SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 24, 1996
CUC INTERNATIONAL INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-10308 06-0918165
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(State or Other (Commission (I.R.S. Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
707 SUMMER STREET, STAMFORD, CONNECTICUT 06901
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(Address of Principal Executive Offices) (Zip Code)
(203) 324-9261
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(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
A. The Davidson Merger
On July 24, 1996, pursuant to an Agreement and Plan of Merger dated as of
February 19, 1996, as amended by Amendment No. 1 thereto dated as of July 24,
1996 (the "Davidson Merger Agreement"), CUC International Inc., a Delaware
corporation (the "Registrant"), consummated a merger (the "Davidson Merger")
whereby Stealth Acquisition I Corp., a California corporation and wholly owned
subsidiary of the Registrant ("Davidson Merger Sub"), was merged with and into
Davidson & Associates, Inc., a California corporation ("Davidson"), with
Davidson surviving the Davidson Merger as a wholly owned subsidiary of the
Registrant.
In the Davidson Merger (which has been accounted for as a
pooling-of-interests for accounting and financial reporting purposes), among
other things, each share of the common stock, $0.00025 par value, of Davidson
("Davidson Common Stock") issued and outstanding immediately prior to the
effective time of the Davidson Merger (the "Davidson Effective Time") (other
than shares held by the Registrant, Davidson Merger Sub or any other subsidiary
of the Registrant or any subsidiary of Davidson, or dissenters' shares under
applicable California law) was converted into 0.85 of a share of the common
stock, $0.01 par value, of the Registrant ("Registrant Common Stock") determined
pursuant to the exchange ratio set forth in the Davidson Merger Agreement. In
addition, each option to purchase shares of Davidson Common Stock outstanding
immediately prior to the Davidson Effective Time was cancelled and, in lieu
thereof, the Registrant has issued to each holder of each such cancelled option
a substitute option to acquire, on substantially the same terms and subject to
substantially the same conditions as were applicable under the cancelled option,
the same number of shares of Registrant Common Stock as the holder of each such
cancelled option would have been entitled to receive in the Davidson Merger had
such holder exercised such cancelled option in full immediately prior to the
Davidson Effective Time. Based on the total shares of Davidson Common Stock
outstanding immediately prior to the Davidson Effective Time, approximately
30,039,606 shares of Registrant Common Stock (having an aggregate market value
of approximately $863,638,672.50 at the Davidson Effective Time) have been
issued in the Davidson Merger, not including the additional shares of Registrant
Common Stock that were
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issued in connection with the Davidson Real Property Purchase Agreement
discussed below.
The consideration received by holders of Davidson Common Stock in the
Davidson Merger (i.e., the exchange ratio of 0.85 of a share of Registrant
Common Stock for each share of Davidson Common Stock) and the other material
terms of the Davidson Merger Agreement and related transaction documents were
determined by arms'-length negotiation between the Registrant and Davidson.
On February 19, 1996 (simultaneously with the execution of the Davidson
Merger Agreement), the Registrant and the holders of approximately 72% of the
then outstanding Davidson Common Stock (consisting of the Chairman and Chief
Executive Officer, and the President, respectively, of Davidson, and certain
trusts for which such executive officers serve as fiduciaries) entered into a
Shareholders Agreement (the "Davidson Shareholders Agreement"), pursuant to
which, among other things, such holders agreed to vote (and voted) all shares
held of record or beneficially owned by them for adoption of the Davidson Merger
Agreement at the special meeting of the holders of Davidson Common Stock held
for such purpose on July 24, 1996.
In addition, in connection with and as a condition to consummation of the
Davidson Merger, the Registrant and the holders of Davidson Common Stock party
to the Davidson Shareholders Agreement (referred to in the preceding paragraph)
entered into a Registration Rights Agreement dated July 24, 1996 (the "Davidson
Registration Rights Agreement"), pursuant to which, among other things, the
Registrant agreed, under certain circumstances and with certain exceptions, to
effect the registration under the Securities Act of 1933, as amended, of certain
securities of the Registrant issued to such holders of Davidson Common Stock.
Moreover, in connection with and as an additional condition to
consummation of the Davidson Merger, CUC Real Estate Holdings, Inc., a Delaware
corporation and wholly owned subsidiary of the Registrant ("CUC Real Estate"),
entered into an Agreement of Sale dated July 23, 1996 (the "Davidson Real
Property Purchase Agreement"), whereby CUC Real Estate purchased from the
Chairman and Chief Executive Officer, and President, respectively, of Davidson,
certain real property, including, without limitation, Davidson's principal
executive offices. Such property, which prior to
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the Davidson Effective Time was leased to Davidson by such executive officers,
was purchased in consideration for the issuance by the Registrant to such
executive officers of approximately 147,866 shares of Registrant Common Stock
having a value on the date of issuance of approximately $4,251,147.50. Such
shares were issued in addition to the 30,039,606 shares of Registrant Common
Stock issued in connection with the Davidson Merger.
