UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended April 30, 1996 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 1-10308 CUC International Inc. (Exact name of registrant as specified in its charter) Delaware 06-0918165 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 707 Summer Street Stamford, Connecticut 06901 (Address of principal executive offices) (Zip Code) (203) 324-9261 (Registrant's telephone number, including area code) Not applicable (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No . APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.01 par value - 191,537,342 shares as of May 31, 1996 INDEX CUC INTERNATIONAL INC. AND SUBSIDIARIES PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets - April 30, 1996 and January 31, 1996. 3 Condensed Consolidated Statements of Income - Three months ended April 30, 1996 and 1995. 4 Condensed Consolidated Statements of Cash Flows - Three months ended April 30, 1996 and 1995. 5 Notes to Condensed Consolidated Financial Statements. 6 Independent Accountants' Review Report. 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 13 Item 6. Exhibits and Reports on Form 8-K 14 SIGNATURES 17 INDEX TO EXHIBITS 18 PART I. FINANCIAL INFORMATION CUC INTERNATIONAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) April 30, January 31, 1996 1996 Assets (Unaudited) Current Assets Cash and cash equivalents $286,344 $269,987 Receivables 305,380 297,842 Prepaid membership materials 42,302 39,061 Prepaid expenses, deferred taxes and other 105,702 100,104 Total Current Assets 739,728 706,994 Membership solicitations in process 61,663 60,713 Deferred membership acquisition costs 278,001 273,102 Contract renewal rights and intangible assets - net of accumulated amortization of $97,448 and $92,415 281,545 276,047 Properties, at cost, less accumulated depreciation of $77,698 and $73,575 65,491 61,441 Deferred income taxes and other 40,243 36,111 $1,466,671 $1,414,408 Liabilities and Shareholders' Equity Current Liabilities Accounts payable and accrued expenses $101,107 $124,902 Federal and state income taxes payable 12,887 24,943 Total Current Liabilities 113,994 149,845 Deferred membership income, net 523,233 513,219 Zero coupon convertible notes - net of unamortized original issue discount of $178 and $588 14,709 14,410 Other 9,164 9,722 Shareholders' Equity Common stock-par value $.01 per share; authorized 400 million shares; issued 194,381,429 shares and 191,820,896 shares 1,944 1,918 Additional paid-in capital 370,389 323,704 Retained earnings 482,657 434,407 Treasury stock, at cost, 3,868,011 shares and 3,410,631 shares (48,161) (30,998) Foreign currency translation (1,258) (1,819) Total Shareholders' Equity 805,571 727,212 $1,466,671 $1,414,408 See notes to condensed consolidated financial statements. CUC INTERNATIONAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In thousands, except per share amounts) Three Months Ended April 30, 1996 1995 REVENUES Membership and service fees and other $390,026 $325,114 Total Revenues 390,026 325,114 EXPENSES Operating 105,801 89,186 Marketing 151,962 128,520 General and administrative 54,408 48,709 Interest income, net (805) (348) Total Expenses 311,366 266,067 INCOME BEFORE INCOME TAXES 78,660 59,047 Provision for income taxes 30,410 23,001 NET INCOME $48,250 $36,046 Net Income Per Common Share $0.25 $0.19 Weighted Average Number of Common and Dilutive Common Equivalent Shares Outstanding 196,736 192,371 See notes to condensed consolidated financial statements. CUC INTERNATIONAL INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) APRIL 30, THREE MONTHS ENDED 1996 1995 OPERATING ACTIVITIES: Net income $48,250 $36,046 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Membership acquisition costs (122,372) (83,874) Amortization of membership acquisition costs 117,473 97,205 Deferred membership income 9,776 (10,762) Membership solicitations in process (950) (4,659) Amortization of contract renewal 5,033 4,503 rights and excess cost Deferred income taxes (2,007) 3,784 Amortization of original issue discount on convertible notes 406 426 Depreciation 4,287 3,765 Changes in working capital items, net of acquisitions: Increase in receivables (7,538) (13,725) (Increase) decrease in prepaid membership materials (3,241) 2,130 Increase in prepaid expenses (5,598) (11,323) Net decrease in accounts payable & accrued expenses and federal & state income taxes payable (13,235) (20,746) Other, net (1,987) (2,852) Net cash provided by (used in) operating activities 28,297 (82) INVESTING ACTIVITIES: Acquisitions, net of cash acquired (10,668) (51,172) Acquisitions of properties (7,962) (7,617) Net cash used in investing activities (18,630) (58,789) FINANCING ACTIVITIES: Issuance of Common Stock 5,463 10,017 Repayments of long-term obligations 1,227 378 Net cash provided by financing activities 6,690 10,395 Net increase (decrease) in cash and cash equivalents 16,357 (48,476) Cash and cash equivalents at beginning of period 269,987 209,054 Cash and cash equivalents at end of period $286,344 $160,578 See notes to condensed consolidated financial statements. CUC INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 -- BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended April 30, 1996 are not necessarily indicative of the results that may be expected for the year ending January 31, 1997. For further information, refer to the financial statements and footnotes thereto included in the Company's Form 10-K filing for the year ended January 31, 1996. The condensed consolidated financial statements at April 30, 1996 and for the three months ended April 30, 1996 and 1995 are unaudited, but have been reviewed by independent accountants and their report is included herein. Certain balance sheet amounts were reclassified to conform with the April 30, 1996 presentation. NOTE 2 -- MERGERS AND ACQUISITIONS During February 1996, the Company entered into two separate Agreements and Plans of Merger to acquire Davidson & Associates, Inc. ("Davidson") and Sierra On-Line, Inc. ("Sierra") (collectively, the "Software Mergers"). Under the terms of the respective agreements, the Company plans to issue .85 of one share of its common stock, par value $.01 per share ("Common Stock") for each share of Davidson common stock issued and outstanding and 1.225 shares of its Common Stock for each share of Sierra common stock issued and outstanding, immediately prior to the respective effective dates of the Software Mergers. The consummations of the Software Mergers are subject to certain customary closing conditions, including the approval of the holders of Davidson and Sierra common stock, respectively. Additionally, the Boards of Directors of Davidson and Sierra have the right (but are not required) to terminate the respective merger agreements if the average price per share of the Company's Common Stock in specified periods prior to their respective stockholders' meetings is below $29. Neither transaction is contingent upon the consummation of the other transaction. The transactions will be accounted for under the pooling-of-interests method of accounting and are expected to be completed during the second quarter of fiscal 1997. During April 1996, the Company entered into an Agreement and Plan of Merger to acquire Ideon Group, Inc. ( the "Ideon Merger"). In the Ideon Merger, each share of Ideon Group, Inc. ("Ideon") common stock outstanding on the effective date of the Ideon Merger will be converted into Common Stock at a value of $13.50 per share, subject to certain adjustments if the average stock price of a share of Common Stock falls outside of a specified range. The consummation of the Ideon Merger is subject to certain customary closing conditions, including the approval of the holders of Ideon common stock. The Company expects upon closing of the Ideon Merger to reserve for costs to be incurred related to the Ideon Merger, which will include integration and transaction costs as well as costs relating to certain outstanding litigation matters previously discussed in Ideon's public filings. This transaction will be accounted for under the pooling-of-interests method of accounting and is expected to be completed during the second or third quarter of fiscal 1997. CUC INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued) NOTE 3 -- SHAREHOLDERS' EQUITY Net income per share, assuming the conversions of the zero coupon convertible notes during the three months ended April 30, 1996 occurred at the beginning of such period, would not differ significantly from the Company's actual earnings per share for such period. NOTE 4 -- INCOME TAXES The Company's effective tax rate differs from the Federal statutory rate principally because of state income taxes and non- deductible amortization of the excess of cost over net assets acquired. Independent AccountantsO Review Report Shareholders and Board of Directors CUC International Inc. We have reviewed the accompanying condensed consolidated balance sheet of CUC International Inc. as of April 30, 1996, and the related