Cendant Implements Middle Management Retention Program

Business Wire, July 28, 1998

PARSIPPANY, N.J. and STAMFORD, Conn.--(BUSINESS WIRE)--July 28, 1998- -Cendant Corporation (NYSE: CD) today announced affirmative steps to retain middle management and other key employees. Most notably, Cendant will reset the exercise price of incentive stock options granted to middle management and other key employees in the period between December 1997 and March 1998. Cendant does not plan to reset incentive options granted to executive management, business unit heads or senior staff executives.

The options to be reset were granted with exercise prices between $31.375 and $37.50 per share, significantly above Cendant's July 27, 1998 closing price of $15.75 per share. The company also plans to reset the exercise price of options granted to employees who voluntarily exchanged cash compensation for an equivalent value of options in the first quarter of 1998. The new exercise price will be set in early August based on market prices at that time.

"This action addresses the heart of Cendant, the employees whose dedicated and unstinting efforts have built a solid core of businesses that will deliver earnings approaching $1 billion this year," said Henry R. Silverman, President & CEO. "Equity incentives and option grants are part of the fabric of our company and an integral part of many employees' compensation. These employees have been deprived of a material portion of their overall compensation by events totally beyond their control. We would be derelict in our duties as custodians of shareholder value if we did not take steps to retain these key employees.

"We do not believe it is appropriate to nor will we reset the terms of the options awarded as compensation to our most senior executives, a group of approximately 50 persons," Silverman continued. "However, equity incentives extend far within Cendant to many other valuable persons we must retain to continue our earnings growth and build shareholder value into the future."

Cendant (NYSE: CD) 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 Stamford, CT and Parsippany, NJ, the company has more than 40,000 employees, operates in over 100 countries and makes approximately 100 million customer contacts annually.

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