AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 2, 1999
REGISTRATION NO.
333-
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CENDANT CORPORATION DELAWARE 06-0918165
CENDANT CAPITAL III DELAWARE 22-356523
CENDANT CAPITAL IV DELAWARE 30-90790
CENDANT CAPITAL V DELAWARE 30-91188
(exact name of the registrants (State or other (I.R.S. Employer
as specified in their Jurisdiction of Identification No.)
respective charters) Incorporation or
Organization)
9 WEST 57TH STREET
NEW YORK, NY 10019
(212) 413-1800
FAX: (212) 265-1232
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
JAMES E. BUCKMAN, ESQ.
VICE CHAIRMAN
AND GENERAL COUNSEL
CENDANT CORPORATION
9 WEST 57TH STREET
NEW YORK, NY 10019
(212) 413-1800
FAX: (212) 413-1923
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
COPIES TO:
VINCENT J. PISANO, ESQ. ERIC J. BOCK, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP VICE PRESIDENT-LEGAL
919 THIRD AVENUE CENDANT CORPORATION
NEW YORK, NY 10022 9 WEST 57TH STREET
(212) 735-3000 NEW YORK, NY 10019
FAX: (212) 735-2000 (212) 413-1800
FAX: (212) 413-1922
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement
as determined by market conditions.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act of 1933, as
amended please check the following box and list the Securities Act
Registration Statement Number of the earlier Effective Registration
Statement for the same offering. [ ]
If this Form is a Post-Effective Amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, as amended, check the following
box and list the Securities Act Registration Statement Number of the
earlier Effective Registration Statement for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
TITLE OF SECURITIES AMOUNT TO BE PROPOSED PROPOSED AMOUNT OF
TO BE REGISTERED REGISTERED MAXIMUM MAXIMUM REGISTRATION
OFFERING PRICE AGGREGATE FEE
PER OFFERING
SECURITY(1) PRICE(1)
Debentures(2)
Common Stock, $.01 par
value(3)
Stock Purchase Contracts(4)
Stock Purchase Units(5)
Trust Preferred Securities
of Cendant Capital III,
IV and V(6)
Guarantees and Backup
Undertakings of Cendant
Corporation in connection
with Preferred Securities
of Cendant Capital III, IV
and V(7)
Total 100%(9) $ (8) $247,648(9)
- ------------------------
(1) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(o).
(2) Subject to note (8) below, there are being registered hereunder an
indeterminate principal amount of debt securities which will be
issued and sold by Cendant to the Cendant trusts, which may later
be distributed to the holders of Trust Preferred Securities upon a
dissolution of a Cendant trust and a distribution of the assets
thereof.
(3) Subject to note (8) below, there are being registered hereunder an
indeterminate number of shares of Common Stock as shall be issuable
upon settlement of the Stock Purchase Contracts.
(4) Subject to note (8) below, there are being registered hereunder an
indeterminate number of Stock Purchase Contracts.
(5) Subject to note (8) below, there are being registered hereunder an
indeterminate number of Stock Purchase Units.
(6) Subject to note (8) below, there are being registered hereunder an
indeterminate amount of Trust Preferred Securities.
(7) Includes the rights of holders of the Trust Preferred Securities
under the Guarantees and back-up undertakings, consisting of
obligations by Cendant to provide various indemnities in respect
of, and pay and be responsible for various expenses, costs,
liabilities, and debts of, Cendant Capital III, Cendant Capital IV
and Cendant Capital V as set forth in the applicable Amended and
Restated Declaration of Trust, the Indenture and as further
described in the Registration Statement. No separate consideration
will be received for the Guarantees or any back-up undertakings.
(8) In no event will the aggregate initial offering price of all
securities issued pursuant to this Registration Statement exceed
$445,410,000. Any securities registered hereunder may be sold
separately or as units with other securities registered hereunder.
(9) The registration fee is based on the consideration to be paid for
the Stock Purchase Units. The consideration per Stock Purchase
Unit, for purposes of calculating the registration fee, is equal to
105% of the theoretical value of the current FELINE PRIDES, which,
if issued as of the close of business on September 1, 1999 would have
been $28.28.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
[FLAG]
Information contained herein is subject to completion or amendment.
This Preliminary prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of
these securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction.
SUBJECT TO COMPLETION DATED SEPTEMBER 2, 1999
PROSPECTUS
$445,410,000
CENDANT CORPORATION
DEBT SECURITIES, COMMON STOCK,
STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
------------------
CENDANT CAPITAL III
CENDANT CAPITAL IV
CENDANT CAPITAL V
TRUST PREFERRED SECURITIES
GUARANTEED AS PROVIDED HEREIN BY
CENDANT CORPORATION
----------------
Cendant Corporation may offer debt securities, stock purchase
contracts, stock purchase units and common stock.
Cendant Capital III, Cendant Capital IV and Cendant Capital V may
offer trust preferred securities that will be guaranteed by Cendant
Corporation to the extent described in this prospectus.
These securities may be offered from time to time, in amounts, on
terms and at prices that will be determined at the time they are offered
for sale. These terms and prices will be described in more detail in one or
more supplements to this prospectus, which will be distributed at the time
the securities are offered.
This offering is made pursuant to a court approved settlement,
entered into by Cendant Corporation on March 17, 1999.
----------------
This prospectus may not be used to sell any of the securities
unless it is accompanied by a prospectus supplement.
----------------
The common stock is listed on the New York Stock Exchange under the
trading symbol "CD." Each prospectus supplement offering any other
securities will state whether those securities are listed or will be listed
on any national securities exchange.
