<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
[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].
or transition period from ________ to _______
Commission file number: 0-18525
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
CB Commercial Holdings, Inc. Capital Accumulation Plan
------------------------------------------------------
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CB Commercial Real Estate Group, Inc.
533 S. Fremont Avenue
Los Angeles, California 90071
<PAGE>
CB COMMERCIAL HOLDINGS, INC.
CAPITAL ACCUMULATION PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND 1995
TOGETHER WITH AUDITORS' REPORT
<PAGE>
CB COMMERCIAL HOLDINGS, INC.
----------------------------
CAPITAL ACCUMULATION PLAN
-------------------------
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
DECEMBER 31, 1996
-----------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- ----------------------------------------
FINANCIAL STATEMENTS
Statement of Net Assets Available for Plan Benefits by Fund as of December 31,
1996
Statement of Net Assets Available for Plan Benefits by Fund as of December 31,
1995
Statement of Changes in Net Assets Available for Plan Benefits for the year
ended December 31, 1996
NOTES TO FINANCIAL STATEMENTS
SUPPLEMENTAL SCHEDULES
I. Item 27a - Schedule of Assets Held for Investment Purposes as of December
31, 1996
II. Item 27d - Schedule of Reportable Transactions for the year ended
December 31, 1996
III. Item 27b - Schedule of Participant Loans in Default as of December 31,
1996
NOTE: Schedules other than those listed above have been omitted because they
are not applicable or are not required based upon disclosure requirements
of the Employee Retirement Income Security Act of 1974 and the applicable
regulations issued by the Department of Labor.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Investment Advisory Committee of
CB Commercial Holdings, Inc. Capital Accumulation Plan:
We have audited the accompanying statements of net assets available for plan
benefits with fund information of CB COMMERCIAL HOLDINGS, INC. CAPITAL
ACCUMULATION PLAN (the Plan) as of December 31, 1996 and 1995, and the related
statement of changes in net assets available for plan benefits with fund
information for the year ended December 31, 1996. These financial statements
and supplemental schedules with fund information referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and supplemental schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those 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 net assets available for plan benefits as of December
31, 1996 and 1995, and the changes in net assets available for plan benefits for
the year ended December 31, 1996, 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 supplemental schedules listed in the
index to the financial statements are presented for purposes of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of net assets
available for plan benefits and the statement of changes in net assets available
for plan benefits is presented for purposes of additional analysis rather than
to present the net assets available for plan benefits and changes in net assets
available for plan 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.
/s/ARTHUR ANDERSEN LLP
----------------------
ARTHUR ANDERSEN LLP
Los Angeles, California
June 11, 1997
<PAGE>
CB COMMERCIAL HOLDINGS, INC.
CAPITAL ACCUMULATION PLAN
STATEMENT OF ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
Non-
Participant
Directed Participant Directed
----------- -----------------------------------------------------------------------------------------
Common Stock Mutual Funds
------------------------ ----------------------------------------------------------------------------
New
CB CB Equity Capital Prime International America Spectrum
Stock Fund Stock Fund Income Appreciation Reserve Stock Growth Income
Employer Employee Fund Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENTS, (Note 2):
Mutual funds, at fair
market value $ - $ - $37,610,934 $21,428,294 $7,164,560 $11,429,227 $9,613,096 $2,222,423
Common stock, at fair
market value 15,090,060 39,577,794 - - - - - -
Investment contracts,
at contract value - - - - - - - -
Loan receivable - - - - - - - -
----------- ----------- ----------- ----------- ---------- ----------- ---------- ----------
15,090,060 39,577,794 37,610,934 21,428,294 7,164,560 11,429,227 9,613,096 2,222,423
----------- ----------- ----------- ----------- ---------- ----------- ---------- ----------
RECEIVABLES:
Employee contributions - 18,281 133,417 90,075 29,648 53,289 76,664 14,529
Employer contributions 1,872,000 - - - - - - -
Loan and interest
repayments - 332 8,787 6,958 12,962 2,330 3,073 16
----------- ----------- ----------- ----------- ---------- ----------- ---------- ----------
1,872,000 18,613 142,204 97,033 42,610 55,619 79,737 14,545
----------- ----------- ----------- ----------- ---------- ----------- ---------- ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $16,962,060 $39,596,407 $37,753,138 $21,525,327 $7,207,170 $11,484,846 $9,692,833 $2,236,968
=========== =========== =========== =========== ========== =========== ========== ==========
</TABLE>
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------
Investment
Mutual Funds Contracts
--------------------------------------------------- ----------
Science
Equity New and Small-Cap Stable
Index Asia Value Technology Value Value Participant
Fund Fund Fund Fund Fund Loans Total
----------- ----------- ----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENTS, (Note 2):
Mutual funds, at fair
market value $ 3,414.098 $ 4,914,554 $ 5,013,391 $ 6,626,249 $ - $ - $109,436,826
Common stock, at fair
market value - - - - - - 54,667,854
Investment contracts,
at contract value - - - - 14,774,212 - 14,774,212
Loan receivable - - - - - 2,313,028 2,313,028
----------- ----------- ----------- ----------- ------------ ----------- ------------
3,414,098 4,914,554 5,013,391 6,626,249 14,774,212 2,313,028 181,191,920
----------- ----------- ----------- ----------- ------------ ----------- ------------
RECEIVABLES:
Employee contributions 33,393 21,705 54,139 56,137 40,444 - 621,721
Employer contributions - - - - - - 1,872.000
Loan and interest
repayments 733 477 1,817 1,040 4,298 (42,823) -
----------- ----------- ----------- ----------- ------------ ----------- ------------
34,126 22,182 55,956 57,177 44,742 (42,823) 2,493,721
----------- ----------- ----------- ----------- ------------ ----------- ------------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 3,448,224 $ 4,936,736 $ 5,069,347 $ 6,683,426 $14,818,954 $ 2,270,205 $183,685,641
=========== =========== =========== =========== ============ =========== ============
</TABLE>
<PAGE>
CB COMMERCIAL HOLDINGS, INC.
