Filed pursuant to Rule No. 424(b)(3)
File Number 333-84626
PROSPECTUS
CENDANT CORPORATION
2,986,857 Shares
CD Common Stock
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This prospectus relates to 2,986,857 shares of CD common stock,
par value $0.01 per share, of Cendant Corporation, a Delaware corporation.
The shares may be offered and sold from time to time by certain
stockholders of Cendant identified in this prospectus under the heading
"Selling Stockholders."
Our CD common stock is listed on the New York Stock Exchange under
the symbol "CD." On April 4, 2002, the last reported sale price of our CD
common stock was $18.67.
Investing in shares of our CD common stock involves risks. See
"Risk Factors" beginning on page 9 of this prospectus.
We will not receive any of the proceeds from the sale of the
shares of CD common stock by any of the selling stockholders. The selling
stockholders will receive all of the net proceeds from the sale of the
shares of CD common stock and will pay all underwriting discounts and
selling commissions, if any, applicable to the sale of the shares of CD
common stock. The shares of CD common stock may be offered in negotiated
transactions or otherwise, at market prices prevailing at the time of sale
or at negotiated prices. The timing and amount of any sale are within the
sole discretion of the selling stockholders. In addition, the shares of CD
common stock may be offered from time to time through ordinary brokerage
transactions on the New York Stock Exchange. See "Plan of Distribution."
The selling stockholders may be deemed to be "underwriters" as defined in
the Securities Act of 1933, as amended. Any profits realized by the selling
stockholders may be deemed to be underwriting commissions. If the selling
stockholders use any broker-dealers, any commission paid to broker-dealers
and, if broker- dealers purchase any shares of CD common stock as
principals, any profits received by such broker-dealers on the resale of
the shares of CD common stock may be deemed to be underwriting discounts or
commissions under the Securities Act.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus or the accompanying prospectus supplement is
truthful or complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is April 5, 2002.
No dealer, salesperson or other person has been authorized to give
any information or to make any representations other than those contained
or incorporated by reference in this prospectus in connection with the
offer contained in this prospectus and, if given or made, such information
or representations must not be relied upon as having been authorized by
Cendant. Neither the delivery of this prospectus nor any sale made
hereunder shall under any circumstances create an implication that there
has been no change in the affairs of Cendant since the date hereof. This
prospectus does not constitute an offer to sell or a solicitation of an
offer to buy securities other than those specifically offered hereby or of
any securities offered hereby in any jurisdiction where, or to any person
to whom, it is unlawful to make such offer or solicitation. The information
contained in this prospectus speaks only as of the date of this prospectus
unless the information specifically indicates that another date applies.
TABLE OF CONTENTS
Cautionary Statement Concerning Forward-Looking Statements................4
Incorporation of Certain Documents by Reference...........................6
Prospectus Summary........................................................7
Risk Factors..............................................................9
Use of Proceeds..........................................................11
Dividend Policy..........................................................11
Description of CD Common Stock...........................................12
Selling Stockholders.....................................................15
Plan of Distribution.....................................................17
Legal Matters............................................................20
Experts..................................................................20
Where You Can Find More Information......................................20
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Forward-looking statements in this prospectus about Cendant are
subject to known and unknown risks, uncertainties and other factors which
may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. These forward-looking
statements were based on various factors and were derived utilizing
numerous important assumptions and other important factors that could cause
actual results to differ materially from those in the forward-looking
statements. Forward-looking statements include the information concerning
our future financial performance, business strategy, projected plans and
objectives.
Statements preceded by, followed by or that otherwise include the
words "believes", "expects", "anticipates", "intends", "project",
"estimates", "plans", "may increase", "may fluctuate" and similar
expressions or future or conditional verbs such as "will", "should",
"would", "may" and "could" are generally forward-looking in nature and not
historical facts. You should understand that the following important
factors and assumptions could affect our future results and could cause
actual results to differ materially from those expressed in such
forward-looking statements:
o the impacts of the September 11, 2001 terrorist attacks
on New York City and Washington D.C. on the travel
industry in general, and our travel businesses in
particular, are not fully known at this time, but are
expected to include negative impacts on financial results
due to reduced demand for travel in the near term; other
attacks, acts of war, or measures taken by governments in
response thereto may negatively affect the travel
industry, our financial results and could also result in
a disruption in our business;
o the effect of economic conditions and interest rate
changes on the economy on a national, regional or
international basis and the impact thereof on our
businesses;
o the effects of a decline in travel, due to political
instability, adverse economic conditions or otherwise, on
our travel related business;
o the effects of changes in current interest rates,
particularly on our real estate franchise and mortgage
businesses;
o the resolution or outcome of our unresolved pending
litigation relating to the previously announced
accounting irregularities and other related litigation;
o our ability to develop and implement operational,
technological and financial systems to manage growing
operations and to achieve enhanced earnings or effect
cost savings;
o competition in our existing and potential future lines of
business and the financial resources of, and products
available to, competitors;
o failure to reduce quickly our substantial technology
costs in response to a reduction in revenue, particularly
in our computer reservations and global distribution
systems businesses;
o our failure to provide fully integrated disaster recovery
technology solutions in the event of a disaster;
o our ability to integrate and operate successfully
acquired and merged businesses and risks associated with
such businesses, including the acquisitions of Galileo
International, Inc. and Cheap Tickets, Inc., the
compatibility of the operating systems of the combining
companies, and the degree to which our existing
administrative and back-office functions and costs and
those of the acquired companies are complementary or
redundant;
o our ability to obtain financing on acceptable terms to
finance our growth strategy and to operate within the
limitations imposed by financing arrangements and to
maintain our credit ratings;
o competitive and pricing pressures in the vacation
ownership and travel industries, including the car rental
industry;
o changes in the vehicle manufacturer repurchase
arrangements in our Avis car rental business in the event
that used vehicle values decrease;
o and changes in laws and regulations, including changes in
accounting standards and privacy policy regulation.