----------------
The securities may be sold to or through underwriters, through
dealers or agents, directly to purchasers or through a combination of these
methods. If an offering of securities involves any underwriters, dealers or
agents, then the applicable prospectus supplement will name the
underwriters, dealers or agents and will provide information regarding any
fee, commission or discount arrangements made with those underwriters,
dealers or agents.
----------------
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these securities or
determined if this prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
The date of this prospectus is , 1999.
TABLE OF CONTENTS
PROSPECTUS SUMMARY........................................................1
FORWARD-LOOKING INFORMATION...............................................3
THE COMPANY...............................................................4
THE CENDANT TRUSTS........................................................7
RATIO OF EARNINGS TO FIXED CHARGES........................................8
USE OF PROCEEDS...........................................................9
DESCRIPTION OF THE DEBT SECURITIES........................................9
DESCRIPTION OF COMMON STOCK..............................................20
DESCRIPTION OF TRUST PREFERRED SECURITIES OF THE CENDANT TRUSTS..........22
DESCRIPTION OF TRUST GUARANTEES..........................................24
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS.........27
PLAN OF DISTRIBUTION.....................................................27
LEGAL OPINIONS...........................................................28
EXPERTS .................................................................28
WHERE YOU CAN FIND MORE INFORMATION......................................28
PROSPECTUS SUMMARY
Four related companies will be offering the securities described in
this prospectus. These companies are Cendant Corporation, or Cendant, and
its wholly-owned subsidiaries, Cendant Capital III, Cendant Capital IV and
Cendant Capital V. The following table lists the securities to be offered
by each company:
Cendant Capital III, Cendant Capital IV ........ Trust preferred securities
and Cendant Capital V (each
a "Cendant trust")(guaranteed as
provided here by Cendant)
Cendant Corporation ("Cendant")............ Stock purchase contracts
Stock purchase units
Common stock
Debt securities
THE COMPANY
CENDANT
Cendant is one of the foremost consumer and business services
companies in the world. Cendant was created through the merger of HFS
Incorporated into CUC International in December 1997 with the resultant
corporation being renamed Cendant Corporation. Cendant provides the
fee-based services formerly provided by each of CUC and HFS, including
travel services, real estate services and membership-based consumer
services, to its customers throughout the world.
Cendant operates in four principal divisions: travel related
services, real estate related services, direct marketing related services
and other consumer and business services. Cendant's businesses provide a
wide range of complementary consumer and business services, which together
represent eight business segments.
o The travel related service businesses facilitate vacation
timeshare exchanges, and franchise car rental and hotel
businesses.
o The real estate related service businesses franchise real
estate brokerage businesses, provide home buyers with
mortgages and assist in employee relocation.
o The direct marketing related service businesses provide an
array of value driven products and services.
o The other consumer and business services include Cendant's
tax preparation services franchise, information technology
services, car parks and vehicle emergency support and rescue
services in the United Kingdom, financial products and other
consumer-related services.
As a franchisor of hotels, residential real estate brokerage
offices, car rental operations and tax preparation services, Cendant
licenses the owners and operators of independent businesses to use its
brand names. Cendant does not own or operate hotels, real estate brokerage
offices, car rental operations or tax preparation offices, except for
various company-owned Jackson Hewitt offices which Cendant intends to
franchise. Instead, Cendant provides its franchisee customers with services
designed to increase their revenue and profitability. Cendant's principal
executive offices are located at 9 West 57th Street, New York, New York
10019 and its telephone number is (212) 413-1800.
THE CENDANT TRUSTS
Each of the Cendant trusts is a business trust that was created
under the laws of the State of Delaware. Cendant is the sponsor of each
Cendant trust and owns all of the common securities of each Cendant trust.
Each Cendant trust is managed by three trustees. Cendant may dissolve any
Cendant trust at any time. Each Cendant trust's address is in care of
Cendant. Each Cendant trust's telephone number is (212) 413-1800.
THE SECURITIES
The securities that may be sold under this prospectus are:
Cendant's debt securities, common stock, stock purchase contracts relating
to the common stock; each trusts' trust preferred securities, which will be
guaranteed by Cendant; and stock purchase units consisting of stock
purchase contracts and trust preferred securities. The aggregate initial
offering price of all of the securities to be sold will not exceed $ . At
the time any of these securities are offered, a prospectus supplement will
be distributed that will describe in more detail the specific terms and
price of the securities being sold and whether those securities will be
sold to or through underwriters or by another means of distribution.
STOCK PURCHASE CONTRACTS AND COMMON STOCK
Cendant may offer stock purchase contracts for the purchase of its
common stock, without stated value. The common stock is listed on the New
York Stock Exchange. The price and terms of the stock purchase contracts
will be determined at the time or times of offering. If Cendant offers its
stock purchase contracts, a prospectus supplement will provide information
about the terms of the offering, including the amount of common stock to be
sold, the purchase price of the common stock, the date or dates on which
the common stock will be purchased and any amounts that Cendant may be
required to pay to the holders of the stock purchase contracts.
TRUST PREFERRED SECURITIES
Each Cendant trust may offer its trust preferred securities, each
of which will represent an undivided beneficial ownership interest in the
assets of each Cendant trust. The price and terms of the trust preferred
securities will be determined at the time of offering. If a Cendant trust
offers its trust preferred securities, a prospectus supplement will provide
information about the terms of the offering, including the specific title
of the trust preferred securities, the aggregate number of trust preferred
securities to be sold, the stated liquidation amount and information
regarding the rights of holders of trust preferred securities to receive
cumulative cash distributions. This will include information regarding the
rate of payment, whether distributions can be extended or deferred, and
whether the trust preferred securities can be redeemed. Payments with
respect to the trust preferred securities will be fully and unconditionally
guaranteed by Cendant to the extent described in the prospectus supplement.