----------------------------
CAPITAL ACCUMULATION PLAN
-------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
-----------------------------------------------------------
AS OF DECEMBER 31, 1995
-----------------------
<TABLE>
<CAPTION>
Non-
Participant
Directed Participant Directed
------------ ---------------------------------------------------------------------------
Common
Stock Mutual Funds
----------------------------- ----------------------------------------------------------
CB CB Equity Capital International
Stock Fund Stock Fund Income Appreciation Prime Stock
Employer Employee Fund Fund Reserve Fund Fund
------------- ------------ ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENTS, (Note 2):
Mutual funds, at fair
market value $ - $ - $29,903,072 $18,919,819 $6,754,394 $8,790,462
Common stock, at fair
market value 6,221,654 21,209,487 - - - -
Investment contracts, at
contract value - - - - - -
Loan receivable - - - - - -
------------ --------------- ----------- ------------ ---------- -------------
6,221,654 21,209,487 29,903,072 18,919,819 6,754,394 8,790,462
------------ --------------- ----------- ------------ ---------- -------------
RECEIVABLES:
Employee contributions - 21,290 127,679 103,735 46,204 54,361
Employer contributions 1,246,467 - - - - -
Loan and interest repayments - 1,037 7,134 21,356 24,822 1,704
------------ --------------- ----------- ------------ ---------- -------------
1,246,467 22,327 134,813 125,091 71,026 56,065
------------ --------------- ----------- ------------ ---------- -------------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $7,468,121 $21,231,814 $30,037,885 $19,044,910 $6,825,420 $8,846,527
============ =============== =========== ============ ========== =============
<CAPTION>
Participant Directed
------------------------------------------------------------------------------
Investment
Mutual Funds Contracts
------------------------------------------------------------------------------ --------------
Equity Science and Stable
New America Spectrum Index New Asia Technology Small-Cap Value
Growth Fund Income fund Fund Value Fund Fund Value Fund Fund
------------- ----------- ---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENTS, (Note 2):
Mutual funds, at fair
market value $6,118,053 $2,051,510 $1,625,069 $3,923,675 $2,622,467 $3,977,470 $ -
Common stock, at fair
market value - - - - - - -
Investment contracts, at
contract value - - - - - - 16,017,525
Loan receivable - - - - - - -
---------- ---------- ---------- ---------- ---------- ---------- --------------
6,118,053 2,051,510 1,625,069 3,923,675 2,622,467 3,977,470 16,017,525
---------- ---------- ---------- ---------- ---------- ---------- --------------
RECEIVABLES:
Employee contributions 55,097 13,058 21,444 24,196 31,096 38,399 45,767
Employer contributions - - - - - - -
Loan and interest repayments 1,871 379 1,030 1,550 1,810 460 2,637
---------- ---------- ---------- ---------- ---------- ---------- --------------
56,968 13,437 22,474 25,746 32,906 38,859 48,404
---------- ---------- ---------- ---------- ---------- ---------- --------------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $6,175,021 $2,064,947 $1,647,543 $3,949,421 $2,655,373 $4,016,329 $16,065,929
========== ========== ========== ========== ========== ========== ==============
<CAPTION>
Participant
Loans Total
-------------- -------------
<S> <C> <C>
INVESTMENTS, (Note 2):
Mutual funds, at fair
market value $ - $ 84,685,991
Common stock, at fair
market value - 27,431,141
Investment contracts, at
contract value - 16,017,525
Loan receivable 2,434,760 2,434,760
------------- ------------
2,434,760 130,569,417
------------- ------------
RECEIVABLES:
Employee contributions - 582,326
Employer contributions - 1,246,467
Loan and interest repayments (60,550) 5,240
------------- ------------
(60,550) 1,834,033
------------- ------------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $2,374,210 $132,403,450
============= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
CB COMMERCIAL HOLDINGS, INC.