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.
Most of these factors are difficult to predict accurately and are generally
beyond our control.
You should consider the areas of risk described above in
connection with any forward-looking statements that may be made by us and
our businesses generally. Except for our ongoing obligations to disclose
material information under the federal securities laws, we undertake no
obligation to release publicly any revisions to forward-looking statements,
to report events or to report the occurrence of unanticipated events unless
required by law. You are advised, however, to consult any additional
disclosures we make in our Quarterly Reports on Form 10-Q, Annual Report on
Form 10-K and Current Reports on Form 8-K to the Securities and Exchange
Commission (the "Commission"). See "Where You Can Find More Information."
Also note that we provide a cautionary discussion of risks and
uncertainties under "Risk Factors" on page 9 of this prospectus. These are
factors that we think could cause our actual results to differ materially
from expected results. Other factors besides those listed here could also
adversely affect us. For any forward-looking statements contained in any
document, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of
1995.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" the
information we file with the Commission, which means that we can disclose
important information to you by referring to another document filed
separately with the Commission. The information that Cendant files after
the date of this prospectus with the Commission will automatically update
and supersede this information. Cendant incorporates by reference into this
prospectus the documents listed below and any future filings made with the
Commission under sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), until all of the
shares of CD common stock offered by this prospectus are sold.
o Annual Report on Form 10-K for the year ended December
31, 2001, filed on April 1, 2002;
o Current Reports on Form 8-K dated October 15, 2001 and
April 1, 2002; and
o The description of Cendant's CD common stock contained in
the Proxy Statement dated February 10, 2000, filed on
February 11, 2000.
All documents filed by Cendant with the Commission from the date
of this prospectus to the end of the offering of the shares of CD common
stock shall also be deemed to be incorporated herein by reference.
Any statement contained in a document incorporated or considered
to be incorporated by reference in this registration statement shall be
considered to be modified or superseded for purposes of this prospectus to
the extent that a statement contained in this registration statement or in
any subsequently filed document that is or is considered to be incorporated
by reference modifies or supersedes such statement. Any statement that is
modified or superseded shall not, except as so modified or superseded,
constitute a part of this prospectus.
You may request a copy of any of the documents which are
incorporated by reference in this prospectus, other than exhibits which are
not specifically incorporated by reference into such documents and our
Certificate of Incorporation and By-Laws, at no cost, by writing or
telephoning Cendant at the following:
Investor Relations
Cendant Corporation
9 West 57th Street
New York, NY 10019
Telephone: (212) 413-1800
Prospectus Summary
This prospectus constitutes part of a registration statement on
Form S-3 that we filed with the Commission using a "shelf" registration
process. Under this shelf process, any selling stockholder may sell any
combination of the shares of CD common stock described in this prospectus
in one or more offerings. This prospectus provides you with a general
description of the shares of CD common stock the selling stockholders may
offer. All references to "we," "us," "our," or "Cendant" in this prospectus
are to Cendant Corporation.
Cendant
We are one of the foremost providers of travel and real estate
services in the world. Our businesses provide a wide range of consumer and
business services and are intended to complement one another and create
cross-marketing opportunities both within and among our following five
business segments:
o Our Real Estate Services segment franchises the real
estate brokerage businesses of the CENTURY 21(R),
Coldwell Banker(R), Coldwell Banker Commercial(R) and
ERA(R) brands; provides home buyers with mortgages
through Cendant Mortgage Corporation and assists in
employee relocations through Cendant Mobility Services
Corporation.
o Our Hospitality segment operates the Days Inn(R),
Ramada(R) (in the United States), Super 8 Motel(R),
Howard Johnson(R), Wingate Inn(R), Knights Inn(R),
Travelodge(R) (in North America), Villager
Lodge(R)/Village Premier(R)/Hearthside by Villager and
AmeriHost Inn(R) lodging franchise systems, facilitates
the sale and exchange of vacation ownership intervals
through Resort Condominiums International, LLC, Fairfield
Resorts, Inc. and Equivest Finance, Inc. and markets
vacation rental properties in Europe through Holiday
Cottages and Cuendet.