In connection with any sale of the trust preferred securities, each
Cendant trust will sell common securities to Cendant, each of which will
represent an undivided beneficial ownership interest in the assets of a
Cendant trust. Each Cendant trust expects to use the proceeds from the sale
of any trust preferred securities and common securities (collectively, the
"trust securities") to purchase debt securities from Cendant. The debt
securities may give Cendant the right to defer payments of interest on the
debt securities. If Cendant decides to defer interest payments on the debt
securities, then any distributions on the trust preferred securities would
be similarly deferred. At any time interest payments are being deferred,
Cendant would not be able to declare or pay any cash distributions with
respect to its respective capital stock or any debt securities ranking
junior to the debt securities. Holders of trust preferred securities would
not lose their cash distributions; rather, interest would continue to
accrue on the debt securities, and, as a result, distributions would
continue to accumulate on the trust preferred securities until paid. The
prospectus supplement will provide more detailed information about
Cendant's right to defer interest payments on the debt securities and the
impact of deferral upon the holders of trust preferred securities.
STOCK PURCHASE UNITS
Cendant may offer stock purchase units, each of which will consist of
o a stock purchase contract and
o a trust preferred security, debt security or U.S. treasury
security. The trust preferred security, debt security or
U.S. treasury security will be pledged as collateral to
secure the holder's obligation to purchase common shares
under the stock purchase contract. If Cendant offers stock
purchase units, a prospectus supplement will provide
information about the terms of the offering, including the
specific terms of the stock purchase contracts and
information about the security or obligation that will
secure the holder's obligation to purchase common shares.
DEBT SECURITIES
Cendant may offer and sell to each Cendant trust a series of debt
securities, which each Cendant trust would purchase with the proceeds from
the sale of its trust preferred securities to the public and the sale of
its common securities to Cendant. The debt securities would be the sole
assets of each Cendant trust. If Cendant sells debt securities to any
Cendant trust, a prospectus supplement will provide specific information
about the debt securities, including their specific designation, aggregate
principal amount, denominations, date of maturity, interest rate which may
be fixed or variable, the dates upon which interest will be paid and
whether payments of interest may be deferred. The prospectus supplement
also will indicate whether the debt securities are redeemable or
convertible or exchangeable into other securities, and whether the debt
securities contain any sinking fund provisions or any other special terms.
As described above under "-trust preferred securities," the debt
securities may give Cendant the right to defer payments of interest on the
debt securities. If so, the prospectus supplement will provide more
detailed information about this right.
FORWARD-LOOKING INFORMATION
Some of the matters discussed in this prospectus, in any
accompanying prospectus supplement and in the documents incorporated by
reference in this prospectus or accompanying prospectus supplement contain
forward-looking statements within the meaning of the securities laws.
Forward-looking statements include terms such as "may," "will," "expect,"
"believe," "plan" and other similar terms. Cendant and the Cendant trusts
each cautions that, while each of them believes those statements to be
based on reasonable assumptions and makes those statements in good faith,
there can be no assurance that the actual results will not differ
materially from these assumptions or that the expectations provided in the
forward-looking statements derived from these assumptions will be realized.
Cendant should be aware of important factors that could have a material
impact on future results. These factors include, but are not limited to:
o the resolution or outcome of the pending litigation and
government investigations relating to the previously
announced accounting irregularities;
o uncertainty as to Cendant's future profitability and
Cendant's ability to integrate and operate successfully
acquired businesses and the risks associated with those
businesses, including the merger that created Cendant and
the NPC acquisition;
o Cendant's ability to successfully divest non-strategic
assets and implement its new Internet strategy;
o Cendant's ability to develop and implement operational and
financial systems to manage rapidly growing operations;
o competition in Cendant's existing and potential future lines
of business;
o Cendant's ability to obtain financing on acceptable terms to
finance its growth strategy and to operate within the
limitations imposed by financing arrangements; and
o Cendant's ability and its vendors', franchisees' and
customers' ability to complete the necessary actions to
achieve a Year 2000 conversion for computer systems and
applications.
THE COMPANY
OVERVIEW
Cendant is one of the foremost consumer and business services
companies in the world. Cendant was created through the merger of HFS into
CUC in December 1997 with the resultant corporation being renamed Cendant
Corporation. Cendant provides the fee-based services formerly provided by
each of CUC and HFS, including travel services, real estate services and
membership-based consumer services, to its customers throughout the world.
Cendant operates in four principal divisions: travel related
services, real estate related services, direct marketing related services
and other consumer and business services. Cendant's businesses provide a
wide range of complementary consumer and business services, which together
represent eight business segments.
o The travel related service businesses facilitate vacation
timeshare exchanges, and franchise car rental and hotel
businesses.
o The real estate related service businesses franchise real
estate brokerage businesses, provide home buyers with
mortgages and assist in employee relocation.
o The direct marketing related service businesses provide an
array of value driven products and services.
o Cendant's other consumer and business services include its
tax preparation services franchise, information technology
services, car parks and vehicle emergency support and rescue
services in the United Kingdom, financial products and other
consumer-related services.
As a franchisor of hotels, residential real estate brokerage
offices, car rental operations and tax preparation services, Cendant
licenses the owners and operators of independent businesses to use its
brand names. Cendant does not own or operate hotels, real estate brokerage
offices, car rental operations or tax preparation offices, except for
various company-owned Jackson Hewitt offices which Cendant intends to
franchise. Instead, Cendant provides its franchisee customers with services
designed to increase their revenue and profitability.
