<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One):
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
FOR THE TRANSITION PERIOD FROM _____________ TO ______________
Commission File Number: 1-10308
-------
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below: SAVINGS INCENTIVE PLAN OF CUC INTERNATIONAL INC.
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office: CUC INTERNATIONAL INC., 707 SUMMER STREET,
STAMFORD, CONNECTICUT 06901
<PAGE>
REQUIRED INFORMATION
The following pages set forth, with respect to the Savings Incentive Plan of CUC
International Inc. ("Plan"), the required audited financial statements for the
Plan prepared in accordance with the financial reporting requirements of the
Employee Retirement Income Security Act of 1974.
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned thereunto duly authorized.
Savings Incentive Plan of CUC International Inc.
(Name of Plan)
Date June 30, 1997 /s/ COSMO CORIGLIANO
------------- ----------------------------------------
Name: Cosmo Corigliano
Title: Member, Savings Incentive Plan
Committee
Date June 30, 1997 /s/ WALTER FORBES
------------- ----------------------------------------
Name: Walter Forbes
Title: Member, Savings Incentive Plan
Committee
Date June 30, 1997 /s/ CHRISTOPHER MCLEOD
------------- ----------------------------------------
Name: Christopher McLeod
Title: Member, Savings Incentive Plan
Committee
Date June 30, 1997 /s/ CASPER SABATINO
------------- ----------------------------------------
Name: Casper Sabatino
Title: Member, Savings Incentive Plan
Committee
<PAGE>
Audited Financial Statements
& and Schedules
Savings Incentive Plan of
CUC International Inc.
December 31, 1996 and 1995
with Report of Independent Auditors
<PAGE>
Savings Incentive Plan of
CUC International Inc.
Audited Financial Statements
and Schedules
Years ended December 31, 1996 and 1995
CONTENTS
Report of Independent Auditors.................................................1
Audited Financial Statements
Statements of Assets Available for Benefits, With Fund Information.............2
Statements of Changes in Assets Available for Benefits, With Fund Information..4
Notes to Financial Statements..................................................6
Schedules
Assets Held for Investment Purposes...........................................12
Schedule of Reportable Transactions...........................................15
<PAGE>
Report of Independent Auditors
To the Administrative Committee of the
Savings Incentive Plan of CUC International Inc.
We have audited the accompanying statements of assets available for benefits of
the Savings Incentive Plan of CUC International Inc. as of December 31, 1996 and
1995, and the related statements of changes in assets available for benefits for
the years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan at December
31, 1996 and 1995, and the changes in its assets available for benefits for the
years then ended, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1996, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The Fund Information in
the statement of assets available for benefits and the statement of changes in
assets available for benefits is presented for purposes of additional analysis
rather than to present the assets available for benefits and changes in assets
available for benefits of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
ERNST & YOUNG LLP
Stamford, CT
June 27, 1997
<PAGE>
<TABLE>
<CAPTION>
SAVINGS INCENTIVE PLAN OF
CUC INTERNATIONAL INC.