o Our Vehicle Services segment operates and franchises our
Avis(R) car rental business; provides fleet management
and fuel card services to corporate clients and
government agencies through PHH Arval and Wright Express
and operates parking facilities in the United Kingdom
through our National Car Parks subsidiary.
o Our Travel Distribution segment provides global
distribution and computer reservation services to
airlines, hotels, car rental companies and other travel
suppliers and provides our travel agent customers the
ability to electronically access airline schedule and
fare information, book reservations, and issue tickets
through Galileo International, provides travel services
through our Cendant Travel and Cheap Tickets travel
agency businesses, and provides reservations processing,
connectivity and information management services through
WizCom.
o Our Financial Services segment provides enhancement
packages to financial institutions through FISI*Madison
LLC, provides insurance-based products to consumers
through Benefit Consultants, Inc. and Long Term Preferred
Care, Inc., provides loyalty solutions to businesses
through Cims Ltd., operates and franchises tax
preparation services through Jackson Hewitt Inc. and
provides a variety of membership programs offering
discounted products and services to consumers through our
relationship with Trilegiant Corporation.
Our principal executive offices are located at 9 West 57th Street,
New York, New York 10019. Our telephone number is (212) 413-1800. Our web
site is www.cendant.com. The information contained on our web site is not
incorporated by reference in this prospectus.
***
We seek organic growth augmented by the acquisition and
integration of complementary businesses. As a result, we are currently
engaged in a number of preliminary discussions concerning possible
acquisitions and intend to continually explore and conduct discussions with
regard to other acquisitions and other strategic corporate transactions.
The purchase price for any possible transaction may be paid in cash, stock,
other securities, borrowings, or a combination thereof. Prior to
consummating any transaction, we will need to, among other things, initiate
and satisfactorily complete our due diligence investigations; negotiate the
financial and other terms (including price) and conditions of such
transactions; obtain appropriate board of directors, regulatory and
shareholder or other necessary consents and approvals; and, if necessary,
secure financing. No assurance can be given with respect to the timing,
likelihood or business effect of any possible transaction. In the past, we
have been involved in both relatively small and significant acquisitions.
In addition, we continually review and evaluate our portfolio of
existing businesses to determine if they continue to meet our business
objectives. As part of our ongoing evaluation of such businesses, we intend
from time to time to explore and conduct discussions with regard to joint
ventures, divestitures and related corporate transactions. However, we can
give no assurance with respect to the magnitude, timing, likelihood or
financial or business effect of any possible transaction. We also cannot
predict whether any divestitures or other transactions will be consummated
or, if consummated, will result in a financial or other benefit to us. We
intend to use a portion of the proceeds from any such dispositions and cash
from operations to retire indebtedness, make acquisitions and for other
general corporate purposes.
RISK FACTORS
You should carefully consider the following risk factor and other
information contained or incorporated by reference in this prospectus
before deciding to purchase any shares of CD common stock.
We have had accounting irregularities and related litigation and
governmental investigations.
Cendant was created in December 1997, through the merger of HFS
Incorporated into CUC International, Inc. with CUC surviving and changing
its name to Cendant Corporation. On April 15, 1998, Cendant announced that
in the course of transferring responsibility for Cendant's accounting
functions from Cendant personnel associated with CUC prior to the merger to
Cendant personnel associated with HFS before the merger and preparing for
the report of first quarter 1998 financial results, Cendant discovered
accounting irregularities in some of the CUC business units. As a result,
Cendant, together with its counsel and assisted by auditors, immediately
began an intensive investigation. As a result of the findings of the
investigations, Cendant restated its previously reported financial results
for 1997, 1996 and 1995 and the six months ended June 30, 1998.
Following the April 15, 1998 announcement of the discovery of
accounting irregularities in the former business units of CUC,
approximately 70 lawsuits claiming to be class actions, three lawsuits
claiming to be brought derivatively on Cendant's behalf and several
individual lawsuits and arbitration proceedings were commenced in various
courts and other forums against Cendant and other defendants by or on
behalf of persons claiming to be stockholders of Cendant and persons
claiming to have purchased or otherwise acquired securities or options
issued by CUC or Cendant between May 1995 and August 1998.
The SEC and the United States Attorney for the District of New
Jersey have conducted investigations relating to the matters referenced
above. As a result of the findings from our internal investigations, we
made all adjustments considered necessary by Cendant, which are reflected
in our previously filed restated financial statements for the years ended
December 31, 1997, 1996 and 1995 and for the six months ended June 30,
1998. On June 14, 2000, pursuant to an offer of settlement made by Cendant,
the SEC issued an Order Instituting Public Administrative Proceedings
Pursuant to Section 21C of the Securities Exchange Act of 1934, Making
Findings and Imposing a Cease and Desist Order. In such Order, the SEC
found that we had violated certain financial reporting provisions of the
Exchange Act and ordered us to cease and desist from committing any future
violations of such provisions. No financial penalties were imposed against
us.