CAPITAL ACCUMULATION PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Non-
Participant
Directed Participant Directed
----------- -----------------------------------------------------------------------------------------
Common Stock Mutual Funds
------------------------ ----------------------------------------------------------------------------
New
CB CB Equity Capital Prime International America Spectrum
Stock Fund Stock Fund Income Appreciation Reserve Stock Growth Income
Employer Employee Fund Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning
of year $ 7,468,121 $21,231,814 $30,037,885 $19,044,910 $6,825,420 $ 8,846,527 $6,175,021 $2,064,947
ADDITIONS
Employee contributions 549,697 2,642,052 1,897,127 730,673 1,256,666 1,413,325 364,536
Employer contributions 1,903,639 - - - -
Loan repayments 38,071 353,909 175,620 290,288 101,465 75,753 14,442
Investment income:
Dividends or interest 14,094 2,369,451 2,014,709 326,032 306,510 816,370 168,993
Loan interest - 5,562 40,469 26,841 44,655 10,806 12,352 2,407
Realized & unrealized
gains/losses 7,850,069 20,369,420 3,971,790 1,151,980 - 1,218,041 633,371 (4,543)
Westmark Plan Assets
transferred in 1,555,297 238,386 63,890 76,981 92,489
----------- ----------- ----------- ----------- ---------- ----------- ---------- ----------
Total additions 9,753,708 20,976,844 10,932,568 5,504,663 1,455,538 2,970,469 2,951,171 638,324
----------- ----------- ----------- ----------- ---------- ----------- ---------- ----------
DEDUCTIONS
Distributions to
participants 507,879 1,984,367 2,384,234 1,084,572 910,602 706,451 376,667 61,212
Withdrawals - 20,706 5,889 14,496 1,994 7,968 8,125
Loan withdrawals 2,116 388,052 250,872 191,440 70,058 136,098 26,757
Other 32,272 5,695 (100) (43) - (30) (28) -
---------- ----------- ----------- ----------- ---------- ----------- ---------- ----------
Total deductions 540,151 1,992,178 2,792,892 1,341,290 1,116,538 778,473 520,705 96,094
---------- ----------- ----------- ----------- ---------- ----------- ---------- ----------
Net transfers in/(out) 280,382 (620,073) (424,423) (1,682,956) 42,750 446,323 1,087,346 (370,209)
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $16,962,060 $39,596,407 $37,753,138 $21,525,327 $7,207,170 $11,484,846 $9,692,833 $2,236,968
=========== =========== =========== =========== ========== =========== ========== ==========
</TABLE>
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------
Investment
Mutual Funds Contracts
--------------------------------------------------- ----------
Science
Equity New and Small-Cap Stable
Index Asia Value Technology Value Value Participant
Fund Fund Fund Fund Fund Loans Total
----------- ----------- ----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR
PLAN BENEFITS, beginning
of year $ 1,647,543 $ 3,949,421 $ 2,655,373 $ 4,016,329 $ 16,065,929 $ 2,374,210 $132,403,450
ADDITIONS
Employee contributions 562,529 600,538 1,006,615 982,280 850,632 12,856,670
Employer contributions - - - - - 1,903,639
Loan repayments 22,495 54,438 41,683 41,553 130,708 (1,340,425) -
Investment income:
Dividends or interest 102,238 37,899 542,222 328,313 915,746 - 7,942,577
Loan interest 3,596 6,496 7,734 4,946 21,248 - 186,712
Realized & unrealized
gains/losses 407,052 520,642 (70,158) 834,644 - - 36,882,308
Westmark Plan Assets
transferred in 87,424 348,674 - 2,463,141
----------- ----------- ----------- ----------- ------------ ------------ ------------
Total additions 1,097,910 1,220,013 1,528,096 2,279,160 2,267,008 (1,340,425) 62,235,047
----------- ----------- ----------- ----------- ------------ ------------ ------------
DEDUCTIONS
Distributions to
participants 207,756 201,622 208,209 348,645 1,509,930 - 10,492,146
Withdrawals - 11,730 6,879 115,527 229,704 423,018
Loan withdrawals 15,289 27,675 50,846 50,499 256,422 (1,466,124) -
Other (4) (2) (34) 34 - 37,692
----------- ----------- ----------- ----------- ------------ ------------ ------------
Total deductions 223,041 229,295 270,751 405,989 1,881,879 (1,236,420) 10,952,856
----------- ----------- ----------- ----------- ------------ ------------ ------------
Net transfers in/(out) 925,812 (3,403) 1,156,629 793,926 (1,632,104) - -
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 3,448,224 $ 4,936,736 $ 5,069,347 $ 6,683,426 $14,818,954 $ 2,270,205 $183,685,641
=========== =========== =========== =========== =========== =========== ============
</TABLE>
<PAGE>
CB COMMERCIAL HOLDINGS, INC.
----------------------------
CAPITAL ACCUMULATION PLAN
-------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1996
-----------------
1. Description of the Plan
-----------------------
The following is a summary description of the CB Commercial Holdings, Inc.