MATTERS RELATING TO THE ACCOUNTING IRREGULARITIES AND ACCOUNTING POLICY CHANGE
Accounting Irregularities
On April 15, 1998, Cendant announced that in the course of
transferring responsibility for its 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 reporting of
first quarter 1998 financial results, it 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. In addition, Cendant's audit committee engaged
Willkie Farr & Gallagher as special legal counsel and Wilkie Farr engaged
Arthur Andersen LLP to perform an independent investigation into these
accounting irregularities.
On July 14, 1998, Cendant announced that the accounting
irregularities were greater than those initially discovered in April and
that the irregularities affected the accounting records of the majority of
the CUC business units. On August 13, 1998, Cendant announced that its
investigation was complete. On August 27, 1998, Cendant announced that its
audit committee had submitted its report to the board of directors on the
audit committee investigation into the accounting irregularities and its
conclusions regarding responsibility for those actions. A copy of the audit
committee's report has been filed as an exhibit to Cendant's report on Form
8-K dated August 28, 1998.
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 and 1997. The 1997 restated amounts also
included adjustments related to the former HFS businesses which are
substantially comprised of $47.8 million in reductions to merger-related
costs and other unusual charges ("Unusual Charges") and a $14.5 million
decrease in pre-tax income excluding Unusual Charges, which on a net basis
increased 1997 net income from continuing operations. The 1997 annual and
six months results have also been restated for a change in accounting,
effective January 1, 1997, related to revenue and expense recognition for
memberships with a full refund offer.
Class Action Litigation and Government Investigation
Since the April 15, 1998 announcement of the discovery of potential
accounting irregularities in the former business units of CUC, more than 70
lawsuits claiming to be class actions, two lawsuits claiming to be brought
derivatively on behalf of Cendant and several other lawsuits and
arbitration proceedings have been commenced in various courts and other
forums against Cendant and other defendants by or on behalf of persons
claiming to have purchased or otherwise acquired securities or options
issued by CUC or Cendant between May 1995 and August 1998. The Court has
ordered consolidation of many of the actions.
In addition, in October 1988, an action claiming to be a class
action was filed against Cendant and four of Cendant's former officers and
directors by persons claiming to have purchased American-Bankers' stock
between January and October 1998. The complaint claimed that Cendant made
false and misleading public announcements and filings with the SEC in
connection with our proposed acquisition of American Bankers allegedly in
violation of Sections 10(b) and 20(a) of the Securities Act of 1934, as
amended, and that the plaintiff and the alleged class members purchased
American Bankers' securities in reliance on these public announcements and
filings at inflated prices. On April 26, 1999, the United States District
Court of New Jersey found that the class action failed to state a claim
upon which relief could be granted and, accordingly, dismissed the
complaint. The plaintiff has appealed the District Court's findings to the
U.S. Court of Appeals for the Third Circuit.
As previously disclosed, Cendant reached an agreement with
plaintiffs' counsel representing the class holders of Cendant's PRIDES
securities who purchased their securities on or prior to April 15, 1998 to
settle their class action lawsuit against Cendant through the issuance of a
new "Right" for each PRIDES security held.
The SEC and the United States Attorney for the District of New
Jersey are conducting investigations relating to the matters referenced
above. The SEC staff has advised Cendant that its inquiry should not be
construed as an indication by the SEC or its staff that any violations of
law have occurred. As a result of the findings from the investigations,
Cendant made all adjustments considered necessary which are reflected in
its restated financial statements. Cendant does not expect that additional
adjustments will be necessary as a result of these government
investigations.
Other than the PRIDES litigation, Cendant does not believe that it
is feasible to predict or determine the final outcome or resolution of
these proceedings and investigations or to estimate the amounts or
potential range of loss with respect to these proceedings and
investigations. The possible outcomes or resolutions of the proceedings
could include a judgment against Cendant or settlements and could require
substantial payments by Cendant. In addition, the timing of the final
resolution of the proceedings or investigations is uncertain. Cendant
believes that material adverse outcomes with respect to such proceedings or
investigations could have a material impact on its financial position,
results of operations or cash flows.
FELINE PRIDES LITIGATION AND LITIGATION SETTLEMENT
In February 1998, Cendant, together with Cendant Capital I, a
Delaware business trust wholly owned by Cendant, sold an aggregate of
29,900,000 current FELINE PRIDES. Cendant sold the current FELINE PRIDES
through a public offering under to a registration statement on Form S-3,
and a prospectus and prospectus supplement each dated February 24, 1998.
The current FELINE PRIDES began trading on the NYSE on or about February
25, 1998.
Following Cendant's announcement of potential accounting
irregularities on April 15, 1998, eight suits were commenced against
Cendant, Cendant's present and former officers, Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities, Inc.
and Ernst & Young, LLP, by persons who had acquired or purchased Cendant's
current FELINE PRIDES. A lead plaintiff was selected to represent all
persons who purchased or acquired current FELINE PRIDES during the period
of February 24, 1998 through and including April 15, 1998 and who purchased
or acquired current FELINE PRIDES in the open market during the period of
April 16, 1998 through and including July 15, 1998. Kirby McInerney &
Squire, LLP, is plaintiffs' lead counsel. An amended and consolidated class
action complaint was filed in the consolidated action, which is entitled In
Re Cendant Corporation PRIDES Litigation and is pending in the United
States District Court for the District of New Jersey. The complaint asserts
claims arising under sections 11, 12(a)(2) and 15 of the Securities Act of
1933, and sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
The complaint alleges that the registration statement, prospectus and
prospectus supplement for the current FELINE PRIDES offering contained
materially false and misleading statements due to the accounting
irregularities discussed above and that Cendant made other misstatements
and omissions of material fact on and after April 15, 1998.