On December 7, 1999, we announced that we had reached a
preliminary agreement to settle the principal securities class action
pending against Cendant in the U.S. District Court in Newark, New Jersey,
brought on behalf of purchasers of all Cendant and CUC publicly traded
securities, other than PRIDES, between May 1995 and August 1998. A portion
of the PRIDES litigation had previously been settled through the issuance
of rights. Under the settlement agreement, we would pay the class members
approximately $2.85 billion in cash and 50% of any recovery we may obtain
in connection with claims we have asserted against CUC's former public
auditor. The definitive settlement document was approved by the U.S.
District Court by order dated August 14, 2000. Certain parties in the class
action appealed various aspects of the District Court's orders approving
the settlement. In August 2001, the U.S. Court of Appeals for the Third
Circuit affirmed the judgment of the District Court approving the
settlement (but remanded the case back to the District Court for further
proceedings concerning an award of fees to the class attorneys, a matter in
which we have no interest). One party in the class action has petitioned
the U.S. Supreme Court to hear her challenge to the plan of allocation of
the settlement funds among the class members. On March 18, 2002, the U.S.
Supreme Court declined to review the matter. The settlement agreement
required us to post collateral in the form of credit facilities and/or
surety bonds by November 13, 2000, which we have done. In light of the
Supreme Court's action on March 18, 2002, the settlement is required to be
fully funded by mid-July 2002.
The settlement does not encompass all litigations asserting claims
against us associated with the accounting irregularities. We do not believe
that it is feasible to predict or determine the final outcome or resolution
of these unresolved proceedings. An adverse outcome from such unresolved
proceedings could be material with respect to earnings in any given
reporting period. However, we do not believe that the impact of such
unresolved proceedings should result in a material liability to us in
relation to our financial position or liquidity.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale by any
selling stockholder of the shares of CD common stock. All proceeds from the
sale of shares of our CD common stock will go to the selling stockholders
who offer and sell their shares.
DIVIDEND POLICY
We have never paid a cash dividend on our capital stock. We do not
anticipate paying cash dividends on our capital stock in the foreseeable
future and intend to retain all earnings to finance the operations and
expansion of our business and to reduce debt. The payment of cash dividends
in the future will depend on our earnings, financial condition and capital
needs and on other factors deemed relevant by our board of directors at
that time. For further information regarding our payment of dividends, see
"Summary Comparison of Terms of Existing Common Stock with Terms of CD
Common Stock and Move.com Common Stock" in our Proxy Statement, dated
February 10, 2000, which is incorporated herein by reference.
DESCRIPTION OF CD COMMON STOCK
The following description of Cendant's CD common stock does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the more complete descriptions thereof set forth in our
Amended and Restated Certificate of Incorporation (the "Certificate") and
Amended and Restated By-Laws (the "By-Laws").
We are authorized to issue up to 2,000,000,000 shares of CD common
stock, par value $.01 per share. As of March 15, 2002, there were
982,020,341 shares of CD common stock outstanding.
General
In March 2000, our outstanding common stock was reclassified as CD
common stock, and we created a series of common stock designated as
Move.com common stock. The Move.com common stock was designed to track the
value of our Move.com Group, and the CD common stock represents our
interests in the remainder of our business and our interest in Move.com
Group. No shares of Move.com common stock are outstanding. For a
description of the terms of our CD common stock, see "Summary Comparison of
Terms of Existing Common Stock with Terms of CD Common Stock and Move.com
Common Stock" in the Proxy Statement dated February 10, 2000, which is
incorporated by reference herein.
Subject to the rights of the holders of any shares of our
preferred stock which may at the time be outstanding, holders of CD common
stock are entitled to such dividends as the Board of Directors may declare
out of funds legally available therefor. The holders of CD common stock
will possess exclusive voting rights in us, except to the extent the Board
of Directors specifies voting power with respect to any preferred stock
issued. Except as hereinafter described, holders of CD common stock are
entitled to one vote for each share of CD common stock, but will not have
any right to cumulate votes in the election of directors. In the event of
liquidation, dissolution or winding up of Cendant, the holders of CD common
stock are entitled to receive, after payment of all of our debts and
liabilities and of all sums to which holders of any preferred stock may be
entitled, the distribution of any remaining assets of Cendant. Holders of
the CD common stock will not be entitled to preemptive rights with respect
to any shares which may be issued. All outstanding shares of CD common
stock are fully paid and non-assessable. The CD common stock is listed on
the New York Stock Exchange under the symbol "CD."
Certain Provisions
The provisions of our Certificate and By-Laws which are summarized
below may be deemed to have an anti-takeover effect and may delay, defer or
prevent a tender offer or takeover attempt that a stockholder might
consider in such stockholder's best interest, including those attempts that
might result in a premium over the market price for the shares held by
stockholders.