condensed consolidated statements of income and cash flows for the three-month periods ended April 30, 1996 and 1995. These financial statements are the responsibility of the CompanyOs management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of CUC International Inc. as of January 31, 1996, and the related consolidated statements of income, shareholders' equity and cash flows for the year then ended, not presented herein, and in our report dated March 19, 1996, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 31, 1996, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. ERNST & YOUNG LLP Stamford, Connecticut May 22, 1996 ITEM 2. CUC INTERNATIONAL INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Three Months Ended April 30, 1996 vs. Three Months Ended April 30, 1995 The Company's overall membership base continues to grow at a rapid rate (from 36.9 million members at April 30, 1995 to 48 million members at April 30, 1996), which is the largest contributing factor to the 20% increase in revenues (from $325.1 million for the quarter ended April 30, 1995 to $390 million for the quarter ended April 30, 1996). While the overall membership base increased by approximately 1.5 million members during the quarter, the average annual fee collected for the Company's membership services increased by 1%. The Company divides its memberships into three categories: individual, wholesale and discount program memberships. Individual memberships consist of members that pay directly for the services and the Company pays for the marketing costs to solicit the member primarily using direct marketing techniques. Wholesale memberships include members that pay directly for the services to their sponsor and the Company does not pay for the marketing costs to solicit the members. Discount program memberships are generally marketed through a direct sales force, participating merchant or general advertising and the related fees are either paid directly by the member or the local retailer. All of these categories share various aspects of the Company's marketing and operating resources. Compared to the previous year's first quarter, individual, wholesale and discount program memberships grew by 16%, 20% and 61%, respectively, including members which came from acquisitions completed during fiscal 1996 (members resulting from acquisitions being "Acquired Members"). Discount program memberships have incurred the largest increase from Acquired Members, principally from Advance Ross Corporation, acquired in fiscal 1996, which provides local discounts to consumers. For the quarter ended April 30, 1996, individual, wholesale and discount coupon program memberships represented 63%, 14% and 23% of revenues, respectively. The Company maintains a flexible marketing plan so that it is not dependent on any one service for the future growth of the total membership base. As the Company's services continue to mature, a greater percentage of the total individual membership base is in its renewal years. This results in increased profit margins for the Company due to the significant decrease in certain marketing costs incurred on renewing members. Improved response rates for new members also favorably impact profit margins. As a result, operating income before interest and taxes ("EBIT") increased from $58.7 million to $77.9 million, and EBIT margins improved from 18.1% to 20%. Individual membership usage continues to increase, which contributes to additional service fees and indirectly contributes to the Company's strong renewal rate. Historically, an increase in overall membership usage has had a favorable impact on renewal rates. The Company records its deferred revenue net of estimated cancellations which are anticipated in the Company's marketing programs. CUC INTERNATIONAL INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Three Months Ended April 30, 1996 vs. Three Months Ended April 30, 1995 Operating costs increased 19% (from $89.2 million to $105.8 million). The major components of the Company's operating costs continue to be personnel, telephone, computer processing, participant insurance premiums (the cost of obtaining insurance coverage for members) and travel cash awards. Travel members are entitled to receive cash awards based on travel booked with the Company. For the quarter ended April 30, 1996, these awards represent less than 5% of total operating costs. The increase in overall operating costs is due principally to the variable nature of many of these costs and, therefore, the additional