Capital Accumulation Plan (the "Plan"), which is sponsored by CB Commercial Real
Estate Services Group, Inc. formerly, CB Commercial Holdings, Inc. (together
with its subsidiaries, "CB" or the "Company"). Participants should refer to the
Plan document for a further description of the provisions of the Plan.
General
-------
The Plan is a defined contribution plan, which provides retirement benefits
for eligible employees of the Company who elect to participate. It became
effective on April 19, 1989, and is a spin-off from the Coldwell Banker
Real Estate Group Capital Accumulation Plan (the Prior Plan). The Plan
covers substantially all employees of the Company and the Investment
Advisory Committee believes it is designed to qualify under Sections 401(a)
and 401(k) of the Internal Revenue Code of 1986 (the Code). The Plan is
also subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA) as amended.
Effective July 1, 1996, any employee may participate in the Plan upon such
employee's (i) completion of one hour of service and (ii) attainment of age
21.
In April 1996, the Westmark Realty Advisors 401(k) Retirement Plan was
merged into the Plan. Assets totaling approximately $2,463,000 were
transferred to the Plan.
Administration
--------------
The Plan is administered by the Investment Advisory Committee (the
"Committee" or the "Plan Administrator") appointed by the Chief Executive
Officer of the Company. The Committee has been given all powers necessary
to carry out its duties, including, but not limited to, the power to
administer and interpret the Plan, to answer all questions affecting
eligibility of participants in the Plan and to authorize disbursements for
the payment of Plan benefits.
Trustee, Custodian and Fund Manager of Investments
--------------------------------------------------
T. Rowe Price Trust Company (the Trustee), together with its affiliates,
serves as trustee, custodian and fund manager of the Plan investments. The
Trustee is the primary recordkeeper for the Plan, determines the value of
Plan investments, other than the value of the CB Stock Fund, and is
regularly required to provide an accounting of all receipts, disbursements
and transactions made on behalf of the Plan.
<PAGE>
-2-
Contributions and Investment Selections
- ---------------------------------------
Participants in the Plan who are not highly compensated employees, as
defined in the Plan, may elect to contribute from 1 to 15 percent of
compensation before taxes through compensation deferrals. The percentage
of compensation for contributions of highly compensated employees may be
limited by the Committee and is currently limited to 5 percent of their
pretax compensation. The Company may make discretionary matching and
profit sharing contributions to the Plan in such amounts as determined by
the Board of Directors. Each participant may select the investment fund(s)
in which employee contributions will be invested. Currently, the
investment selections include the funds listed below.
a. CB Stock Fund (CB) - consists of investment in common stock of CB
Commercial Real Estate Services Group, Inc. Prior to November 25,
1996, CB Stock was not publicly traded. Subsequent to the
commencement of public trading of CB Stock pursuant to an initial
public offering and through May 25, 1997, sales and purchases of CB
stock by Plan participants were not permitted.
b. Equity Income Fund - managed by T. Rowe Price, consists of investments
in stocks, bonds and other cash equivalents selected with the
objective of providing reasonable growth in value.
c. Capital Appreciation Fund - managed by T. Rowe Price, consists of
investments in stocks of companies in varied industries selected with
the objective of providing growth in value through a more aggressive
investment approach than the Equity Income Fund.
d. Prime Reserve Fund - managed by T. Rowe Price, consists of investments
in commercial paper, corporate notes and other short-term investments.
e. International Stock Fund - managed by T. Rowe Price, consists of
investments in marketable securities of non-United States issuers.
The fund seeks a total return on its assets from long term growth of
capital and income.
f. New America Growth Fund - managed by T. Rowe Price, primarily consists
of investments in stocks of companies in service industries.
g. Spectrum Income Fund - managed by T. Rowe Price, consists of
investments in underlying funds which have invested in bonds, money-
market funds, stocks, international bonds, and high-yield bonds.
h. Equity Index Fund - managed by T. Rowe Price, is modeled after the S&P
500 Index and consists of investments in companies which are included
in the S&P 500 Index.
i. New Asia Value Fund - managed by T. Rowe Price, consists of
investments in large and small capitalization companies based in Asia
(excluding Japan) and other regions of the Pacific Basin, including
Australia and New Zealand.
j. Science and Technology Fund - managed by T. Rowe Price, primarily
consists of investments in stocks of companies in the science and
electronics industries.
<PAGE>
-3-
k. Small-Cap Value Fund - managed by T. Rowe Price, primarily consists of
investments in stocks of small companies that are believed to be
undervalued.
l. Stable Value Fund, formerly the Managed Guaranteed Investment Contract
Fund - managed by T. Rowe Price, consists of investments in guaranteed
investment contracts, bank investment contracts, and structured
investment contracts.
Participants' Accounts
----------------------
Each participant account is credited with an allocation of Company
contributions, investment earnings or losses and forfeitures of terminated
participants' nonvested accounts. Allocation of earnings on any of the
investment funds, except for CB funds, is based on each participant's
balance in the investment fund as compared to the total participants'
balance in such fund as of the preceding valuation date. Dividends on CB
stock are allocated based on the number of shares a participant holds.