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
FUND INFORMATION
------------------------------------------------------------------------
EQUITY CUC LIMITED
FIXED BOND SEPARATE STOCK MATURITY
FUND FUND FUND FUND FUND
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment at fair value -
(Note C)
Common stocks $33,709,140 $34,390,404
Preferred stock 71,167
Shares of registered investment companies:
Neuberger & Berman Ltd. Maturity Bond $10,717,650
Neuberger & Berman Int'l Equity
Neuberger & Berman Genesis
First Union Evergreen Money Market
Short-term investment funds $32,636 $28,357 1,145,991 1,352,444
Loans to participants
-----------------------------------------------------------------------
Total investments 32,636 28,357 34,926,298 35,742,848 10,717,650
Contributions receivable:
Employee 120,763 94,533 39,176
Employer 49,783 43,615 19,284
Interest and dividends receivable 27,701
-----------------------------------------------------------------------
Total receivables 198,247 138,148 58,460
-----------------------------------------------------------------------
Assets available for benefits $32,636 $28,357 $35,124,545 $35,880,996 $10,776,110
-----------------------------------------------------------------------
-----------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1996
FUND INFORMATION
-----------------------------------------------------------------------
INTERNATIONAL MONEY
EQUITY GENESIS MARKET LOAN
FUND FUND FUND FUND TOTAL
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment at fair value -
(Note C)
Common stocks $ 68,099,544
Preferred stock 71,167
Shares of registered investment companies:
Neuberger & Berman Ltd. Maturity Bond$ 10,717,650
Neuberger & Berman Int'l Equity $43,929 43,929
Neuberger & Berman Genesis $56,051 56,051
First Union Evergreen Money Market $10,294,216 10,294,216
Short-term investment funds $ 39,366 2,598,794
Loans to participants 2,843,187 2,843,187
-----------------------------------------------------------------------
Total investments 43,929 56,051 10,294,216 2,882,553 94,724,538
Contributions receivable:
Employee 3,666 7,482 35,162 300,782
Employer 1,407 2,709 19,083 135,881
Interest and dividends receivable 27,701
-----------------------------------------------------------------------
Total receivables 5,073 10,191 54,245 464,364
-----------------------------------------------------------------------
Assets available for benefits $49,002 $66,242 $10,348,461 $2,882,553 $95,188,902
-----------------------------------------------------------------------
-----------------------------------------------------------------------
SEE ACCOMPANYING NOTES.
</TABLE>
2
<PAGE>
SAVINGS INCENTIVE PLAN OF
CUC INTERNATIONAL INC.
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
<TABLE>
<CAPTION>
DECEMBER 31, 1995
FUND INFORMATION
-------------------------------------------------------------
CUC
FIXED BOND EQUITY STOCK LOAN
FUND FUND FUND FUND FUND TOTAL
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investment at fair value - (Note C)
Bonds and corporate notes $ 1,514,235 $ 5,906,381 $ 7,420,616
Common stocks $25,908,434 $29,604,768 55,513,202
United States government and
government agency securities 4,933,369 3,847,421 8,780,790
Guaranteed insurance contracts 1,659,178 1,659,178
Short-term investment funds 2,336,794 236,790 1,461,723 2,343,111 $ 30,169 6,408,587
Loans to participants 1,643,598 1,643,598
------------------------------------------------------------------------------
Total investments 10,443,576 9,990,592 27,370,157 31,947,879 1,673,767 81,425,971
Contributions receivable:
Employee 129,139 121,543 319,050 189,911 759,643
Employer 62,764 59,072 155,065 92,300 369,201
Interest and dividends receivable 99,737 178,018 27,880 305,635
------------------------------------------------------------------------------
Total receivables 291,640 358,633 501,995 282,211 1,434,479
------------------------------------------------------------------------------
Assets available for benefits $10,735,216 $10,349,225 $27,872,152 $32,230,090 $1,673,767 $82,860,450
------------------------------------------------------------------------------
------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
<CAPTION>
SAVINGS INCENTIVE PLAN OF
CUC INTERNATIONAL INC.