costs incurred to support the growth in the membership base. Historically, the Company has seen a direct correlation between providing a high level of service to its members and improved retention. Marketing costs decreased as a percentage of revenue (from 40% to 39%). This decrease is primarily due to improved per member acquisition costs and an increase in renewing members. Membership acquisition costs incurred increased 46% (from $83.9 million to $122.4 million) as a result of the increased marketing effort which resulted in an increased number of new members acquired. Marketing costs include the amortization of membership acquisition costs and other marketing costs, which primarily consist of membership communications and sales expenses. Amortization of membership acquisition costs increased by 21% (from $97.2 million to $117.5 million). Other marketing costs increased by 10% (from $31.3 million to $34.5 million). These increases resulted primarily from the costs of servicing a larger membership base. The marketing functions for the Company's consumer services are combined for its various services and, accordingly, there are no significant changes in marketing costs by service. The Company routinely reviews all renewal rates and has not seen any material change over the last year in the average renewal rate. Renewal rates are calculated by dividing the total number of renewing members not requesting a refund during their renewal year by the total members up for renewal. General and administrative costs decreased as a percentage of revenue (from 15% to 14%). This is principally the result of the Company's ongoing ability to control overhead. Interest income, net, increased from $.3 million to $.8 million primarily due to the reduced level of amortization associated with the Company's zero coupon convertible notes and the net interest income from the increased level of cash generated by the Company for investment. CUC INTERNATIONAL INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Membership Information The following chart sets forth the approximate number of members and net additions for the respective periods. Net New Member Number of Additions Period Members for the Period Quarter Ended April 30, 1996 48,015,000 1,535,000 Year Ended January 31, 1996 46,480,000 12,630,000* Quarter Ended April 30, 1995 36,850,000 3,000,000** Year Ended January 31, 1995 33,850,000 3,000,000 *Includes approximately 8 million Acquired Members. **Includes approximately 1.7 million Acquired Members. The membership acquisition costs incurred applicable to obtaining a new member, for memberships other than coupon book memberships, generally approximate the initial membership fee. Initial membership fees for coupon book memberships generally exceed the membership acquisition costs incurred applicable to obtaining a new member. Membership cancellations processed by certain of the Company's clients report membership information only on a net basis. Accordingly, the Company does not receive actual numbers of gross additions and gross cancellations for certain types of memberships. In calculating the number of members, the Company has deducted its best estimate of cancellations which may occur during the trial membership periods offered in its marketing programs. Typically these periods range from one to three months. Liquidity And Capital Resources; Inflation; Seasonality Funds for the Company's operations and acquisitions have been provided through cash flow from operations. The Company also has a credit agreement, dated March 26, 1996, with certain banks signatory thereto; The Chase Manhattan Bank, N.A., Bank of Montreal, Morgan Guaranty Trust Company of New York and The Sakura Bank, Limited, as Co-Agents; and The Chase Manhattan Bank, N.A., as Administrative Agent (the "Credit Agreement"). The Credit Agreement provides for a $500 million revolving credit facility with a variety of different types of loans available thereunder. The Credit Agreement contains certain customary restrictive covenants including, without limitation, financial covenants and restrictions on certain corporate transactions, and also contains various event of default provisions including, without limitation, defaults arising from certain changes in control of the Company. The amount of borrowings available to the Company under the Credit Agreement was $500 million at April 30, 1996, as there were no borrowings under the Credit Agreement at that date. The Credit Agreement is scheduled to expired March 26, 2001. CUC