EXHIBIT 99.3
news release
WALTER FORBES STEPS DOWN AS CENDANT CHAIRMAN
CEO Henry Silverman Elected New Chairman
Nine CUC Board Members Resign;
One Additional Director to Leave by Year-End
80% Vote on Corporate Governance Provisions Eliminated
PARSIPPANY, NJ, July 28, 1998 -- Cendant Corporation [NYSE: CD] today announced
that Walter A. Forbes resigned as Chairman of the Company and as a member of the
Board of Directors, effective immediately. Henry R. Silverman, Chief Executive
Officer of Cendant, was unanimously elected by the Board of Directors to be
Chairman and will continue to serve as CEO and President.
Nine members of the Board formerly associated with CUC International, including
Mr. Forbes, also resigned effective immediately. One other Board member formerly
associated with CUC will leave the Board by year end, leaving Cendant with 18
directors.
The Board also voted to eliminate the governance plan adopted as part of the
CUC-HFS merger, including the 80% super-majority provisions of the Company's
By-Laws which include limitations on the removal of the Chairman and the CEO. In
addition, the Board rescheduled Cendant' annual meeting of shareholders for
October 1, 1998.
Mr. Silverman said, "Walter Forbes's decision and the corporate governance
changes approved today end any uncertainty about the future direction and
leadership of Cendant. That uncertainty was a serious impediment to conducting
our business and the process of restoring trust in our company.
"Now we can focus all of our energies on rebuilding confidence in our Company
and value for Cendant's shareholders," Mr. Silverman added. "The company's
earnings and cash flow remain strong. We have some of the most valuable
businesses in the world. Most importantly, we have outstanding people who are
passionate about Cendant and its future."
Commenting on his action, Mr. Forbes said, "I leave with tremendous confidence
in the future success of Cendant. The vision and rationale behind its creation
remain as compelling as ever. Its business fundamentals are strong. The
operations are sound and profitable. The opportunities for synergy are numerous.
The action I am taking today eliminates speculation about the future leadership
of Cendant and helps the company focus all of its attention and resources on
restoring the faith of its shareholders, its customers and its people."
(Note: full statements by Mr. Silverman and Mr. Forbes are attached.)
Terms of Severance Agreement with Mr. Forbes Outlined
The severance agreement reached with Mr. Forbes gives him the benefits required
by his contract should he be terminated for reasons other than for cause. These
benefits total $35 million in cash and include the grant of certain options. In
addition, the Company provided a limited release for Mr. Forbes. The payments to
Mr. Forbes will cause Cendant to record an unusual expense of approximately
$0.03 per share in the third quarter.
Board Members Resign, Size of Board Reduced
The immediate departure of nine Directors formerly associated with CUC, and the
planned departure of one additional CUC Director, Frederick D. Green, will
result in Cendant having a Board with 18 Directors. Mr. Green, Chairman of the
Audit Committee, has agreed to resign effective upon completion of the final
Audit Committee report.
Certain matters discussed in this news release and the attached statements are
forward- looking statements, as defined in the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are subject to a number of
known and unknown risks and uncertainties including, but not limited to, the
outcome of the Audit Committee's investigation; uncertainty as to the Company's
future profitability; the Company's ability to develop and implement operational
and financial systems to manage rapidly growing operations; competition in the
Company's existing and potential future lines of business; the Company's ability
to integrate and operate successfully acquired businesses and the risks
associated with such businesses; the Company's ability to obtain financing on
acceptable terms to finance the Company's growth strategy and for the Company to
operate within the limitations imposed by financing arrangements; uncertainty as
to the future profitability of acquired businesses; and other factors. Other
factors and assumptions not identified above were also involved in the
derivation of these forward-looking statements, and the failure of such other
assumptions to be realized as well as other factors may also cause actual
results to differ materially from those projected. The Company assumes no
obligation to update these forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting such
forward-looking statements.
Cendant is the world's premier provider of consumer and business services.
Cendant operates in three principal segments: Alliance Marketing, Travel and
Real Estate Services. Headquartered in Parsippany, NJ, the company has more than
40,000 employees, operates in over 100 countries and makes approximately 100
million customer contacts annually.
Contact:
Media:
Jim Fingeroth/Victoria Weld
Kekst and Company
212/521-4800
Investors:
David M. Johnson
Cendant
973/496-7909
For Mr. Forbes:
Nicole Reilly
212/885-0353
Statement from Henry Silverman
Chief Executive Officer, Cendant Corporation
During the past three months, the shareholders and people of Cendant have
suffered unfairly from an unconscionable fraud perpetrated against the company
by a few individuals at the former CUC International. It has tarnished our
company' reputation and created public uncertainty and speculation about the
future leadership of Cendant.
Like every other shareholder and employee, I am outraged at what has transpired.
We intend to take appropriate action against those who conducted these
fraudulent activities, and will continue cooperating fully with law enforcement
authorities.
At the same time, we have an obligation to our shareholders and everyone
associated with Cendant to move ahead with the business of our company. We must
do everything we can to put this episode behind us, to eliminate the cloud
hanging over this company, to dispel all of the uncertainty generated by recent
events. As others have noted, it has been difficult for Cendant to rebuild trust
in our company while this uncertainty exists.
The corporate governance changes approved today by our Board of Directors end
any uncertainty about the future direction and leadership of Cendant. We can now
rebuild trust in our company. We can focus all of our energies on rebuilding
value for Cendant' shareholders. The company' earnings and cash flow remain
strong. We have some of the most valuable businesses in the world. Most
importantly, we have outstanding people who are passionate about Cendant and its
future.
I look forward to working with all of the people of Cendant to move our company
forward, build on our unique combination of strengths and realize the full
potential of this great enterprise.
Statement from Walter Forbes
Chairman, Cendant Corporation
Together with many talented, hard working and decent people, I devoted 25 years
of my life to creating and building CUC International, which became an
innovative force in developing and marketing consumer services. In combining
with HFS, another great company, CUC became part of an enterprise with
extraordinary energy and vision - and an unsurpassed ability to capitalize on
rapidly changing consumer markets.
However, the people of Cendant and its shareholders have suffered in recent
months as a result of fraudulent conduct and the uncertainty it has created.
Today, it is apparent that the actions of a few have profoundly hurt us all.
And, as I have said on many occasions, I had absolutely no knowledge of the
accounting irregularities. However, I now believe it is in the best interest of
our shareholders and employees to resolve this uncertainty.
I leave with tremendous confidence in the future success of Cendant. The vision
and rationale behind its creation remain as compelling as ever. Its business
fundamentals are strong. The operations are sound and profitable. The
opportunities for synergy are numerous. The action I am taking today eliminates
speculation about the future leadership of Cendant and helps the company focus
all of its attention and resources on restoring the faith of its shareholders,
its customers and its people.
I am proud to have helped create one of the most dynamic consumer enterprises in
the world. I am grateful to all those bright, dedicated individuals with whom I
have had the chance to work. I have an unshakable faith in Cendant's ability to
create value for its shareholders, business partners and customers for many
years to come. I wish everyone associated with the company the very best as it
fulfills that mission.