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Cendant to Amend CEO's Employment Contract

Press Release: Cendant Corporation
April 20, 2004
NEW YORK, NY -- Cendant Corporation (NYSE: CD) yesterday announced that it has reached an agreement in principle to settle the shareholder derivative lawsuit commenced on behalf of the company which alleged that the amended employment agreement with Chairman and Chief Executive Officer Henry R. Silverman was approved by the Board of Directors in violation of their fiduciary duties. While denying that the actions taken were in any way improper, the defendants, including Mr. Silverman, have decided to resolve this matter to avoid wasteful and expensive litigation in the interest of the company and its shareholders. Any final settlement must be approved by the Cendant Board of Directors and then submitted to the Delaware Chancery Court for its approval after a hearing upon notice to shareholders who will be able to comment on it.

The proposed settlement anticipates changes to the existing contract with Mr. Silverman. The most significant changes to the existing contract are as follows. First, the expiration date of the contract has been changed from December 31, 2012 to December 31, 2007, a decrease in the contract length of five years, and any severance payments have been reduced to no more than 2.99 times the prior year's compensation. Second, a significant majority of Mr. Silverman's bonus will now be subject to the attainment of certain performance-based earnings per share goals. Third, the cash compensation portion of a post-employment-consulting contract has been reduced from life to a period of five years.

"We believe that these revised contractual arrangements are responsive to concerns we have heard from our investors, and are clearly in our shareholders' best interest," stated Leonard S. Coleman, presiding director of the board. "This amendment coincides with our Chairman's primary goal of creating value for our shareholders."

As the largest private holder of Cendant shares with direct ownership of 8 million shares and approximately 34 million vested and "in the money" options, Mr. Silverman's proposed new contract does not envision any future equity grants. Terms of the amended contract will be in effect for purposes of calculating his incentive compensation in 2004.

Cendant Corporation is primarily a provider of travel and residential real estate services. With approximately 90,000 employees, New York City-based Cendant provides these services to business and consumers in over 100 countries. More information about Cendant, its companies, brands and current SEC filings may be obtained by visiting the Company's Web site at http://www.cendant.com or by calling 877-4-INFOCD (877-446-3623).

Source: Cendant Corporation