Classified Board
Our Board of Directors is divided into three classes that are
elected for staggered three-year terms. A director may be removed by the
stockholders without cause only by the affirmative vote of the holders,
voting as a single class, of 80% or more of the total number of votes
entitled to be cast by all holders of our voting stock, which shall include
all capital stock of Cendant which by its terms may vote on all matters
submitted to stockholders of Cendant generally.
Committees of the Board of Directors
Pursuant to the Certificate, the Board of Directors' authority to
designate committees shall be subject to the provisions of the By-Laws. The
Board of Directors may designate one or more directors as alternate members
of any committee to fill any vacancy on the committee and to fill a vacant
chairmanship of a committee occurring as a result of a member or chairman
leaving the committee, whether through death, resignation, removal or
otherwise. Pursuant to the By-Laws, the Board of Directors shall have the
following committees:
Executive Committee. An Executive Committee that shall consist of
not less than three directors elected by a majority vote of the Board of
Directors.
Compensation Committee. A Compensation Committee consisting of not
less than three directors elected by a majority vote of the Board of
Directors.
Audit Committee. An Audit Committee consisting of not less than
four directors elected by a majority vote of the Board of Directors.
Newly Created Directorships and Vacancies
Newly created directorships resulting from any increase in the
number of directors and any vacancies on the Board of Directors resulting
from death, resignation, disqualification, removal or other cause shall be
filled solely by the affirmative vote of a majority of the remaining
directors then in office, even though less than a quorum of the Board of
Directors. Any directors elected in accordance with the preceding sentence
shall hold office for the remainder of the full term of the class of
directors in which the new directorship was created or the vacancy occurred
and until such director's successor shall have been elected and qualified.
No decrease in the number of directors constituting the Board of Directors
shall shorten the term of any incumbent director.
Special Meetings of Stockholders
A special meeting of stockholders may be called only by the
Chairman of the Board of Directors, the President or the Board of Directors
pursuant to a resolution approved by a majority of the entire Board of
Directors.
Quorum at Stockholder Meetings
The holders of one-third of the shares entitled to vote at any
meeting of the stockholders, present in person or by proxy, shall
constitute a quorum at all stockholder meetings.
Stockholder Action By Written Consent
Stockholder action by written consent in lieu of a meeting is
prohibited under the Certificate. As a result, stockholder action can be
taken only at an annual or special meeting of stockholders. This prevents
the holders of a majority of the outstanding voting stock of Cendant from
using the written consent procedure to take stockholder action without
giving all the stockholders of Cendant entitled to vote on a proposed
action the opportunity to participate in determining the proposed action.
Advance Notice of Stockholder-Proposed Business at Annual Meetings
Our By-Laws provide that for business to be properly brought
before an annual meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of Cendant. To be timely,
a stockholder's notice must be delivered to or mailed and received at the
principal executive offices of Cendant, not less than 60 days nor more than
90 days prior to the meeting; provided, however, that in the event that
less than 70 days' notice or prior public disclosure of the date of the
meeting is given or made to stockholders, notice by the stockholder to be
timely must be so received not later than the close of business on the
tenth day following the date on which such notice of the date of the annual
meeting was mailed or such public disclosure was made. A stockholder's
notice to the Secretary must set forth as to each matter the stockholder
proposes to bring before the annual meeting: (i) a brief description of the
business desired to be brought before the annual meeting, (ii) the name and
address, as they appear on Cendant's books, of the stockholder proposing
such business, (iii) the class and number of shares of Cendant which are
beneficially owned by the stockholder, and (iv) any material interest of
the stockholder in such business.
In addition, the By-Laws provide that for a stockholder to
properly nominate a director at a meeting of stockholders, the stockholder
must have given timely notice thereof in writing to the Secretary of
Cendant. To be timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of Cendant (i) in
the case of an annual meeting, at least 90 days prior to the date of the
last annual meeting of Cendant stockholders and (ii) with respect to a
special meeting of stockholders, the close of business on the 10th day
following the date on which notice of such meeting is first given to
stockholders. Such stockholder's notice to the Secretary must set forth:
(i) the name and address of the stockholder who intends to make the
nomination and of the person or persons to be nominated, (ii) a
representation that the stockholder is the holder of record of common stock
and intends to appear in person or by proxy at the meeting to nominate each
such nominee, (iii) a description of all arrangements between such
stockholder and each nominee, (iv) such other information with respect to
each nominee as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Commission, and (v) the consent of each
nominee to serve as director of the Company if so elected.
Fair Price Provisions
Under the Delaware General Corporation Law and the Certificate, an
agreement of merger, sale, lease or exchange of all or substantially all of
Cendant's assets must be approved by the Board of Directors and adopted by
the holders of a majority of the outstanding shares of stock entitled to
vote thereon. However, the Certificate includes what generally is referred
to as a "fair price provision," which requires the affirmative vote of the
holders of at least 80% of the outstanding shares of capital stock entitled
to vote generally in the election of Cendant's directors, voting together
as a single class, to approve certain business combination transactions
(including certain mergers, recapitalization and the issuance or transfer
of securities of Cendant or a subsidiary having an aggregate fair market
value of $10 million or more) involving Cendant or a subsidiary and an
owner or any affiliate of an owner of 5% or more of the outstanding shares
of capital stock entitled to vote, unless either (i) such business
combination is approved by a majority of disinterested directors, or (ii)
the shareholders receive a "fair price" for their securities and certain
other procedural requirements are met. The Certificate provides that this
provision may not be repealed or amended in any respect except by the
affirmative vote of the holders of not less than 80% of the outstanding
shares of capital stock entitled to vote generally in the election of
directors.