On March 17, 1999, Cendant reached a final agreement to settle the
class action lawsuit that was brought on behalf of the holders of Income or
Growth FELINE PRIDES ("PRIDES") securities who purchased their securities
on or prior to April 15, 1998, the date on which Cendant announced the
discovery of accounting irregularities in the former business units of CUC.
Under the terms of the final agreement, only holders who owned PRIDES at
the close of business on April 15, 1998 will be eligible to receive a new
additional "Right" for each PRIDES security held. Right holders may (a)
sell them or (b) exercise them by delivering to Cendant, three Rights
together with two PRIDES in exchange for two New PRIDES (the "New PRIDES"),
for a period beginning upon distribution of the Rights and concluding upon
expiration of the Rights (February 2001).
The terms of the NEW PRIDES will be the same as the original PRIDES
except that the conversion rate will be revised so that, at the time the
Rights are distributed, each New PRIDES will have a value equal to $17.57
more than each original PRIDES, or, in the aggregate, approximately $351.0
million. The final agreement also requires Cendant to offer to sell four
million additional PRIDES (having identical terms to currently outstanding
PRIDES) to holders of Rights for cash, at a value which will be based on
the valuation model that will be utilized to set the conversion rate of the
New York PRIDES. The offering of additional PRIDES will be made only
pursuant to a prospectus filed with the SEC. Cendant currently expects to
use te proceeds of such offering to pay indebtedness, repurchase its common
stock and for other general corporate purposes.
The arrangement to offer additional PRIDES is designed to enhance
the trading value of the Rights by removing up to six million Rights from
circulation via exchanges associated with the offering and to enhance the
open market liquidity of the New PRIDES by creating four million New PRIDES
via exchanges associated with the offering. If holders of Rights do not
acquire all such additional PRIDES, under certain circumstances they will
be offered to the public. Under the settlement agreement, Cendant also
agreed to file a shelf registration statement for an additional 15 million
special PRIDES to holders of Rights at a price in cash equal to 105% of
their theoretical value. The special PRIDES, if issued, would have the same
terms as the currently outstanding PRIDES and could be used to exercise
Rights.
Based on a market price of $18.625 the closing price per share of
Cendant's common stock on August 9, 1999, the effect of the issuance of the
New PRIDES will be to distribute approximately 18 million more of the
shares of Cendant's common stock when the mandatory purchase of Cendant's
common stock associated with the PRIDES occurs in February 2001.
On June 15, 1999, the United States District Court for the District
of New Jersey entered an order and judgment approving the settlement
described above and awarding fees to counsel to the class. One objector,
who objected to a portion of the issuance of the settlement notice
concerning fees to be sought by counsel to the class and the amount of fees
to be sought by counsel to the class, has filed an appeal to the U.S. Court
of Appeals for the Third Circuit from the District Court order approving
the settlement and awarding fees to counsel to the class. Although under
the settlement, the Rights are required to be distributed following the
conclusion of court proceedings, including appeals, Cendant believes that
the appeal is without merit. As a result, Cendant presently intends to
distribute the Rights in September or October 1999 after the effectiveness
of the registration statement filed with the SEC covering the New PRIDES.
In addition, Cendant is obligated under the settlement to advance
or pay, as incurred, the reasonable costs of:
o assembling the list of class members;
o printing, mailing and publishing the notices;
o reimbursing brokers or nominees for costs in identifying
and/or forwarding notices to class members or their
nominees;
o all listing, SEC registration and filing fees, and other
costs associated with issuance of the rights and the new
FELINE PRIDES;
o the settlement administrator, which costs will not exceed
$160,000; and
o other similar cash costs associated with the implementation
of the settlement. Cendant is also obligated to pay the
reasonable expenses of the law firm of Squadron, Ellenoff,
Plesent & Sheinfeld, LLP, retained to assist lead
plaintiffs' counsel in drafting appropriate portions of the
stipulation. Additionally, Cendant will be solely
responsible for the costs identified in this section if the
settlement is ultimately not consummated.
Based on the settlement agreement, Cendant recorded an after tax
charge of approximately $228 million, or $0.26 per diluted share, which is
$351 million pre-tax, in the fourth quarter of 1998 associated with the
agreement in principle to settle the FELINE PRIDES securities class action.
Cendant recorded an increase in additional paid-in capital of $350 million
offset by a decrease in retained earnings of $228 million resulting in a
net increase in stockholders' equity of $122 million as a result of the
prospective issuance of the common stock. As a result, the settlement
should not reduce net book value. In addition, the settlement is not
expected to reduce 1999 earnings per share unless Cendant's common stock
price materially appreciates.
THE CENDANT TRUSTS
Each of the Cendant trusts is a statutory business trust formed
under Delaware law pursuant to
o a declaration of trust executed by Cendant as sponsor for
each trust and the Cendant trustees of each trust and
o the filing of a certificate of trust with the Secretary of
State of the State of Delaware.
Each Cendant trust exists for the exclusive purposes of
o issuing and selling the trust preferred securities and
common securities representing common undivided beneficial
interests in its assets,
o using the gross proceeds from the sale of its trust
securities to acquire the debt securities and
o engaging in only those other activities necessary,
appropriate, convenient or incidental to these purposes.
All of the common securities will be directly or indirectly owned
by Cendant. The common securities will rank equably, and payments on them
will be made proportionately, with the trust preferred securities. However,
if an event of default under the declaration has occurred and is
continuing, the rights of the holders of the common securities to payment
in respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the trust
preferred securities. Cendant will directly or indirectly acquire common
securities in an aggregate liquidation amount equal to at least 3% of the
total capital of each Cendant trust.