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1996
FUND INFORMATION
-------------------------------------------------------------------------
EQUITY CUC LIMITED
FIXED BOND SEPARATE STOCK MATURITY
FUND FUND FUND FUND FUND
-------------------------------------------------------------------------
<C> <C> <C> <C> <C>
Investment income:
Interest and dividends $ 532,577 $ 628,580 $ 251,481 $ 120,883 $ 1,421
Net appreciation
(depreciation) in fair
value of investment (85,600) (358,126) 1,972,977 511,371 (35,488)
-------------------------------------------------------------------------
446,977 270,454 2,224,458 632,254 (34,067)
Contributions:
Employee 870,595 924,339 3,276,321 2,371,948 200,017
Employer 401,327 425,669 1,491,479 1,096,025 99,947
-------------------------------------------------------------------------
1,271,922 1,350,008 4,767,800 3,467,973 299,964
Transfer of participants'
funds from other plans 1,076,689 1,170,684 3,080,238 1,771,672 3,563
Loan repayments 107,120 88,565 210,359 194,446
Loan disbursements (292,206) (346,856) (650,250) (664,048)
Distributions to participants (2,017,315) (1,178,240) (3,009,098) (3,701,839)
-------------------------------------------------------------------------
Net change during the year 593,187 1,354,615 6,623,507 1,700,458 269,460
Net assets available for
benefits at beginning of year 10,735,216 10,349,225 27,872,152 32,230,090
Interfund transfers (net) (11,295,767) (11,675,483) 628,886 1,950,448 10,506,650
-------------------------------------------------------------------------
Net assets available for
benefits at end of year $ 32,636 $ 28,357 $35,124,545 $35,880,996 $10,776,110
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
FUND INFORMATION
-----------------------------------------------------------------------
INTERNATIONAL MONEY
EQUITY GENESIS MARKET LOAN
FUND FUND FUND FUND TOTAL
-----------------------------------------------------------------------
<C> <C> <C> <C> <C>
Investment income:
Interest and dividends $ 63 $ 441 $ 40,044 $ 1,575,490
Net appreciation
(depreciation) in fair
value of investment 19,637 3,950 2,028,721
-----------------------------------------------------------------------
19,700 4,391 40,044 3,604,211
Contributions:
Employee 14,947 33,093 173,881 7,865,141
Employer 6,612 13,218 96,308 3,630,585
-----------------------------------------------------------------------
21,559 46,311 270,189 11,495,726
Transfer of participants'
funds from other plans 7,743 15,540 8,878 7,135,007
Loan repayments $ (600,490)
Loan disbursements 1,953,360
Distributions to participants (9,906,492)
-----------------------------------------------------------------------
Net change during the year 49,002 66,242 319,111 1,352,870 12,328,452
Net assets available for
benefits at beginning of year 1,673,767 82,860,450
Interfund transfers (net) 10,029,350 (144,084)
-----------------------------------------------------------------------
Net assets available for
benefits at end of year $49,002 $66,242 $10,348,461 $2,882,553 $95,188,902
-----------------------------------------------------------------------
-----------------------------------------------------------------------
SEE ACCOMPANYING NOTES.
</TABLE>
4
<PAGE>
SAVINGS INCENTIVE PLAN OF
CUC INTERNATIONAL INC.
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
FUND INFORMATION
------------------------------------------------------------------------------
CUC
FIXED BOND EQUITY STOCK LOAN
FUND FUND FUND FUND FUND TOTAL
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Interest and dividends $ 666,485 $ 712,129 $ 283,679 $ 80,242 $ 1,742,535
Net appreciation in fair value of
investments 26,988 1,208,502 5,729,040 10,696,637 17,661,167
------------------------------------------------------------------------------
693,473 1,920,631 6,012,719 10,776,879 19,403,702
Contributions:
Employee 1,146,562 1,346,928 2,763,477 1,092,454 6,349,421
Employer 538,200 624,902 1,292,655 523,321 2,979,078
------------------------------------------------------------------------------
1,684,762 1,971,830 4,056,132 1,615,775 9,328,499
Transfer of participants' funds
from other plans 2,651,407 48,165 201,966 178,557 $ 54,976 3,135,071
Loan repayments 45,609 16,540 33,304 20,123 (115,576)
Loan disbursements (251,591) (205,487) (502,406) (680,282) 1,639,766
Distributions to participants (1,362,450) (1,032,136) (2,568,358) (5,379,155) (10,342,099)
------------------------------------------------------------------------------
Net change during the year 3,461,210 2,719,543 7,233,357 6,531,897 1,579,166 21,525,173
Net assets available for benefits
at beginning of year 9,836,048 9,484,476 19,458,413 22,460,072 96,268 61,335,277
Interfund transfers (net) (2,562,042) (1,854,794) 1,180,382 3,238,121 (1,667)
------------------------------------------------------------------------------
Net assets available for benefits
at end of year $10,735,216 $10,349,225 $27,872,152 $32,230,090 $1,673,767 $82,860,450
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE>
Savings Incentive Plan of
CUC International Inc.