Effective immediately following the Davidson Effective Time, the
Registrant increased the size of its Board of Directors and caused the Chairman
and Chief Executive Officer, and the President, respectively, of Davidson to be
appointed to such Board, and such Chairman and Chief Executive Officer was
appointed as a Vice Chairman of the Registrant's Board of Directors. In
addition, pursuant to the Davidson Merger Agreement, the directors of Davidson
Merger Sub immediately prior to the Davidson Effective Time became, immediately
after the Davidson Effective Time, and presently are, the directors of Davidson
(as the surviving corporation in the Davidson Merger).
For a more complete description of the terms of the Davidson Merger and
the transactions contemplated thereby, reference is hereby made to the Davidson
Merger Agreement, Amendment No. 1 thereto, the Davidson Shareholders Agreement,
the Davidson Registration Rights Agreement and the Davidson Real Property
Purchase Agreement, which are included in this Current Report on Form 8-K as
Exhibits 2.1, 2.2, 9.1, 10.1 and 10.2, respectively.
B. The Sierra Merger
On July 24, 1996, pursuant to an Agreement and Plan of Merger dated as of
February 19, 1996, as amended by Amendment No. 1 thereto dated as of March 27,
1996 and as further amended by Amendment No. 2 thereto dated as of July 24, 1996
(the "Sierra Merger Agreement"), the Registrant consummated a merger (the
"Sierra Merger") whereby Larry Acquisition Corp., a Delaware corporation and
wholly owned subsidiary of the Registrant ("Sierra Merger Sub"), was merged with
and into Sierra On-Line, Inc., a Delaware corporation ("Sierra"), with Sierra
surviving the Sierra Merger as a wholly owned subsidiary of the Registrant.
In the Sierra Merger (which has been accounted for as a
pooling-of-interests for accounting and financial reporting purposes), among
other things, each share of the common
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stock, $0.01 par value, of Sierra ("Sierra Common Stock") issued and outstanding
immediately prior to the effective time of the Sierra Merger (the "Sierra
Effective Time") (other than shares held by the Registrant or Sierra Merger Sub
or any other subsidiary of the Registrant or by any subsidiary of Sierra) was
converted into 1.225 shares of Registrant Common Stock, determined pursuant to
the exchange ratio set forth in the Sierra Merger Agreement. In addition, each
option to purchase shares of Sierra Common Stock outstanding immediately prior
to the Sierra Effective Time was assumed by the Registrant and constitutes an
option to acquire, on the same terms and subject to the same conditions as were
applicable under the assumed option, the same number of shares of Registrant
Common Stock as the holder of each assumed option would have been entitled to
receive in the Sierra Merger had such holder exercised such assumed option in
full immediately prior to the Sierra Effective Time. Based on the total shares
of Sierra Common Stock outstanding immediately prior to the Sierra Effective
Time, approximately 25,564,977 shares of Registrant Common Stock (having an
aggregate market value of approximately $1,060,946,545.50 at the Sierra
Effective Time) have been issued in the Sierra Merger.
The consideration received by holders of Sierra Common Stock in the Sierra
Merger (i.e., the exchange ratio of 1.225 shares of Registrant Common Stock for
each share of Sierra Common Stock) and the other material terms of the Sierra
Merger Agreement and related transaction documents were determined by
arms'-length negotiation between the Registrant and Sierra.
On February 19, 1996 (simultaneously with the execution of the Sierra
Merger Agreement), the Registrant and the holders of approximately 9% of the
then outstanding Sierra Common Stock (consisting of the Chairman and Chief
Executive Officer, and a director, respectively, of Sierra) entered into a
Shareholders Agreement (the "Sierra Shareholders Agreement"), pursuant to which,
among other things, such holders agreed to vote (and voted) all shares held of
record or beneficially owned by them for adoption of the Sierra Merger Agreement
at the special meeting of the holders of Sierra Common Stock held for such
purpose on July 24, 1996.
Walter A. Forbes, the Chairman of the Board and Chief Executive Officer of
the Registrant, was a director of Sierra immediately prior to the Sierra
Effective Time. Mr. Forbes did not participate in any of the meetings or
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deliberations of Sierra's Board of Directors regarding its approval of the
Sierra Merger Agreement.
Effective immediately following the Sierra Effective Time, the Registrant
further increased the size of its Board of Directors and caused the Chairman and
Chief Executive Officer of Sierra to be appointed to such Board to serve as a
Vice Chairman of the Registrant's Board of Directors. In addition, pursuant to
the Sierra Merger Agreement, the directors of Sierra immediately prior to the
Sierra Effective Time have remained as the directors of Sierra (as the surviving
corporation in the Sierra Merger).