Earnings on CB funds are invested at the designation of the Committee in
one of the investment funds listed above. Allocations of forfeitures of
Company contributions are based on each participant's pre-tax voluntary
contributions as compared to the total pre-tax voluntary contributions of
all participants, subject to a certain threshold, for a Plan year, as
defined in the Plan.
Vesting
-------
Participants are at all times 100 percent vested in their accounts, except
for amounts contributed by the Company and earnings thereon. Vesting in
amounts contributed by the Company and related earnings is based upon the
occurrence of the earliest of the following:
a. 100 percent upon Plan termination.
b. 100 percent upon participant attaining age 65, death or disability.
c. for participants who commenced employment prior to January 1, 1989,
zero percent for less than four years of vesting service, as defined
in the Plan, 10 percent for four years of vesting service and 100
percent for five or more years of vesting service.
d. for participants who commenced employment after January 1, 1989, zero
percent for less than five years of vesting service and 100 percent
for five or more years of vesting service.
Benefit Payments and Withdrawals
--------------------------------
Participants are entitled to the vested portion of their accounts upon
attaining age 65, termination of employment, disability or death. The Plan
also provides for withdrawals due to hardship from the fully vested
employee contributions, subject to certain limitations.
Loans
-----
Participants may elect to borrow funds from the vested portion of their
accounts. Such loan principal and related interest are payable by the
Participants back to their Plan accounts over a period not to exceed 36
months from the date of withdrawal. The interest rate on such loans is the
prime rate as determined by the Plan plus 2 percent.
<PAGE>
-4-
2. Summary of Significant Accounting Policies
------------------------------------------
Basis of Accounting
-------------------
For financial reporting purposes, the financial statements have been
prepared on the accrual basis of accounting.
Investments
-----------
The valuation of investments is the responsibility of the Plan
Administrator as indicated in the Plan document. Plan investments included
in the statements of net assets available for Plan benefits, excluding the
participant loan fund and investment contracts, are stated at fair market
value as of December 31, 1996 and 1995.
Prior to the initial public offering on November 25, 1996, CB stock was not
traded on an established exchange and historically there has been a limited
amount of trading between eligible buyers and sellers of such stock.
Accordingly, the fair value of CB stock before the initial public offering
was determined by the Plan Administrator who utilized the services of an
independent appraiser. The fair value is defined as the price at which the
stock would change hands between a willing, able and well informed buyer
and seller, neither of which are under any compulsion to buy or sell.
Although the purpose of an independent appraisal is to estimate fair value,
those estimated values may differ from the value that would have been used
had an actively traded market for the securities existed and may be
different from the prices obtained in limited trading between eligible
buyers and sellers. The value of the CB Stock determined by the Plan
Administrator was $9.94 as of December 31, 1995. The value of the CB stock
at December 31, 1996 was $20.00, representing the latest quoted price at
that date on the stock exchange on which it trades. The change in the
estimated market price of the CB stock prior to the initial public offering
and the price after the offering has been reflected on the accompanying
statement of changes in net assets available for plan benefits as
unrealized gains.
The Stable Value Fund is stated at contract value which represents
contributions plus interest accrued at the contract rate, less withdrawals
and fees. Contract value generally approximates fair value. The interest
rate as of December 31, 1996 was 6.18%. The average yield for the year
ended December 31, 1996 and 1995 was 6.22% and 6.31%, respectively. In
general, the interest rates are fixed through maturity, except for
investments in Synthetic Investment Contracts that comprise approximately
38% of the Fund whose rates are reset quarterly based on the market value
of the underlying securities. The Fund represented approximately 8% of the
Net Assets Available for Plan Benefits as of December 31, 1996.
For assets purchased during 1996, the difference between the cost and
market value of investments as of December 31, 1996 represents the net
unrealized gain or loss on investments. For assets purchased prior to
1995, the difference of the market values of investments between December
31, 1995 and December 31, 1996 represents the net unrealized gain or loss
on investments.
As of December 31, 1996 approximately 69% of the Plan's investments are
invested in T. Rowe Price managed funds.
<PAGE>
-5-
Benefits Payable
- ----------------
As of December 31, 1996, benefits payable to withdrawing participants is
approximately $1,000, which is included in Net Assets Available for Plan
Benefits.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts in the financial statements
during the reporting period and disclosure of contingent assets and
liabilities at the date of the financial statements. Actual results could
differ from those estimates.
3. Federal Income Tax Status
-------------------------
The Plan obtained its determination letter from the Internal Revenue Service on
March 8, 1996, subject to the adoption of certain amendments. These amendments
were adopted subsequent to the determination date. At that time, the Plan was
deemed to be designed to satisfy the tax exempt requirements of the Internal
Revenue Code. The Committee is of the opinion that the Plan is currently
designed and is being operated in compliance with all applicable provisions of
the Internal Revenue Code. Therefore, the Committee believes that the Plan was
qualified and the related trust was tax-exempt as of the financial statement
dates.
