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 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. 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 Audited Financial Statements & and Schedules Savings Incentive Plan of CUC International Inc. December 31, 1996 and 1995 with Report of Independent Auditors 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 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 2
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 ------------------------------------------------------------------------ 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 ----------------------------------------------------------------------- ----------------------------------------------------------------------- DECEMBER 31, 1996 FUND INFORMATION ----------------------------------------------------------------------- INTERNATIONAL MONEY EQUITY GENESIS MARKET LOAN FUND FUND FUND FUND TOTAL ----------------------------------------------------------------------- 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. SAVINGS INCENTIVE PLAN OF CUC INTERNATIONAL INC. STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION See accompanying notes. 3
DECEMBER 31, 1995 FUND INFORMATION ------------------------------------------------------------- CUC FIXED BOND EQUITY STOCK LOAN FUND FUND FUND FUND FUND TOTAL -------------------------------------------------------------------------- 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 ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ 4
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 ------------------------------------------------------------------------- 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 YEAR ENDED DECEMBER 31, 1996 FUND INFORMATION ----------------------------------------------------------------------- INTERNATIONAL MONEY EQUITY GENESIS MARKET LOAN FUND FUND FUND FUND TOTAL ----------------------------------------------------------------------- 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. SAVINGS INCENTIVE PLAN OF CUC INTERNATIONAL INC. STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION SEE ACCOMPANYING NOTES. 5
YEAR ENDED DECEMBER 31, 1995 FUND INFORMATION ------------------------------------------------------------------------------ CUC FIXED BOND EQUITY STOCK LOAN FUND FUND FUND FUND FUND TOTAL ------------------------------------------------------------------------------ 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 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 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 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 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 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 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 SCHEDULES 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 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 -------------------------- Savings Incentive Plan of CUC International Inc. Assets Held for Investment Purposes (continued) December 31, 1996 14
Description of Investment Including Maturity Date, Identity of Issue, Borrower Rate of Interest, Par or Similar Party or Maturity Value Cost Fair Value - ------------------------------------------------------------------------------------------------- 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 ------------------------------ ------------------------------ SAVINGS INCENTIVE PLAN OF CUC INTERNATIONAL INC. SCHEDULE OF REPORTABLE TRANSACTIONS Year ended December 31, 1996 15
Purchase Selling Cost of Net Gain Identity of Party Involved Description of Asset Price (a) Price (a) Asset (Loss) - --------------------------------------------------------------------------------------------------------------------------- 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.
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