For a more complete description of the terms of the Sierra Merger and the
transactions contemplated thereby, reference is hereby made to the Sierra Merger
Agreement, Amendment No. 1 thereto, Amendment No. 2 thereto and the Sierra
Shareholders Agreement, which are included in this Current Report on Form 8-K as
Exhibits 2.3, 2.4, 2.5 and 9.2, respectively.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
It is impracticable to provide the required financial statements for
Davidson and Sierra at the date hereof. The Registrant undertakes to file such
required financial statements by means of amendment to this Current Report on
Form 8-K as soon as practicable, and in any case not later than September 24,
1996.
(B) PRO FORMA FINANCIAL INFORMATION.
It is impracticable to provide the required pro forma financial
information required pursuant to Article 11 of Regulation S-X at the date
hereof. The Registrant undertakes to file such required pro forma financial
information by means of amendment to this Current Report on Form 8-K as soon as
practicable, and in any case not later than September 24, 1996.
(C) EXHIBITS
2.1 Agreement and Plan of Merger dated as of February 19, 1996, among
Davidson & Associates, Inc., CUC
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International Inc. and Stealth Acquisition I Corp. (incorporated
herein by reference to Exhibit 2(a) to the Registrant's Current
Report on Form 8-K filed with the Commission on March 12, 1996).
2.2 Amendment No. 1 dated as of July 24, 1996, among Davidson &
Associates, Inc., CUC International Inc. and Stealth Acquisition I
Corp.
2.3 Agreement and Plan of Merger dated as of February 19, 1996, among
Sierra On-Line, Inc., CUC International Inc. and Larry Acquisition
Corp. (incorporated herein by reference to Exhibit 2(b) to the
Registrant's Current Report on Form 8-K filed with the Commission on
March 12, 1996).
2.4 Amendment No. 1 dated as of March 27, 1996, among Sierra On-Line,
Inc., CUC International Inc. and Larry Acquisition Corp.
2.5 Amendment No. 2 dated as of July 24, 1996, among Sierra On-Line,
Inc., CUC International Inc. and Larry Acquisition Corp.
9.1 Shareholders Agreement dated February 19, 1996, by and among CUC
International Inc. and each of the other parties signatory thereto
(incorporated herein by reference to Exhibit 10(a) to the
Registrant's Current Report on Form 8-K filed with the Commission on
March 12, 1996).
9.2 Shareholders Agreement dated February 19, 1996, by and among CUC
International Inc. and each of the other parties signatory thereto
(incorporated herein by reference to Exhibit 10(b) to the
Registrant's Current Report on Form 8-K filed with the Commission on
March 12, 1996).
10.1 Registration Rights Agreement dated July 24, 1996, among CUC
International and the other parties signatory thereto.
10.2 Agreement of Sale dated July 23, 1996, between Robert M. Davidson
and Janice G. Davidson and CUC Real Estate Holdings, Inc.
99.1 Press Release issued by the Registrant on July 24, 1996.
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Current Report on Form 8-K to be
signed on its behalf by the undersigned hereunto duly authorized.
CUC INTERNATIONAL INC.
By: /s/ Christopher K. McLeod
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Name: Christopher K. McLeod
Title: Executive Vice
President
Dated: August 5, 1996
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EXHIBIT INDEX
Exhibit No. Description
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2.1 Agreement and Plan of Merger dated as of February 19, 1996, among
Davidson & Associates, Inc., CUC International Inc. and Stealth
Acquisition I Corp. (incorporated herein by reference to Exhibit
2(a) to the Registrant's Current Report on Form 8-K filed with the
Commission on March 12, 1996).
2.2 Amendment No. 1 dated as of July 24, 1996, among Davidson &
Associates, Inc., CUC International Inc. and Stealth Acquisition I
Corp.
2.3 Agreement and Plan of Merger dated as of February 19, 1996, among
Sierra On-Line, Inc., CUC International Inc. and Larry Acquisition
Corp. (incorporated herein by reference to Exhibit 2(b) to the
Registrant's Current Report on Form 8-K filed with the Commission on
March 12, 1996).
2.4 Amendment No. 1 dated as of March 27, 1996, among Sierra On-Line,
Inc., CUC International Inc. and Larry Acquisition Corp.
2.5 Amendment No. 2 dated as of July 24, 1996, among Sierra On-Line,
Inc., CUC International Inc. and Larry Acquisition Corp.
9.1 Shareholders Agreement dated February 19, 1996, by and among CUC
International Inc. and each of the other parties signatory thereto
(incorporated herein by reference to Exhibit 10(a) to the
Registrant's Current Report on Form 8-K filed with the Commission on
March 12, 1996).
9.2 Shareholders Agreement dated February 19, 1996, by and among CUC
International Inc. and each of the other parties signatory thereto
(incorporated herein by reference to Exhibit 10(b) to the
Registrant's Current Report on Form 8-K filed with the Commission on
March 12, 1996).
10.1 Registration Rights Agreement dated July 24, 1996, among CUC
International and the other parties signatory thereto.
10.2 Agreement of Sale dated July 23, 1996, between Robert M. Davidson
and Janice G. Davidson and CUC Real Estate Holdings, Inc.
99.1 Press Release issued by the Registrant on July 24, 1996.