Unless otherwise specified in the applicable prospectus supplement,
each Cendant trust has a term of up to 55 years but may terminate earlier,
as provided in the Declaration. Each Cendant trust's business and affairs
will be conducted by the trustees (the "Cendant trustees") appointed by
Cendant as the direct or indirect holder of all of the common securities.
The holder of the common securities will be entitled to appoint, remove or
replace any of, or increase or reduce the number of, the Cendant trustees
of each Cendant trust. The duties and obligations of the Cendant trustees
shall be governed by the declaration of that Cendant trust. A majority of
the Cendant trustees (the "regular trustees") of each Cendant trust will be
persons who are employees or officers of or who are affiliated with
Cendant. One Cendant trustee of each Cendant trust will be a financial
institution (the "institutional trustee") that is not affiliated with
Cendant and has a minimum amount of combined capital and surplus of not
less than $50,000,000, which shall act as property trustee and as indenture
trustee for the purposes of compliance with the provisions of Trust
Indenture Act of 1939, under the terms provided in the applicable
prospectus supplement. In addition, unless the institutional trustee
maintains a principal place of business in the State of Delaware and
otherwise meets the requirements of applicable law, one Cendant trustee of
each Cendant trust will be an entity having a principal place of business
in, or a natural person resident of, the State of Delaware (the "Delaware
Trustee"). Cendant will pay all fees and expenses related to the Cendant
trust and the offering of the trust securities.
Unless otherwise specified in the applicable prospectus supplement,
the institutional trustee and Delaware trustee for each Cendant trust shall
be Wilmington Trust Company, and its address in the State of Delaware is
Rodney Square, North, 1100 North Market Street, Wilmington, Delaware 19890.
The principal place of business of each Cendant trust shall be c/o Cendant
Corporation, 6 Sylvan Way, Parsippany, New Jersey 07054, telephone (973)
428-9700.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed
charges of Cendant for the fiscal years ended December 31, 1995, 1996, 1997
and 1998 and for the six months ended June 30, 1999. For the purpose of
calculating this ratio, "earnings" consist of income from continuing
operations before income taxes plus fixed charges, and "fixed charges"
consist of interest on all indebtedness, amortization of debt expense, the
portion of rental expenses on operating leases deemed to be representative
of the interest factor, and preferred stock dividend requirements of
consolidated subsidiaries.
HISTORICAL
--------------------------------------------------------------------------
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED -------------------------------------------------------
JUNE 30, 1999 1998 1997 1996 1995
------------- ---- ---- ---- ----
Ratio of Earnings to
Fixed Charges(1)....... 4.56x 1.29x 1.44x 2.60x 2.08x
- --------------
(1) For the six months ended June 30, 1999, income from the continuing
operations before income taxes and minority interest includes
non-recurring charges of ($36,900,000) and a net gain on
disposition of businesses of $749,500,000. Excluding such items,
the ratio of earnings to fixed charges for the six months ended
June 30, 1999 is 2.59x.
USE OF PROCEEDS
Unless otherwise provided in a prospectus supplement, the net
proceeds from the offering of the securities will be used for general
corporate purposes, which may include acquisitions, repayment of other
debt, acquisition of Cendant's common stock, working capital and capital
expenditures. When a particular series of securities is offered, the
applicable prospectus supplement will describe Cendant's intended use for
the net proceeds received for the sale of securities. Pending application
for specific purposes, the net proceeds may be invested in short-term
marketable securities.
DESCRIPTION OF THE DEBT SECURITIES
The debt securities may be offered from time to time by Cendant as
senior debt securities and/or as subordinated debt securities. The senior
debt securities will be issued under the senior indenture, as it may be
supplemented from time to time, between Cendant and The Bank of Nova Scotia
Trust Company of New York, as senior trustee. The subordinated debt
securities will be issued under the subordinated indenture, as it may be
supplemented from time to time, between Cendant and The Bank of Nova Scotia
Trust Company of New York, as the subordinated trustee. The term "trustee",
as used here, refers to either the senior trustee or the subordinated
trustee, as appropriate. The forms of the senior indenture and the
subordinated indenture, which are sometimes referred to here collectively
as the "indentures" and individually as an "indenture", have been filed as
exhibits to the registration statement. The terms of the indentures are
also governed by the applicable provisions of the Trust indenture Act of
1939. The following summary of material provisions of the debt securities
does not purport to be complete and is qualified in its entirety by
reference to the indentures.
GENERAL
The indentures will provide for the issuance of debt securities in
series up to the aggregate amount from time to time authorized by Cendant
for each series. A prospectus supplement will provide the following terms,
to the extent these terms are applicable to the debt securities, and
information relating to the debt securities in respect of which this
prospectus is delivered:
o the designation of the debt securities;
o classification as senior or subordinated debt
securities;
o the aggregate principal amount of the debt securities;
o the percentage of the principal amount at which the
debt securities will be issued;
o the date or dates on which the debt securities will
mature;
o the rate or rates, if any, per year, at which the debt
securities will bear interest, or the method of
determination of that rate or rates;
o the times and places at which the interest, if any,
will be payable;
o provisions for sinking, purchase or other analogous
fund, if any;
o the date or dates, if any, after which the debt
securities may be redeemed at the option of Cendant or
of the holder and the redemption price or prices;
o the date or the dates, if any, after which the debt
securities may be converted or exchanged at the option
of the holder into or for shares of common stock or
preferred stock of Cendant and the terms for any
conversion or exchange; and
o any other specific terms of the debt securities.