Notes to Financial Statements
NOTE A- DESCRIPTION OF THE PLAN
The following description of the Savings Incentive Plan (the "Plan") of CUC
International Inc. (the "Company") provides only general information.
Participants should refer to the Summary Plan Description or the Plan documents
which are available from the Company, for a more complete description of the
Plan's provisions.
The financial statements of the Plan have been prepared in accordance with
generally accepted accounting principles and, as such, include amounts based
upon judgments and estimates made by management, which may differ from actual
results.
GENERAL
The Plan is a defined contribution plan which provides retirement, disability
and death benefits to eligible employees of the Company and its subsidiaries.
The Plan covers substantially all full-time employees of the Company and its
subsidiaries who have been employed for at least one year (amended from six
months of service in March 1995) and are age twenty-one or older. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
On March 31, 1996, the Employee Stock Ownership and Savings Plan (the "ESOP") of
Getting to Know You, Inc. (a wholly-owned subsidiary of the Company) terminated
and the related participants were given the option to rollover their balances
into the Plan. During the year ended December 31, 1996, $7,135,007 from the ESOP
was transferred to the Plan.
Effective November 1, 1996, Fleet Financial Group ("Fleet") was replaced by The
Metropolitan Life Insurance Company ("MetLife") as the recordkeeper of the Plan.
Additionally, effective November 1, 1996, Fleet was replaced by Neuberger &
Berman Trust Company ("Neuberger & Berman") as the trustee for the CUC Stock
Fund and Chase Manhattan Bank ("Chase") as the trustee for all other funds of
the Plan.
In March 1995, the Plan was amended to eliminate the exclusion of part-time
employees and allow for hardship withdrawal for payments of educational fees.
The Plan was also amended to permit loans to be made to participants, effective
on June 1, 1995. All loans made prior to this date represent loans to the
participants of the Employee Stock Ownership and Savings Plan of Entertainment
Publications, Inc. transferred on July 1, 1994.
On July 18, 1995, the Essex Corporation 401-K Plan merged its assets totaling
$2,557,537 into the Plan.
On December 8, 1995, the Plan adopted the profit sharing exception to the
annuity rules by requiring that the death benefits be payable to the surviving
spouse, unless the spouse consents to another beneficiary.
6
<PAGE>
Savings Incentive Plan of
CUC International Inc.
Notes to Financial Statements (continued)
NOTE A- DESCRIPTION OF PLAN (CONTINUED)
CONTRIBUTIONS
Each year, participants may contribute up to 15% (limited to 6% for highly
compensated participants) of pretax annual compensation, as defined in the Plan.
The Company matches each participant's bi-weekly contribution dollar for dollar
of the first $27.69, $.60 for each dollar of the next $36.93, and $.40 for each
dollar of the next $27.69, for a total maximum match of $60.92 per bi-weekly pay
period. Participants may also contribute amounts representing transfers from
other qualified plans, which are not subject to the Company match.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of the Company's contributions and Plan earnings. Allocations are
based on participant earnings or account balances, as defined. Forfeited
balances of terminated participants' nonvested accounts are used to reduce
future Company contributions.
VESTING
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company matching portion of their accounts plus actual
earnings thereon is based on years of credited service. A participant is 100%
vested after five years of credited service.
LOANS TO PARTICIPANTS
Effective June 1, 1995, participants may borrow from their fund accounts a
maximum of $50,000 or 50% of their account balance. Loan terms range from 1-5
years and are secured by the balance in the participant's account. The loans
bear interest at a rate commensurate with local prevailing rates as determined
quarterly by the plan administrator and the trustee. Interest rates on
outstanding loans currently range from 7.5% to 12%. Principal and interest is
paid ratably through monthly payroll deductions.