INTERNATIONAL INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Liquidity And Capital Resources; Inflation; Seasonality (continued) The Company invested approximately $10.7 million in acquisitions, net of cash acquired, during the three months ended April 30, 1996. These acquisitions have been fully integrated into the Company's operations. The Company is not aware of any trends, demands or uncertainties that will have a material effect on the Company's liquidity. The Company anticipates that cash flow from operations and the Credit Agreement will be sufficient to achieve its current long-term objectives. The Company does not anticipate any material capital expenditures for the next year. Total capital expenditures were $8 million for the three months ended April 30, 1996. The Company intends to continue to review potential acquisitions that it believes would enhance the Company's growth and profitability. Any acquisitions paid for in cash will initially be financed through excess cash flow from operations and the Credit Agreement. However, depending on the financing necessary to complete an acquisition, additional funding may be required. To date, the overall impact of inflation on the Company has not been material. Except for the cash receipts from the sale of coupon book memberships, the Company's business is generally not seasonal. Most cash receipts from these coupon book memberships are received in the fourth quarter and, to a lesser extent, in the first and the third quarters of each fiscal year. For the three months ended April 30, 1996, the Company's international businesses represented less than 5% of EBIT. Operating in international markets involves dealing with sometimes volatile movements in currency exchange rates. The economic impact of currency exchange rate movements on the Company is complex because it is linked to variability in real growth, inflation, interest rates and other factors. Because the Company operates in a mix of membership services and numerous countries, management believes currency exposures are fairly well diversified. To date, currency exposure has not been a significant competitive factor at the local market operating level. As international operations continue to expand and the number of cross-border transactions increases, the Company intends to continue monitoring its currency exposures closely and take prudent actions as appropriate. PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Matters as specified in the Company's Proxy Statement dated May 3, 1996, a copy of which has previously been filed with the Securities and Exchange Commission, were considered and approved by the Company's shareholders at the annual shareholders' meeting held on June 5, 1996. The results of such matters are as follows: Proposal 1: To elect Messrs. T. Barnes Donnelley, Christopher K. McLeod and Stanley M. Rumbough, Jr. to the Board of Directors of the Company, each for a term to expire at the 1999 Annual Meeting. Results: Total Vote For Total Vote Withheld T. Barnes Donnelley 161,779,934 487,560 Christopher K. McLeod 161,780,685 486,809 Stanley M. Rumbough, Jr. 161,696,624 570,870 The terms of office as a director of each of Bartlett Burnap, Walter A. Forbes, Stephen A.Greyser, Burton C. Perfit, Robert P. Rittereiser and E. Kirk Shelton continued after the meeting. Proposal 2: To amend the Company's Restated Certificate of Incorporation to increase the number of shares of Common Stock authorized for issuance. Results: For Against Abstain 156,774,873 4,560,166 932,455 Proposal 3: To amend the Company's 1992 Directors Stock Option Plan. Results: For Against Abstain 139,888,891 21,179,183 1,199,420 Proposal 4: To amend the Company's 1994 Directors Stock Option Plan. Results: For Against Abstain 139,317,819 21,728,586 1,221,089 Proposal 5: To ratify the appointment of Ernst & Young LLP as the Company's Independent Auditors for the fiscal year ending January 31, 1997. Results: For Against Abstain 161,874,573 102,457 290,464 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit No. Description 3.1 Amended and Restated Certificate of Incorporation of the Company, as filed June 5, 1996. 10.1-10.16 Management Contracts, Compensatory Plans and Arrangements 10.1 Form of Employment Contract with E. Kirk Shelton and Christopher K. McLeod, dated February 1, 1987, as amended November 1, 1991 (filed as Exhibit 10.1 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1994).