4. Plan Termination
----------------
Although it has not expressed any intent to do so, the Company has the right
under the Plan to amend the Plan or to discontinue its contributions at any time
and to terminate the Plan subject to the provisions of ERISA. Upon complete
discontinuance of the employer's contributions or Plan termination, participants
will become fully vested in their account balances.
5. Employer Contributions
----------------------
The Company authorized a discretionary matching contribution of $1,872,000 for
1996, which resulted in a contribution of 82,740 shares of CB stock based on the
value of the stock at the date of issuance, which was February 4, 1997. For
1995, the Company authorized a discretionary matching contribution of
$1,246,467, which resulted in a contribution of 125,389 shares of CB stock. At
December 31, 1995, the value assigned to the shares contributed was $9.94 as
determined by an independent appraiser.
6. Schedules to Financial Statements
---------------------------------
The schedules required by Section No. 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under ERISA have been
prepared reflecting assets held for investment and participant loans in default
as of December 31, 1996 and certain transactions entered into by the Plan for
the year ended December 31, 1996.
<PAGE>
-6-
7. Administrative Expenses
-----------------------
Expenses directly related to the administration of the Plan are paid out of Plan
assets. However, the Company may elect to pay for some of these expenses.
During 1996, the Company elected to pay all Plan expenses, which amounted to
approximately $52,000. These expenses are not reflected in the accompanying
financial statements.
8. Subsequent Events
-----------------
Effective January 1, 1997, Plan Participants were offered the following
additional T. Rowe Price funds as investment choices: Mid-Cap Growth Fund,
Spectrum Growth Fund, and the Blue Chip Growth Fund.
<PAGE>
SCHEDULE I
E.I.N. No. 52-1616016
Plan No. 001
CB COMMERCIAL HOLDINGS, INC.
----------------------------
CAPITAL ACCUMULATION PLAN
-------------------------
Item 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
AS OF DECEMBER 31, 1996
-----------------------
<TABLE>
<CAPTION>
Identity of Issue, Borrower, Description of Investment Including Maturity Date,
Lessor or Similar Party Rate of Interest, Collateral, Par or Maturity Value
- ------------------------------ ----------------------------------------------------------------------
<S> <C>
CB Stock Fund 2,716,728 shares of CB Common Stock,
332,673 units of U.S. Treasury Fund
Equity Income Fund 1,668,631 units of T. Rowe Price Equity Income Fund
Capital Appreciation Fund 1,480,877 units of T. Rowe Price Capital Appreciation Fund
Prime Reserve Fund 7,164,560 units of T. Rowe Price Prime Reserve Fund
International Stock Fund 828,205 units of T. Rowe Price International Stock Fund
New America Growth Fund 250,537 units of T. Rowe Price New America Growth Fund
Spectrum Income Fund 198,431 units of T. Rowe Price Spectrum Income Fund
Equity Index Fund 167,851 units of T. Rowe Price Equity Index Fund
New Asia Value Fund 530,729 units of T. Rowe Price New Asia Fund
Science and Technology Fund 168,744 units of T. Rowe Price Science Technology Fund
Small-CAP Value Fund 338,765 units of T. Rowe Price Small-CAP Value Fund
Stable Value Fund 14,774,212 units of T. Rowe Price Bank Collective Investment Fund,
investing in contracts bearing interest of 4.75% to 9.63% with various
maturities between January 1997 and February 2016
Participant Loans Loans Receivable with interest rates ranging from 8.00 percent to
11.00 percent for the year ended December 31, 1996
----------------------------------------------------------------------
<CAPTION>
Identity of Issue, Borrower,
Lessor or Similar Party Cost Fair Value
- ------------------------------ ------------ ------------
<S> <C> <C>
CB Stock Fund $ 22,811,345 $ 54,335,181
332,673 332,673
Equity Income Fund 27,884,826 37,610,934
Capital Appreciation Fund 18,297,969 21,428,294
Prime Reserve Fund 7,164,560 7,164,560
International Stock Fund 9,650,965 11,429,227
New America Growth Fund 8,131,230 9,613,096
Spectrum Income Fund 2,177,714 2,222,423
Equity Index Fund 2,888,228 3,414,098
New Asia Value Fund 4,814,746 4,914,554
Science and Technology Fund 5,215,672 5,013,391
Small-CAP Value Fund 5,550,659 6,626,249
Stable Value Fund
14,774,212 14,774,212
Participant Loans
2,313,028 2,313,028
------------ ------------
Total Investments $132,007,827 $181,191,920
============ ============
</TABLE>
12
<PAGE>
SCHEDULE II
E.I.N. No. 52-1616016
Plan No. 001
CB COMMERCIAL HOLDINGS, INC.