SELLING STOCKHOLDERS
We are registering shares of our CD common stock to permit the
selling stockholders to offer these shares of CD common stock for resale
from time to time. The shares of CD common stock were issued pursuant to an
exemption from the registration requirements of the Securities Act. The
selling stockholders may from time to time offer and sell pursuant to this
prospectus any or all of the shares of CD common stock listed below. When
we refer to the "selling stockholders" in this prospectus, we mean those
persons listed in the table below, as well as the pledgees, donees,
assignees, transferees, successors and others who later hold any of the
selling stockholders' interests.
The table below sets forth the name of each selling stockholder,
the number of shares of CD common stock that each selling stockholder may
offer pursuant to this prospectus and the beneficial ownership of our CD
common stock as of April 5, 2002 and after the offering. Unless set forth
below, to our knowledge, none of the selling stockholders has, or within
the past three years has had, any material relationship with us or any of
our predecessors or affiliates or beneficially owns in excess of 1% of our
outstanding CD common stock.
Since the date on which the selling stockholders provided this
information, each selling stockholder identified below may have sold,
transferred or otherwise disposed of all or a portion of their shares of CD
common stock in a transaction exempt from the registration requirements of
the Securities Act. Information concerning the selling stockholders may
change from time to time and any changed information will be set forth in
supplements to this prospectus to the extent required.
The selling stockholders may from time to time offer and sell any
or all of the shares of CD common stock under this prospectus. Because the
selling stockholders are not obligated to sell the shares of CD common
stock, we cannot estimate the number of shares of CD common stock that the
selling stockholders will hold upon consummation of any such sales.
Number of
Number of Shares of Number of Shares of CD
CD Common Stock Shares of CD Common Stock Percentage of
Beneficially Owned Common Stock Beneficially Shares of CD
Prior to the That May be Owned After Common Stock
Name Offering(1) Sold Offering(2) Outstanding(3)
---- -------------------------------------------------------------------------
Robert M. Davidson and Janice G.
Davidson, as Trustees of the
Davidson Family Trust dated
December 22, 1999................ 11,402,494(4) 336,624 11,402,494(4) 1.161%
Robert M. Davidson and Janice G.
Davidson, as Trustees of the
Elizabeth A. Davidson
Irrevocable Trust................ 2,873,286(5) 883,411 2,873,286(5) *
Robert M. Davidson and Janice G.
Davidson, as Trustees of the
Emilie A. Davidson Irrevocable
Trust............................ 2,988,186(6) 883,411 2,988,186(6) *
Robert M. Davidson and Janice G.
Davidson, as Trustees of the
John R. Davidson Irrevocable
Trust............................ 2,988,186(7) 883,411 2,988,186(7) *
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* Less than one percent (1%).
(1) Beneficial ownership is determined in accordance with the rules and
regulations of the Commission and generally includes (1) any
securities that are or will become exercisable within the next 60
days and (2) consideration of voting or investment power with respect
to the securities at issue.
(2) Assumes that each selling stockholder will sell all of such
stockholder's shares of CD common stock being registered hereby.
(3) Calculated based on 982,020,341 shares of CD common stock outstanding
as of March 15, 2002 and on each selling stockholder's beneficial
ownership of shares of our CD common stock as of April 4, 2002.
(4) Consists of: (a) 1,134,318 shares of CD common stock owned directly
by Robert M. Davidson and Janice G. Davidson which were placed in The
Davidson Family Trust dated December 22, 1999, a revocable trust for
the benefit of Mr. and Mrs. Davidson, (b) options to purchase
1,750,000 shares of CD common stock, (c) 2,541,804 shares of CD
common stock in the Elizabeth A. Davidson Irrevocable Trust, (d)
2,988,186 shares of CD common stock in the Emilie A. Davidson
Irrevocable Trust and (e) 2, 988,186 shares of CD common stock in the
John R. Davidson Irrevocable Trust. Mr. and Mrs. Davidson are
co-trustees of each of the three irrevocable trusts in clause (c),
(d) and (e), and may be deemed to have voting and investment power
with respect thereto. In addition, Mark R. Herron is a third
co-trustee of these irrevocable trusts and may also be deemed to have
voting and investment power with respect thereto.