Principal, premium, if any, and interest, if any, will be payable
and the debt securities offered here will be transferable, at the corporate
trust office of the trustee's agent in the borough of Manhattan, City of
New York, provided that payment of interest, if any, may be made at the
option of Cendant by check mailed to the address of the person entitled to
it as it appears in the security register. (Section 301 of each indenture)
If a prospectus supplement specifies that a series of debt
securities is denominated in a currency or currency unit other than United
States dollars, that prospectus supplement shall also specify the
denomination in which the debt securities will be issued and the coin or
currency in which the principal, premium, if any, and interest, if any, on
the debt securities will be payable, which may be United States dollars
based upon the exchange rate for the other currency or currency unit
existing on or about the time a payment is due. Special United States
federal income tax considerations applicable to any debt securities so
denominated are also described in the applicable prospectus supplement.
The debt securities may be issued in registered or bearer form and,
unless otherwise specified in a prospectus supplement, in denominations of
$1,000 and integral multiples. Debt securities may be issued in book-entry
form, without certificates. Any issue will be described in the prospectus
supplement relating to the debt securities. No service charge will be made
for any transfer or exchange of the debt securities, but Cendant or the
trustee may require payment of a sum sufficient to cover any tax or other
government charge payable in connection with it.
Debt securities may be issued under the indentures as original
issue discount securities to be sold at a substantial discount from their
stated principal amount. United States federal income tax consequences and
other applicable considerations applicable will be described in the
applicable prospectus supplement.
MERGER, CONSOLIDATION AND SALE OF ASSETS
The indentures will provide that Cendant shall not consolidate with
or merge into any other corporation or convey, transfer or lease its
properties and assets substantially as an entirety to any person, unless:
(1) the corporation formed by the consolidation or into which
Cendant is merged or the person which acquires by conveyance
or transfer, or which leases the properties and assets of
Cendant substantially as an entirety
(A) shall be a corporation, partnership, limited liability
company or trust organized and validly existing under
the laws of the United States of America, any of its
states or the District of Columbia and
(B) shall expressly assume, by an indenture supplemental to
it, executed and delivered to the trustee, in form
satisfactory to the trustee, Cendant's obligation for
the due and punctual payment of the principal, premium,
if any, and interest on all the debt securities and the
performance and observance of every covenant of the
indentures on the part of Cendant to be performed or
observed;
(2) immediately after giving effect to the transaction, no
default or event of default shall have occurred and be
continuing; and
(3) Cendant or that person shall have delivered to the trustee
an officers' certificate and an opinion of counsel, each
stating that the consolidation, merger, conveyance, transfer
or lease and supplemental indenture comply with this
"Merger, Consolidation and Sale of Assets" section and that
all conditions precedent here provided for relating to the
transaction have been complied with. This paragraph shall
apply only to a merger or consolidation in which Cendant is
not the surviving corporation and to conveyances, leases and
transfers by Cendant as transferor or lessor. (Section 801
of each indenture)
The indentures will further provide that upon any consolidation by
Cendant with or merger by Cendant into any other corporation or any
conveyance, transfer or lease of the properties and assets of Cendant
substantially as an entirety to any person in accordance with the preceding
paragraph, the successor person formed by the consolidation or into which
Cendant is merged or to which the conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and
power of, Cendant under the indentures with the same effect as if the
successor person had been named as Cendant, and in the event of a
conveyance or transfer, Cendant, which term shall for this purpose mean
Cendant Corporation or any successor person which shall become such in the
manner described in the preceding paragraph, except in the case of a lease,
shall be discharged of all obligations and covenants under the indentures
and the debt securities and the coupons and may be dissolved and
liquidated. (Section 802 of each indenture)
EVENTS OF DEFAULT
The following will be "events of default" under the indentures with
respect to debt securities of any series:
(1) default in the payment of any interest on any debt
securities of that series or any related coupon, when the
interest or coupon becomes due and payable, and continuance
of the default for a period of 30 days;
(2) default in the payment of the principal or premium, if any,
on any debt securities of that series at its maturity;
(3) default in the deposit of any sinking fund payment when and
as due under the terms of the debt securities of that series
and the indentures;
(4) default in the performance, or breach, of any covenant or
warranty of Cendant in the indentures, other than a default
in the performance, or breach, of a covenant or warranty
which is specifically dealt with elsewhere under this
"Events of Default" section, and continuance of the default
or breach for a period of 90 days after there has been
given, by registered or certified mail, to Cendant by the
trustee or to Cendant and the trustee by the holders of at
least 25% in principal amount of all outstanding debt
securities, a written notice specifying such default or
breach and requiring it to be remedied and stating that the
notice is a "notice of default thereunder;"
(5) the entry of a decree or order by a court having
jurisdiction in the premises adjudging Cendant bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or
in respect of Cendant under the Federal Bankruptcy Code or
any other applicable federal or state law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator or
other similar official of Cendant or of any substantial part
of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 90 consecutive
days;
(6) the institution by Cendant of proceedings to be adjudicated
bankrupt or insolvent, the consent by it to the institution
of bankruptcy or insolvency proceedings against it, the
filing by it of a petition or answer or consent seeking
reorganization or relief under the Federal Bankruptcy Code
or any other applicable federal or state law, the consent by
it to the filing of any petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator or
other similar official of Cendant or of any substantial part
of its property, the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due;
(7) (A) there shall have occurred one or more defaults by
Cendant in the payment of the principal or premium, if
any, on debt aggregating $50 million or more, when the
same becomes due and payable at its stated maturity,
and the default or defaults shall have continued after
any applicable grace period and shall not have been
cured or waived,
(B) debt of Cendant aggregating $50 million or more shall
have been accelerated or otherwise declared due and
payable, or required to be prepaid or repurchased,
other than by regularly scheduled required prepayment,
prior to its stated maturity; or
(8) any other event of default provided with respect to debt
securities of that series.