----------------------------
CAPITAL ACCUMULATION PLAN
-------------------------
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
----------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1996
------------------------------------
<TABLE>
<CAPTION>
Identity of Party Description Purchase Selling Lease
Involved of Assets Price Price Rental
- ----------------------------- ------------ --------- --------- ------
<S> <C> <C> <C> <C>
T. Rowe Price Purchased 446,503 units of T. Rowe Price 8,035,544 - N/A
Equity Income Fund Mutual Fund @ floating market prices*
T. Rowe Price Sold 254,000 units of T. Rowe Price Mutual Fund 4,727,399 5,860,210 N/A
Equity Income Fund @ floating market prices*
T. Rowe Price Purchased 3,806,551 units of T. Rowe Price 3,806,551 - N/A
Prime Reserve Fund Mutual Fund @ fixed and market prices*
T. Rowe Price Sold 3,625,359 units of T. Rowe Price 3,625,359 3,625,359 N/A
Prime Reserve Fund Mutual Fund @ fixed and market prices*
T. Rowe Price Purchased 351,127 units of T. Rowe Price 4,863,566 - N/A
Capital Appreciation Fund Mutual Fund @ floating market prices*
T. Rowe Price Sold 254,289 units of T. Rowe Price Mutual Fund 3,107,363 3,745,543 N/A
Capital Appreciation Fund @ floating market prices*
<CAPTION>
Identity of Party Expense Incurred Cost of Current Value of Asset Net Gain
Involved With Transsaction Asset on Transaction Date or (Loss)
- ----------------------------- ----------------- --------- ------------------- ----------
<S> <C> <C> <C> <C>
T. Rowe Price - 8,035,544 8,035,544 -
Equity Income Fund
T. Rowe Price - 4,727,399 5,860,210 1,132,811
Equity Income Fund
T. Rowe Price - 3,806,551 3,806,551 -
Prime Reserve Fund
T. Rowe Price - 3,625,359 3,625,359 -
Prime Reserve Fund
T. Rowe Price - 4,863,566 4,863,566 -
Capital Appreciation Fund
T. Rowe Price - 3,107,363 3,745,543 638,180
Capital Appreciation Fund
</TABLE>
*Denotes party-in-interest transactions
<PAGE>
SCHEDULE III
E.I.N. No. 52-1616016
Plan No. 001
CB COMMERCIAL HOLDINGS, INC.
----------------------------
CAPITAL ACCUMULATION PLAN
-------------------------
Item 27b - SCHEDULE OF PARTICIPANT LOANS IN DEFAULT
---------------------------------------------------
AS OF DECEMBER 31, 1996
-----------------------
<TABLE>
<CAPTION>
Amount Received
Original Loan Inception
Social Loan ----------------------- Unpaid Issue Interest
Name Security # Amount Principal Interest Balance Date Rate
- ----------------------------- ----------- ----------- ----------- ---------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Ahee, F.D. ###-##-#### $ 5,000.00 $ 0.00 $ 0.00 $ 5,000.00 10/28/92 8.00%
Arcisz, Joseph J. ###-##-#### 5,000.00 0.00 0.00 5,000.00 11/30/93 8.00%
Bonanomi, Robert A. ###-##-#### 50,000.00 19,302.26 4,373.44 30,697.74 2/14/92 8.50%
Bowman, Kenneth M. ###-##-#### 4,140.00 2,053.78 429.33 2,086.22 5/11/92 8.50%
Burke, Daniel J. ###-##-#### 1,100.00 0.00 0.00 1,100.00 4/20/92 8.50%
Cajka, Timothy J. ###-##-#### 11,000.00 4,867.56 992.34 5,522.79 9/23/93 8.00%
Dalton, Gregory M. ###-##-#### 18,000.00 6,948.87 1,574.43 11,051.13 2/21/92 8.50%
Dudley, Mac M. ###-##-#### 8,237.65 1,029.75 260.95 7,207.90 1/27/93 8.00%
Garland, Glenn A. ###-##-#### 4,196.00 1,734.10 385.26 2,461.90 7/23/92 8.50%
Giglio, Gerald F. ###-##-#### 2,846.00 0.00 0.00 2,846.00 7/17/92 8.50%
Hawks, Jeffrey ###-##-#### 7,850.90 0.00 0.00 7,850.90 8/3/95 10.75%
Hixson III, Rob M. ###-##-#### 14,465.29 3,677.53 855.37 10,787.76 9/16/92 8.00%
Hovdesven, Steven O. ###-##-#### 24,710.00 4,217.92 1,404.06 20,492.08 2/3/95 10.50%
Howatt, William C. ###-##-#### 6,000.00 2,809.78 599.60 3,190.22 4/23/92 8.50%
Jamerson, James F. ###-##-#### 6,500.00 1,985.98 476.30 4,514.02 3/26/92 8.50%
Kinetz, James V. ###-##-#### 20,000.00 18,132.45 2,702.10 1,867.55 6/12/92 8.50%
Larson, Mark ###-##-#### 25,000.00 8,867.58 2,384.92 16,132.42 9/23/94 9.75%
Lehman, Lester O. ###-##-#### 35,000.00 4,375.13 1,108.72 30,624.87 1/24/92 8.00%