(5) Consists of: (a) 2,541,804 shares of CD common stock in the Elizabeth
A. Davidson Irrevocable Trust and (b) 331,482 shares of CD common
stock owned individually by Elizabeth A. Davidson outside of the
trust. Elizabeth A. Davidson, the daughter of Mr. and Mrs. Davidson,
is the primary beneficiary of this trust. Robert M. Davidson, Janice
G. Davidson and Mark Herron are co-trustees of this trust and may be
deemed to have voting and investment power with respect thereto.
(6) Consists of 2,988,186 shares of CD common stock in the Emilie A.
Davidson Irrevocable Trust. Emilie A. Davidson, the daughter of Mr.
and Mrs. Davidson, is the primary beneficiary of this trust. Robert
M. Davidson, Janice G. Davidson and Mark Herron are co-trustees of
this trust and may be deemed to have voting and investment power with
respect thereto.
(7) Consists of 2, 988,186 shares of CD common stock in the John R.
Davidson Irrevocable Trust. John R. Davidson, the son of Mr. and Mrs.
Davidson is the primary beneficiary of this trust. Robert M.
Davidson, Janice G. Davidson and Mark Herron are co-trustees of this
trust and may be deemed to have voting and investment power with
respect thereto.
PLAN OF DISTRIBUTION
The selling stockholders will be offering and selling all of the
shares of CD common stock offered and sold under this prospectus. We will
not receive any of the proceeds from the offering of the shares of CD
common stock by the selling stockholders. The selling stockholders may
resell all or a portion of the shares of CD common stock covered by this
prospectus in open market transactions in reliance upon Rule 144 or Rule
144A under the Securities Act, provided they meet the criteria and conform
to the requirements of one of these rules. We are registering the shares of
CD common stock covered by this prospectus to permit holders to conduct
public secondary trading of these shares from time to time after the date
of this prospectus. We have agreed, among other things, to bear all
expenses, other than underwriting discounts and selling commissions, in
connection with the registration and sale of the shares of CD common stock
covered by this prospectus. The selling stockholders may also sell all or a
portion of the other shares of CD common stock owned by them and not
covered by this prospectus in open market transactions in reliance upon
Rule 144 or Rule 144A under the Securities Act, provided they meet the
criteria and conform to the requirements of one of these rules.
We have been advised by the selling stockholders that the selling
stockholders may sell all or a portion of the shares of CD common stock
beneficially owned by them and offered hereby from time to time:
o directly; or
o through underwriters, broker-dealers or agents, who may
receive compensation in the form of discounts,
commissions or concessions from the selling stockholders
and/or from the purchasers of the shares of CD common
stock for whom they may act as agent.
The shares of CD common stock may be sold from time to time in one
or more transactions at:
o fixed prices, which may be changed;
o prevailing market prices at the time of sale;
o varying prices determined at the time of sale; or
o negotiated prices.
These prices will be determined by the holders of the shares of CD
common stock or by, for example, agreement between these holders and
underwriters or dealers who may receive fees or commissions in connection
with the sale. The aggregate proceeds to the selling stockholders from the
sale of the shares of CD common stock offered by them hereby will be the
purchase price of the shares of CD common stock less discounts and
commissions, if any.
The sales described in the preceding paragraph may be effected in
transactions:
o on the New York Stock Exchange or any exchange on which
our shares of CD common stock may then be listed;
o in the over-the counter market;
o in transactions otherwise than on such exchanges or
services or in the over-the-counter market; or
o through the writing of options.
These transactions may include block transactions or crosses.
Crosses are transactions in which the same broker acts as an agent on both
sides of the trade.
In connection with sales of the shares of CD common stock or
otherwise, the selling stockholders may enter into hedging transactions
with broker-dealers. These broker-dealers may in turn engage in short sales
of the shares of CD common stock in the course of hedging their positions.
The selling stockholders may also sell the shares of CD common stock short
and deliver the shares of CD common stock to close out short positions, or
loan or pledge the shares of CD common stock to broker-dealers that in turn
may sell the shares of CD common stock.
To our knowledge, there are currently no plans, arrangements or
understandings between any selling stockholders and any underwriter,
broker-dealer or agent regarding the sale of the shares of CD common stock
by the selling stockholders. Selling stockholders may not sell any, or may
not sell all, of the shares of CD common stock offered by them pursuant to
this prospectus. In addition, we cannot assure you that a selling
stockholder will not transfer, devise or gift the shares of CD common stock
by other means not described in this prospectus. In addition, any shares of
CD common stock covered by this prospectus which qualify for sale pursuant
to Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144
or Rule 144A rather than pursuant to this prospectus. In addition, the
selling stockholders may also, from time to time, sell the other shares of
CD common stock that they own and that are not covered by this prospectus
under Rule 144 or Rule 144A of the Securities Act if they meet the
requirements of those rules.
The outstanding shares of CD common stock are listed for trading
on the New York Stock Exchange.