INVESTMENT OPTIONS
Upon enrollment in the Plan (and until October 31, 1996), a participant could
direct employer and employee contributions in 5% increments in any of the
following investment options that were available under the Plan (through Fleet).
FIXED FUND- Funds are invested in United States Treasury obligations,
certificates of deposit, commercial paper, and money market funds, all
having a maturity of three years or less from the date of investment, and
insurance company contracts which provide a fixed rate of interest for a
specified period of time.
BOND FUND- Funds are invested in long-term fixed-income securities,
including government and corporate bonds, or in mutual funds which
specialize in such fixed-income securities.
EQUITY FUND- Funds are invested in a variety of common and preferred
stocks, with emphasis on a balanced portfolio of primarily common stocks or
in mutual funds which specialize in such equity investments.
7
<PAGE>
Savings Incentive Plan of
CUC International Inc.
Notes to Financial Statements (continued)
NOTE A- DESCRIPTION OF PLAN (CONTINUED)
INVESTMENT OPTIONS (CONTINUED)
CUC STOCK FUND- Funds are invested in common stock of the Company, which is
traded on the New York Stock Exchange.
Effective November 1, 1996, a participant may direct employer and employee
contributions in 1% increments in any of the following investment options
available under the Plan (through Neuberger & Berman and Chase). Participants
may change their investment balances on a daily basis.
EQUITY SEPARATE FUND - Funds are invested in securities for long-term capital
appreciation and are primarily invested in common stocks.
CUC STOCK FUND - Funds are invested in common stock of the Company, which is
traded on the New York Stock Exchange.
LIMITED MATURITY BOND FUND - Funds are invested in a diversified portfolio of
short-to intermediate-term U.S. government and agency securities as well as
primarily investment grade debt securities issued by financial institutions,
corporations and others.
INTERNATIONAL EQUITY FUND - Funds are invested in a diversified portfolio of
equity securities of medium to large capitalized companies doing business
outside the United States and traded on foreign exchanges.
GENESIS FUND- Funds are invested principally in common stocks of companies with
a market capitalization of $750 million or less.
MONEY MARKET FUND - Funds are invested in high-quality money market instruments.
Additionally, effective June 1, 1997, a participant may direct the employer and
employee contributions in 1% increments in the MetLife Stock Market Index
Guarantee Account which is a commingled separate account that offers the return
of the Standard & Poor's 500 Composite Stock Price Index, minus an annual
management fee.
PAYMENT OF BENEFITS
Upon termination of employment, a participant will receive a lump-sum amount
equal to the vested value of his or her account.
8
<PAGE>
Savings Incentive Plan of
CUC International Inc.
Notes to Financial Statements (continued)
NOTE B- SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounting records of the Plan are maintained on the accrual basis.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments, except for the guaranteed insurance contracts (entered
into before December 15, 1993), are stated at fair value. Securities traded on a
national securities exchange are valued at the last reported sales price on the
last business day of the plan year. Investments traded on the over-the-counter
market for which no sale was reported on that date are valued at the average of
the last reported bid and ask prices. The shares of registered investment
companies are valued at the quoted market price which represent the net asset
value of shares held by the Plan at year end. The guaranteed insurance contracts
were valued at contract value as estimated by the insurance companies. Contract
value represents contributions made under the contract, plus interest at the
contract rate, less funds used to pay retirement benefits and to pay for the
insurance companies' administrative expenses. All such contracts were sold
during 1996. Loans to participants are valued at cost which approximates fair
value.
Effective October 21, 1996 and June 30, 1995, the Company's Board of Directors
approved a three-for-two stock split, in the nature of a stock dividend payable
to shareholders of record on October 7, 1996 and June 19, 1995, respectively.
Accordingly, all Common Stock share amounts have been adjusted to reflect the
stock splits.