Miller, Harry M. #1 ###-##-#### 10,000.00 2,790.77 661.70 7,209.23 4/13/92 8.50%
Miller, Harry M. #2 ###-##-#### 12,000.00 3,348.84 818.07 8,651.16 7/2/92 8.50%
Petti, Paul C. ###-##-#### 2,821.78 0.00 0.00 2,821.78 10/8/94 9.75%
Potts III, James I. ###-##-#### 9,500.00 1,374.79 491.33 8,125.21 5/25/95 11.00%
Schirmer, Kurt R. ###-##-#### 12,200.00 0.00 0.00 12,200.00 2/27/92 8.50%
Schuen, Richard B. ###-##-#### 1,200.00 528.80 115.16 671.20 3/26/92 8.50%
Taylor, Robert J. ###-##-#### 4,750.00 465.28 141.12 4,284.72 7/28/94 9.25%
Toone, David B. ###-##-#### 16,365.00 0.00 0.00 16,365.00 3/6/95 11.00%
Wankier, Weldon ###-##-#### 50,000.00 0.00 0.00 50,000.00 5/11/92 8.50%
Warling, Neal R. ###-##-#### 14,484.00 5,527.26 1,457.64 8,956.74 11/14/94 9.75%
Whitney Jr., David G. ###-##-#### 7,408.89 530.65 194.39 6,878.24 8/21/95 10.75%
Wilson, Ben F. ###-##-#### 10,000.00 1,241.71 336.69 8,758.29 6/12/92 8.50%
Wirth, David H. ###-##-#### 5,000.00 3,931.83 611.89 1,068.17 7/16/93 8.00%
----------- ----------- ---------- ---------- ----------- -------- -----
$404,775.51 $99,742.62 $22,374.81 $304,423.24
=========== ========== ========== ===========
<CAPTION>
Amount overdue
-----------------------
Name Collateral Principal Interest
- ----------------------------- ---------- ----------- -----------
<S> <C> <C> <C>
Ahee, F.D. Participant Balance $ 5,000.00 $ 400.00
Arcisz, Joseph J. Participant Balance 5,000.00 400.00
Bonanomi, Robert A. Participant Balance 30,697.74 2,609.31
Bowman, Kenneth M. Participant Balance 2,086.22 177.33
Burke, Daniel J. Participant Balance 1,100.00 93.50
Cajka, Timothy J. Participant Balance 5,522.79 359.65
Dalton, Gregory M. Participant Balance 11,051.13 939.35
Dudley, Mac M. Participant Balance 7,207.90 576.63
Garland, Glenn A. Participant Balance 2,461.90 209.26
Giglio, Gerald F. Participant Balance 2,846.00 241.91
Hawks, Jeffrey Participant Balance 7,850.90 465.03
Hixson III, Rob M. Participant Balance 10,787.76 863.02
Hovdesven, Steven O. Participant Balance 20,492.08 1,751.46
Howatt, William C. Participant Balance 3,190.22 271.17
Jamerson, James F. Participant Balance 4,514.02 383.69
Kinetz, James V. Participant Balance 1,867.55 158.74
Larson, Mark Participant Balance 16,132.42 866.67
Lehman, Lester O. Participant Balance 30,624.87 2,449.99
Miller, Harry M. #1 Participant Balance 7,209.23 612.78
Miller, Harry M. #2 Participant Balance 8,651.16 735.35
Petti, Paul C. Participant Balance 2,821.78 275.12
Potts III, James I. Participant Balance 8,125.21 512.13
Schirmer, Kurt R. Participant Balance 12,200.00 1,037.00
Schuen, Richard B. Participant Balance 671.20 57.05
Taylor, Robert J. Participant Balance 4,284.72 396.34
Toone, David B. Participant Balance 16,365.00 1800.15
Wankier, Weldon Participant Balance 50,000.00 4,250.00
Warling, Neal R. Participant Balance 8,956.74 500.39
Whitney Jr., David G. Participant Balance 6,878.24 423.68
Wilson, Ben F. Participant Balance 8,758.29 744.45
Wirth, David H. Participant Balance 1,068.17 48.97
----------- -----------
$304,423.24 $24,610.12
=========== ===========
</TABLE>
14
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
- --------
the plan administrator has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
CB Commercial Real Estate Group, Inc., as
Plan Administrator of the CB Commercial
Holdings, Inc. Capital Accumulation Plan
Date: June 25, 1997 By: /s/ Ronald J. Platisha
-------------------------
Ronald J. Platisha
Executive Vice President
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated June 11, 1997 included in this Form 11-K into the
Company's previously filed Registration Statements: Form S-8 (File No.
33-39436), Form S-8 (File No. 33-40953), Form S-8 (File No. 33-44346), Form S-8
(File No. 33-73236), Form S-8 (File No. 33-90014), Form S-8 (File No. 333-21597)
and Form S-8 (File No. 333-21599).
/s/ARTHUR ANDERSEN LLP
----------------------
ARTHUR ANDERSEN LLP
Los Angeles, California
June 26, 1997