* 10.2 Amendment to Employment Contract with E. Kirk Shelton, dated February 1, 1996 (filed as Exhibit 10.2 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996).* 10.3 Amendment to Employment Contract with Christopher K. McLeod, dated February 1, 1996 (filed as Exhibit 10.3 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996).* 10.4 Employment Contract with Walter A. Forbes, dated January 1, 1987, as amended January 1, 1991, January 1, 1993 and October 1, 1993 (filed as Exhibit 10.2 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1994) (the "Forbes Employment Agreement").* 10.5 Fourth Amendment to Forbes Employment Agreement, dated as of June 1, 1994 (filed as Exhibit 10.3 to the Company's Form 10-Q for the period ended July 31, 1994).* 10.6 Agreement with Cosmo Corigliano, dated February 1, 1994 (filed as Exhibit 10.6 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1995).* 10.7 Amendment to Agreement with Cosmo Corigliano, dated February 21, 1996 (filed as Exhibit 10.7 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996).* 10.8 Agreement with Amy N. Lipton, dated February 1, 1996 (filed as Exhibit 10.8 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996).* 10.9 Form of Employee Stock Option under the 1987 Stock Option Plan (filed as Exhibit 10.6 to the Company's Form 10-Q for the period ended April 30, 1995).* PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (continued) 10.10 Form of Director Stock Option for 1990 and 1992 Directors Stock Options Plans (filed as Exhibit 10.4 to the Company's Annual Report for the fiscal year ended January 31, 1991, as amended December 12, 1991 and December 19, 1991).* 10.11 Form of Director Stock Option for 1994 Directors Stock Option Plan, as amended. 10.12 1987 Stock Option Plan, as amended (filed as Exhibit 10.9 to the Company's Form 10-Q for the period ended April 30, 1995).* 10.13 1990 Directors Stock Option Plan, as amended (filed as Exhibit 10.10. to the Company's Form 10-Q for the period ended April 30, 1995).* 10.14 1992 Directors Stock Option Plan, as amended. 10.15 1994 Directors Stock Option Plan, as amended. 10.16 Restricted Stock Plan and Form of Restricted Stock Plan Agreement (filed as Exhibit 10.24 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1991, as amended December 12, 1991 and December 19, 1991).* 10.17 Credit Agreement, dated as of March 26, 1996, among: CUC International Inc.; the Banks signatory thereto; The Chase Manhattan Bank, N.A., Bank of Montreal, Morgan Guaranty Trust Company of New York, and The Sakura Bank, Limited as Co-Agents; and The Chase Manhattan Bank, N.A., as Administrative Agent (filed as Exhibit 10.17 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996).* 10.18 Agreement and Plan of Merger, dated October 17, 1995, among CUC International Inc., Retreat Acquisition Corporation and Advance Ross Corporation (filed as Exhibit 2 to the Company's Registration Statement on Form S-4, Registration No. 33-64801, filed on December 7, 1995).* 10.19 Agreement and Plan of Merger, dated as of February 19, 1996, by and among Davidson & Associates, Inc., CUC International Inc. and Stealth Acquisition I Corp. (filed as Exhibit 2(a) to the Company's Report on Form 8-K filed March 12, 1996).* 10.20 Agreement and Plan of Merger, dated as of February 19, 1996, by and among Sierra On-Line, Inc., CUC International Inc. and Larry Acquisition Corp. (filed as Exhibit 2(b) to the Company's Report on Form 8-K filed March 12, 1996).* PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (continued) 10.21 Agreement and Plan of Merger, dated as of April 19, 1996, by and among Ideon Group, Inc., CUC International Inc. and IG Acquisition Corp. (filed as Exhibit 10.21 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996).* 11. Statement re: Computation of Per Share Earnings (Unaudited) 15. Letter re: Unaudited Interim Financial Information (b) During the quarter ended April 30, 1996, the Company filed the following Current Reports on Form 8-K: (1) Current Report on Form 8-K, filed on February 21, 1996, reporting an Item 5 ("Other Events") event. (2) Current Report on Form 8-K, filed on February 22, 1996, reporting an Item 5 ("Other Events") event. (3) Current Report on Form 8-K, filed on March 12, 1996, reporting an Item 5 ("Other Events") event. (4) Current Report on Form 8-K, filed on April 22, 1996, reporting an Item 5 ("Other Events") event. *Incorporated by reference SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CUC INTERNATIONAL INC. (Registrant) Date: June 14, 1996 By: WALTER A. FORBES Walter A. Forbes - Chief Executive Officer and Chairman of the Board (Principal Executive Officer) Date: June 14, 1996 By: COSMO CORIGLIANO Cosmo Corigliano - Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) INDEX TO EXHIBITS Exhibit No. Description Page 3.1 Amended and Restated Certificate of Incorporation of the Company, as filed June 5, 1996. 