUC
Directors and two HFS Directors. The Chairman of the Audit
Committee will be designated by the CUC Directors. The Board of
Directors of CUC will adopt a resolution, effective as of the
Effective Time, establishing the Audit Committee in accordance
with the Restated By-Laws, delegating to the Audit Committee
those powers and authorities as provided in the Restated By-
Laws, appointing its members and naming specific alternate
members (who shall be HFS Directors) for members of the Audit
Committee who are HFS Directors and naming specific alternate
members (who shall be CUC Directors) for members of the Audit
Committee who are CUC Directors.
At and after the Effective Time and until January 1, 2002,
the removal of Mr. Forbes or Mr. Silverman from their executive
positions or any breach of their respective employment
agreements shall require the approval of at least 80% of the
entire Board of Directors of CUC. Until the third anniversary
of the Effective Time, any change in the size of the Board of
Directors of CUC, any change in the composition or power and
authority of the Committees of the CUC Board or the
chairmanship of such Committees or any change or amendment to
the Restated By-Laws implementing any of the foregoing shall
require the approval by at least 80% of the entire Board of
Directors of CUC.
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Each of the resolutions of the CUC Board adopted in order
to effect the provisions of this Exhibit B shall state that,
until the third anniversary of the Effective Time, such
resolution may be amended or superseded only by a new
resolution of the CUC Board which is adopted by 80% of the
entire Board (as defined in the Restated By-Laws).
OFFICERS
From and after the Effective Time, the Executive Officers
of CUC shall be the following:
NAME TITLE
Walter A. Forbes............... Chairman of the Board
Henry R. Silverman............. President and Chief Exec-
utive Officer
Michael P. Monaco.............. Chief Financial Officer
James E. Buckman .............. General Counsel
From and after January 1, 2000, Mr. Silverman shall be the
Chairman of the Board and Mr. Forbes shall be the President and
Chief Executive Officer. If, for any reason Mr. Silverman
ceases to serve as President and Chief Executive Officer prior
to January 1, 2000 and at such time Mr. Forbes is Chairman of
the Board, Mr. Forbes shall become President and Chief
Executive Officer. If, for any reason Mr. Forbes ceases to
serve as Chairman of the Board prior to January 1, 2000 and at
such time Mr. Silverman is President and Chief Executive
Officer, Mr. Silverman shall become Chairman of the Board.
Reporting responsibilities of CUC officers will be as set
forth on the attachment hereto.
Each of HFS and CUC shall take such action as shall
reasonably be deemed by either thereof to be advisable to give
effect to the provisions set forth in this Exhibit B.
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