Purchases and sales of securities are recorded on a trade-date basis. Dividends
are recorded on the ex-dividend date.
The change in the difference between the fair value and the cost of investments
is reflected as net unrealized appreciation (depreciation) in fair value of
investments. The net realized appreciation (depreciation) on investments is the
difference between the proceeds received, after fees and expenses, and the
average cost of investments sold.
ADMINISTRATIVE EXPENSES
All administrative expenses incurred in connection with the operation of the
Plan are paid by the Company.
9
<PAGE>
Savings Incentive Plan of
CUC International Inc.
Notes to Financial Statements (continued)
NOTE C- INVESTMENTS
The fair value of individual investments that represent 5% or more of the Plan's
net assets are as follows:
DECEMBER 31
1996 1995
------------------------------
Neuberger & Berman Ltd. Maturity Bond Fund
1996 - 10,717,650 shares $10,717,650
First Union Evergreen Money Market Fund
1996 - 10,294,216 shares 10,294,216
Fleet Investment Services
Short-term Income Fund
1995 - 6,408,587 shares $ 6,408,587
CUC International Inc.
Common Stock,
1996 - 1,448,017 shares; 34,390,404
1995 - 867,559 shares 29,604,768
NOTE D- PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become fully vested and will receive lump-sum distributions in
an amount equal to the value of their accounts.
NOTE E- DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31
1996 1995
----------------------------
Net assets available for benefits per the
financial statements $95,188,902 $82,860,450
Amounts allocated to withdrawn participants - (3,142,546)
Net assets available for benefits per the ----------------------------
Form 5500 $95,188,902 $79,717,904
----------------------------
----------------------------
10
<PAGE>
Savings Incentive Plan of
CUC International Inc.
Notes to Financial Statements (continued)
NOTE E- DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500 (CONTINUED)
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended December 31
1996 1995
--------------------------
Benefits paid to participants per the
financial statements $ 9,906,492 $10,342,099
Add: Amounts allocated on Form 5500 to withdrawn
participants at December 31, 1996 and 1995 - 3,142,546
Less: Amounts allocated on Form 5500 to withdrawn
participants at December 31, 1995 and 1994 (3,142,546) (374,649)
--------------------------
Benefits paid to participants per the Form 5500 $ 6,763,946 $13,109,996
--------------------------
--------------------------
NOTE F- TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under Section
401(a) of the Internal Revenue Code ("IRC") and, therefore, the related trust is
not subject to tax under present income tax law. Once qualified, the Plan is
required to operate in conformity with the IRC to maintain its qualification.
The Plan sponsor is not aware of any course of action or series of events that
have occurred that might adversely affect the Plan's qualified status.
NOTE G - SUBSEQUENT EVENT
At December 31, 1996, the North American Outdoor Group Retirement Plan (the
"NAOG Plan"), the National Leisure Group, Inc. 401(k) Profit Sharing Plan and
Trust (the "NLG Plan"), and the SafeCard Services, Inc. 401(k) and Profit
Sharing Plan (the "SafeCard Plan") were merged with the Company's Plan. However,
the assets of the NAOG Plan (approximately $3.4 million), the NLG Plan
(approximately $1.0 million), and the SafeCard Plan (approximately $2.4 million)
did not transfer to the Company's Plan until February 1997, March 1997, and
March 1997, respectively.
11
<PAGE>
SCHEDULES
<PAGE>
SAVINGS INCENTIVE PLAN OF
CUC INTERNATIONAL INC.
ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
Identity of Issue, Borrower
or Similar Party Number of Shares Cost Fair Value
- -------------------------------------------------------------------------------
COMMON STOCK
Aetna, Inc. 2,695 shares $ 164,058 $ 215,600
Airtouch Communications Inc. 22,000 shares 589,766 555,500
Authentic Fitness Corp. 40,000 shares 550,807 480,000
Boarders Group Inc. 9,100 shares 192,360 326,463
Buffets Inc. 60,000 shares 669,662 547,500
Capital One Financial Corp. 22,000 shares 368,367 792,000
Cheesecake Factory Inc. 30,000 shares 591,964 543,750
Citicorp 10,000 shares 448,909 1,030,000
CKE Restaurants Inc. 30,000 shares 342,063 1,080,000
Claires Stores, Inc. 35,000 shares 532,177 459,375
Comcast Corp. CL A Special 30,000 shares 479,571 534,390
Comcast U.K. Cable Partners 40,000 shares 469,800 545,000
Coventry Corp. 27,000 shares 496,498 250,182
CUC International Inc.* 1,448,017 shares 21,423,077 34,390,404
ECI Telecom Ltd. 17,000 shares 318,672 361,250
Evergreen Media Corp. 20,000 shares 575,129 500,000
Federated Department Stores 9,500 shares 320,297 324,188
Finova Group Inc. 9,000 shares 274,341 578,250
First USA Inc. 28,000 shares 532,885 969,500
General Nutrition Cos Inc. 55,000 shares 716,064 928,125
Gtech Holdings Corp. 24,000 shares 579,807 768,000
Harrah's Entertainment Inc. 43,000 shares 612,975 854,625
HCIA Inc. 7,700 shares 248,117 265,650
Healthsource Inc. 60,000 shares 994,221 787,500
IHOP Corp. 22,000 shares 519,167 519,750
Informix Corp. 18,000 shares 400,755 366,750
Intel Corp. 9,500 shares 312,268 1,243,911
International Cabletel Inc. 28,000 shares 710,281 707,000
Intibrands Inc. CL A 22,000 shares 385,386 376,750
JDN RLTY Corp. 12,800 shares 294,400 353,600
KLA Instruments Corp. 30,000 shares 762,798 1,065,000
Luxottica Group SPA Sponsored ADR 9,000 shares 366,498 469,125
MBNA Corp. 22,500 shares 224,250 624,375
Micron Technology Inc. 16,300 shares 351,042 474,738
Mid Ocean Club Ltd. 12,000 shares 491,200 630,000
* Indicates party-in-interest to the Plan
<PAGE>
SAVINGS INCENTIVE PLAN OF
CUC INTERNATIONAL INC.
ASSETS HELD FOR INVESTMENT PURPOSES (CONTINUED)
DECEMBER 31, 1996
Identity of Issue, Borrower
or Similar Party Number of Shares Cost Fair Value
- -------------------------------------------------------------------------------
COMMON STOCK (continued)
Morgan Stanley Group Inc. 12,000 shares $ 257,121 $ 685,500
Nellcor Inc. 19,000 shares 450,080 415,625
Nine West Group Inc. 8,000 shares 381,775 371,000
Nu-Kote Holding Inc. 37,600 shares 400,689 385,400
Office Depot Inc. 10,000 shares 192,526 178,750
Philip Morris Cos. Inc. 8,500 shares 542,575 960,500
Players International Inc. 30,000 shares 358,805 161,250
Promus Hotel Corp. 10,500 shares 35,614 311,063
Railtex Inc. 12,000 shares 258,450 303,000
Regis Corp. 28,000 shares 694,943 455,000
SAP Aktiengesellschaft
Sponsored ADR 12,000 shares 563,700 557,484
Scherer RP Corp. Del 7,000 shares 270,187 351,750
Seagate Technology 21,000 shares 498,183 829,500
Showboat Inc. 26,000 shares 482,991 448,500
Sierra Health SVCS. Inc. 13,000 shares 348,587 320,125
Sonic Corp. 16,500 shares 244,497 420,750
Sports & Recreation Inc. 21,000 shares 339,146 162,750
Staples Inc. 35,000 shares 488,440 632,205
Teva Pharmaceutical Industries
Ltd. Adr. 15,000 shares 464,960 753,750
Texas Instruments Inc. 11,500 shares 490,438 733,125
UCAR Intl. Inc. 8,000 shares 304,800 301,000
United Healthcare Corp. 18,000 shares 781,138 810,000
Viking Office Products Inc. 20,000 shares 237,462 533,760
Watson Pharmaceuticals Inc. 16,000 shares 572,828 719,006
Wells Fargo & Co. 4,000 shares 418,122 1,079,000
Xeikon NV Sponsored ADR 40,200 shares 640,495 301,500
--------------------------
$48,028,184 $68,099,544
--------------------------
<PAGE>
Savings Incentive Plan of
CUC International Inc.