10.1-10.16 Management Contracts, Compensatory Plans and Arrangements 10.1 Form of Employment Contract with E. Kirk Shelton and Christopher K. McLeod, dated February 1, 1987, as amended November 1, 1991 (filed as Exhibit 10.1 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1994).* 10.2 Amendment to Employment Contract with E. Kirk Shelton, dated February 1, 1996 (filed as Exhibit 10.2 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996).* 10.3 Amendment to Employment Contract with Christopher K. McLeod, dated February 1, 1996 (filed as Exhibit 10.3 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996).* 10.4 Employment Contract with Walter A. Forbes, dated January 1, 1987, as amended January 1,1991, January 1, 1993 and October 1, 1993 (filed as Exhibit 10.2 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1994) (the "Forbes Employment Agreement").* 10.5 Fourth Amendment to Forbes Employment Agreement, dated as of June 1, 1994 (filed as Exhibit 10.3 to the Company's Form 10-Q for the period ended July 31, 1994).* 10.6 Agreement with Cosmo Corigliano, dated February 1, 1994 (filed as Exhibit 10.6 to the Company's Annual Report on Form 10- K for the fiscal year ended January 31, 1995).* 10.7 Amendment to Agreement with Cosmo Corigliano, dated February 21, 1996 (filed as Exhibit 10.7 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996).* 10.8 Agreement with Amy N. Lipton, dated February 1, 1996 (filed as Exhibit 10.8 to the Company's Annual Report on Form 10- K for the fiscal year ended January 31, 1996).* 10.9 Form of Employee Stock Option under the 1987 Stock Option Plan (filed as Exhibit 10.6 to the Company's Form 10-Q for the period ended April 30, 1995).* INDEX TO EXHIBITS (continued) Exhibit No. Description Page 10.10 Form of Director Stock Option for 1990 and 1992 Directors Stock Options Plans (filed as Exhibit 10.4 to the Company's Annual Report for the fiscal year ended January 31, 1991, as amended December 12, 1991 and December 19, 1991).* 10.11 Form of Director Stock Option for 1994 Directors Stock Option Plan, as amended. 10.12 1987 Stock Option Plan, as amended (filed as Exhibit 10.9 to the Company's Form 10-Q for the period ended April 30, 1995).* 10.13 1990 Directors Stock Option Plan, as amended (filed as Exhibit 10.10. to the Company's Form 10-Q for the period ended April 30, 1995).* 10.14 1992 Directors Stock Option Plan, as amended. 10.15 1994 Directors Stock Option Plan, as amended. 10.16 Restricted Stock Plan and Form of Restricted Stock Plan Agreement (filed as Exhibit 10.24 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1991, as amended December 12, 1991 and December 19, 1991).* 10.17 Credit Agreement, dated as of March 26, 1996, among: CUC International Inc.; the Banks signatory thereto; The Chase Manhattan Bank, N.A., Bank of Montreal, Morgan Guaranty Trust Company of New York, and the Sakura Bank, Limited as Co- Agents; and The Chase Manhattan Bank, N.A., as Administrative Agent (filed as Exhibit 10.17 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996).* 10.18 Agreement and Plan of Merger, dated October 17, 1995, among CUC International Inc., Retreat Acquisition Corporation and Advance Ross Corporation (filed as Exhibit 2 to the Company's Registration Statement on Form S-4, Registration No. 33-64801, filed on December 7, 1995).* 10.19 Agreement and Plan of Merger, dated as of February 19, 1996, by and among Davidson & Associates, Inc., CUC International Inc. and Stealth Acquisition I Corp. (filed as Exhibit 2(a) to the Company's Report on Form 8- K filed March 12, 1996).* 10.20 Agreement and Plan of Merger, dated as of February 19, 1996, by and among Sierra On-Line, Inc., CUC International Inc. and Larry Acquisition Corp. (filed as Exhibit 2(b) to the Company's Report on Form 8-K filed March 12, 1996).* INDEX TO EXHIBITS (continued) Exhibit No. Description Page 10.21 Agreement and Plan of Merger, dated as of April 19, 1996, by and among Ideon Group, Inc., CUC International Inc. and IG Acquisition Corp. (filed as Exhibit 10.21 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996).* 11. Statement re: Computation of Per Share Earnings (Unaudited) 15. Letter re: Unaudited Interim Financial Information *Incorporated by reference