December 31, 1998
Mr. Henry R. Silverman
Cendant Corporation
712 Fifth Avenue, 41st Floor
New York, New York 10019
Dear Henry:
Reference is hereby made to the agreement by and between Cendant
Corporation (the "Company") (as successor by merger to HFS Incorporated) and
you, as amended and restated as of June 30, 1996 and as further amended as of
January 27, 1997 and December 17, 1997 (the "Agreement"). Capitalized terms used
in this letter shall have the meanings assigned to them in the Agreement unless
otherwise defined herein. In order to reflect the change in your duties as a
result of your assumption of the position of Chairman of the Board in addition
to President and Chief Executive Officer, and to accommodate certain other
changes to the terms of the Agreement, pursuant to and in accordance with the
amendment provisions set forth in Section 10 of the Agreement, the Company and
you hereby agree that the Agreement shall be amended by entering into this Third
Amendment to Employment Agreement (the "Third Amendment"), effective January 1,
1999 (the "Third Amendment Effective Date"), as follows:
1. Section 1 of the Agreement is hereby amended in its entirety to read
as follows:
"The employment of the Executive by the Company pursuant to this
Agreement will commence on the Closing Date (as defined in that
certain Agreement and Plan of Merger (the "Merger Agreement"), dated
as of May 27, 1997, by and between HFS Incorporated and CUC
International Inc. ("CUC") and end on December 31, 2005, unless
extended or sooner terminated as hereinafter provided."
2. The first sentence of Section 2 of the Agreement is hereby amended
in its entirety to read as follows:
"For the period commencing on the Closing Date through and including
July 27, 1998, the Executive shall serve as President and Chief
Executive Officer of the Company. For the period commencing on July
28, 1998, the Executive
Mr. Henry R. Silverman
December 31, 1998
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shall, in addition to his other offices, serve as Chairman of the
Board and Chairman of the Executive Committee of the Board of the
Company."
3. The first sentence of Section 4(a) of the Agreement is hereby
amended in its entirety to read as follows:
"Salary. During the period of the Executive's employment, the Company
shall pay the Executive an annual base salary at a rate of $1,500,000
per year for the period commencing on the Closing Date and ending on
December 31, 1998 and $2,900,000 per year thereafter, such salary to
be paid in substantially equal semi-monthly or bi-weekly
installments."
4. The first sentence of Section 7(b) of the Agreement is hereby
amended in its entirety to read as follows:
"The Executive acknowledges that, through his status as Chairman of
the Board, President and Chief Executive Officer of the Company, he
has and will have possession of important, confidential information
and knowledge as to the Company's business, including but not limited
to knowledge of marketing and operating strategies, franchise
agreements, financial results and projections, future plans, the
provisions of important contracts entered into by the Company and
possible acquisitions and divestitures."
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Mr. Henry R. Silverman
December 31, 1998
Page 3
This letter is intended to constitute an amendment to the Agreement,
and, as amended hereby, the Agreement shall remain in full force and effect. In
order to evidence your agreement with the provisions of this letter, please sign
the enclosed copy of this letter and return it to the undersigned whereupon it
will be the binding agreement between the Company and you.
Very truly yours,
CENDANT CORPORATION
By: /s/ James E. Buckman
--------------------------
Title: Vice Chairman
AGREED TO:
Henry R. Silverman
/s/ Henry R. Silverman
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