Assets Held for Investment Purposes (continued)
December 31, 1996
<TABLE>
<CAPTION>
Description of Investment
Including Maturity Date,
Identity of Issue, Borrower Rate of Interest, Par
or Similar Party or Maturity Value Cost Fair Value
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PREFERRED STOCK
Aetna Inc. PFD CL C 6.25% 898 shares $ 58,651 $ 71,167
SHARES OF REGISTERED INVESTMENT
COMPANIES
Neuberger & Berman LTD Maturity Bond Fund
1,124,622 shares 10,753,138 10,717,650
International Equity Fund
3,343 shares 24,000 43,929
Genesis Fund
3,379 shares 52,101 56,051
First Union Bank Evergreen Money Market Fund
10,294,216 shares 10,294,216 10,294,216
------------------------------
21,123,455 21,111,846
SHORT TERM INVESTMENT FUNDS
Chase Cash Investments Fund $1,148,888 principal amount 1,148,888 1,148,888
Neuberger & Berman Institutional
Daily Income Fd - US Treasury
Portfolio CL A $1,316,700 principal amount 1,316,700 1,316,700
Fleet Investment Services
Short-term Income Fund $ 133,206 principal amount 133,206 133,206
------------------------------
2,598,794 2,598,794
OTHER
Loans to participants Interest rate from 7.5%
to 12%, with terms from 1
to 5 years 2,843,187 2,843,187
------------------------------
Total $74,652,271 $94,724,538
------------------------------
------------------------------
</TABLE>
14
<PAGE>
SAVINGS INCENTIVE PLAN OF
CUC INTERNATIONAL INC.
SCHEDULE OF REPORTABLE TRANSACTIONS
Year ended December 31, 1996
<TABLE>
<CAPTION>
Purchase Selling Cost of Net Gain
Identity of Party Involved Description of Asset Price (a) Price (a) Asset (Loss)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CATEGORY (i)--A SINGLE TRANSACTION IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS
Fleet Investment Services Short-term Income Fund
5,283,938 shares $ 5,283,938 $ 5,283,938
8,301,255 shares $ 8,301,255 8,301,255
10,522,043 shares 10,522,043 10,522,043
Neuberger & Berman LTD Maturity Fund
1,099,023 shares 10,506,658 10,506,658
First Union Bank Evergreen Money Market Fund
10,029,350 shares 10,029,350 10,029,350
CATEGORY (iii)--A SERIES OF SECURITY TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS
Fleet Investment Services Short-term Income Fund
49,928,008 shares 49,928,008 49,928,008
56,203,389 shares 56,203,389 56,203,389
Neuberger & Berman LTD Maturity Fund
1,124,622 shares 10,753,138 10,753,138
First Union Bank Evergreen Money Market Fund
10,294,216 shares 10,294,216 10,294,216
THERE WERE NO CATEGORY (ii) OR (iv) REPORTABLE TRANSACTIONS DURING THE YEAR ENDED DECEMBER 31, 1996.
(a) Purchase and selling prices are equal to aggregate fair value at dates of acquisition and disposition, respectively.
</TABLE>
15
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-80834) pertaining to the Savings Incentive Plan of CUC International
Inc. of our report dated June 27, 1997, with respect to the financial statements
and schedules of the Savings Incentive Plan of CUC International Inc. included
in this Annual Report (Form 11-K) for the year ended December 31, 1996.
ERNST & YOUNG LLP
Stamford, CT
June 27, 1997