The selling stockholders and any broker and any broker-dealers,
agents or underwriters that participate with the selling stockholders in
the distribution of the shares of CD common stock may be deemed to be
"underwriters" within the meaning of the Securities Act. In this case, any
commissions received by these broker-dealers, agents or underwriters and
any profit on the resale of the shares of CD common stock purchased by them
may be deemed to be underwriting commissions or discounts under the
Securities Act. In addition, any profits realized by the selling
stockholders may be deemed to be underwriting commissions under the
Securities Act. To the extent the selling stockholders may be deemed to be
underwriters, the selling stockholders may be subject to statutory
liabilities, including, but not limited to, liability under Sections 11, 12
and 17 of the Securities Act and Rule 10b-5 under the Exchange Act.
Because the selling stockholders may be deemed to be underwriters
within the meaning of Section 2(11) of the Securities Act, they will be
subject to the prospectus delivery requirements of the Securities Act. At
any time a particular offer of the shares of CD common stock is made, a
revised prospectus or prospectus supplement, if required, will be
distributed which discloses:
o the name of the selling stockholders and any
participating underwriters, broker-dealers or agents;
o the aggregate amount and type of securities being
offered;
o the price at which the securities were sold and other
material terms of the offering;
o any discounts, commissions, concessions or other items
constituting compensation from the selling stockholders
and any discounts, commissions or concessions allowed or
reallowed or paid to dealers; and
o that the participating broker-dealers did not conduct any
investigation to verify the information in this
prospectus or incorporated in this prospectus by
reference.
The prospectus supplement or a post-effective amendment will be
filed with the Commission to reflect the disclosure of additional
information with respect to the distribution of the shares of CD common
stock. In addition, if we receive notice from a selling stockholder that a
donee or pledgee intends to sell more than 500 shares of our CD common
stock, a supplement to this prospectus will be filed.
We have agreed to indemnify each selling stockholder, and each
selling stockholder has agreed to indemnify us, our directors, our officers
who sign the registration statement to which this prospectus relates and
each person, if any, who controls Cendant within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, against
specified liabilities arising under the Securities Act.
The selling stockholders and any other person participating in
such distribution will be subject to the Exchange Act. The Exchange Act
rules include, without limitation, Regulation M, which may limit the timing
of purchases and sales of any of the shares of CD common stock by the
selling stockholders and any such other person. In addition, Regulation M
of the Exchange Act may restrict the ability of any person engaged in the
distribution of the shares of CD common stock to engage in market-making
activities with respect to the particular shares of CD common stock being
distributed for a period of up to five business days prior to the
commencement of distribution. This may affect the marketability of the
shares of CD common stock and the ability of any person or entity to engage
in market-making activities with respect to the shares of CD common stock.
We have agreed to use our commercially reasonable best efforts to
keep the registration statement of which this prospectus is a part
effective until the earlier of:
o two years after the date of original issuance of the
shares of CD common stock;
o the date when the selling stockholders may sell the
shares of CD common stock pursuant to Rule 144 under the
Securities Act without any limitations under clauses (c),
(e), (f) and (g) of Rule 144 under the Securities Act;
and
o the date when all of the shares of CD common stock
registered under this registration statement are sold.
Our obligation to keep the registration statement to which this
prospectus relates effective is subject to certain permitted exceptions. In
these cases, we may prohibit offers and sales of the shares of CD common
stock pursuant to the registration statement to which this prospectus
relates. In addition, we may suspend the use of this prospectus if we learn
of any event that causes this prospectus to include an untrue statement of
a material fact required to be stated in the prospectus or necessary to
make the statements in the prospectus not misleading in light of the
circumstances then existing. If this type of event occurs, a prospectus
supplement or post-effective amendment, if required, will be distributed to
each selling stockholder. Each selling stockholder has agreed not to trade
shares of CD common stock from the time the selling stockholder receives
notice from us of this type of event until the selling stockholders
receives a prospectus supplement or amendment. These time periods will not
exceed 30 days in any 90-day period or an aggregate of 90 days in any
12-month period.
LEGAL MATTERS
Certain legal matters with respect to the shares of CD common
stock will be passed upon for us by Eric J. Bock, Esq., Senior Vice
President, Law and Secretary of Cendant. Mr. Bock holds shares of CD common
stock and options to acquire shares of CD common stock.
EXPERTS
The consolidated financial statements of Cendant Corporation and
subsidiaries incorporated in this prospectus by reference from our Annual
Report on Form 10-K for the year ended December 31, 2001 have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report
(which expresses an unqualified opinion and includes an explanatory
paragraph relating to the modification of accounting for interest income
and impairment of beneficial interests in securitization transactions, the
accounting for derivative instruments and hedging activities and the
revision of certain revenue recognition policies as discussed in Note 1),
which is incorporated herein by reference, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Cendant is subject to the informational requirements of the
Exchange Act, and in accordance therewith files reports, proxy statements
and other information with the Commission. Such reports, proxy statements
and other information can be inspected and copied at prescribed rates at
the public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Regional
Office of the Commission located at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, IL 60661. The Commission also
maintains a website that contains reports, proxy and information statements
and other information. Please call the Commission at 1-800-SEC-0330 for
further information on the public reference rooms. The website address is
http://www.sec.gov. In addition, such material can be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.