If an event of default described in clause (1), (2), (3), (4), (7)
or (8) above with respect to debt securities of any series at the time
outstanding occurs and is continuing, then in every such case the trustee
or the holders of not less than 25% in principal amount of the outstanding
debt securities of that series may declare the principal amount or, if the
debt securities of that series are original issue discount securities or
indexed securities, the portion of the principal amount as may be specified
in the terms of that series of all of the debt securities of that series to
be due and payable immediately. The declaration shall be made by a notice
in writing to Cendant and to the trustee if given by holders, and upon that
declaration the principal amount or specified portion of it, shall become
immediately due and payable. If an event of default described in clause (5)
or (6) above occurs and is continuing, then the principal amount of all the
debt securities shall become and be immediately due and payable without any
declaration or other act on the part of the trustee or any holder, subject,
however, to all rights, powers and limitations provided for by the Federal
Bankruptcy Code or any other applicable federal or state law.
At any time after a declaration of acceleration with respect to
debt securities of any series or of all series, has been made and before a
judgment or decree for payment of the money due has been obtained by the
trustee as provided in article five of the indentures, the holders of a
majority in principal amount of the outstanding debt securities of that
series or of all series, by written notice to Cendant and the trustee, may
rescind and annul the declaration and its consequences if:
(1) Cendant has paid or deposited with the trustee a sum
sufficient to pay in the currency in which the debt
securities of the series are payable, except as otherwise
specified under section 301 of the indentures for the debt
securities of that series and except, if applicable, as
provided in various provisions of section 312 of the
indentures:
(A) all overdue interest on all outstanding debt securities
of that series or of all series and any related coupons;
(B) all unpaid principal of and premium, if any, on any
outstanding debt securities of that series or of all
series which has become due otherwise than by the
declaration of acceleration, and interest on the unpaid
principal at the rate or rates prescribed in the debt
securities;
(C) to the extent that payment of the interest is lawful,
interest on overdue interest at the rate or rates
prescribed in the debt securities; and
(D) all sums paid or advanced by the trustee and the
reasonable compensation, expenses, disbursements and
advances of the trustee, its agents and counsel; and
(2) all events of default with respect to debt securities of
that series or of all series other than the non-payment of
amounts of principal of or premium if any, or interest on
debt securities of that series or of all series, which have
become due solely by the declaration of acceleration, have
been cured or waived as provided in Section 513 of the
indentures.
No rescission shall affect any subsequent default or impair any
consequent right consequent.
Notwithstanding the preceding paragraph, in the event of a
declaration of acceleration in respect of the debt securities because of an
event of default specified in clause (7) of the first paragraph of this
section shall have occurred and be continuing, the declaration of
acceleration shall be automatically annulled if the debt that is the
subject of the event of default has been discharged or the debt holders
have rescinded their declaration of acceleration in respect of that debt,
and written notice of the discharge or rescission shall have been given to
the trustee by Cendant and countersigned by the holders of the debt or a
trustee, fiduciary or agent for the holders, within 30 days after the
declaration of acceleration in respect of the debt securities, and no other
event of default has occurred during the 30-day period which has not been
cured or waived during that period. (Section 502 of each indenture)
Subject to section 502 of each indenture, the holders of not less
than a majority in principal amount of the outstanding debt securities of
any series may on behalf of the holders of all the debt securities of that
series waive any past default described in clause (1), (2), (3), (4), (7),
or (8) of the first paragraph of this section or, in the case of a default
described in clause (5) or (6) of the first paragraph of this section, the
holders of not less than a majority in principal amount of all outstanding
debt securities may waive that past default, and its consequences, except a
default
o in respect of the payment of the principal, premium, if any
or interest on any debt security or any related coupon, or
o in respect of a covenant or provision which under the
indentures cannot be modified or amended without the consent
of the holder of each outstanding debt security of such
series affected. (Section 513 of each indenture)
Upon any such waiver, the default shall cease to exist, and any
event of default arising from it shall be deemed to have been cured, for
every purpose of the indentures. However, no waiver shall extend to any
subsequent or other default or event of default or impair any consequent
right. (Section 513 of each indenture)
No holder of any debt security of any series or any related coupons
shall have any right to institute any proceeding, judicial or otherwise,
with respect to the indentures, or for the appointment of a receiver or
trustee, or for any other remedy, unless
(1) the holder has previously given written notice to the
trustee of a continuing event of default with respect to the
debt securities of that series;
(2) the holders of not less than 25% in principal amount of the
outstanding debt securities of that series in the case of
any event of default under clause (1), (2), (3), (4), (7) or
(8) of the first paragraph of this section, or, in the case
of any event of default described in clause (5) or (6) of
the first paragraph of this section, the holders of not less
than 25% in principal amount of all outstanding debt
securities, shall have made written request to the trustee
to institute proceedings in respect of that event of default
in its own name as trustee under each of the indentures;
(3) the holder or holders have offered to the trustee reasonable
indemnity against the costs, expenses and liabilities to be
incurred in compliance with that request;
(4) the trustee for 60 days after its receipt of the notice,
request and offer of indemnity has failed to institute any
proceeding; and
(5) no direction inconsistent with the written request has been
given to the trustee during the 60-day period by the holders
of a majority or more in principal amount of the outstanding
debt securities of that series in the case of any event of
default described in clause (1), (2), (3), (4), (7) or (8)
of the first paragraph of this section, or, in the case of
any event of default described in clause (5) or (6) of the
first paragraph of this section, by the holders of a
majority or more in principal amount of all outstanding debt
securities. (Section 507 of each indenture)
During the existence of an event of default, the trustee is
required to exercise the rights and powers vested in it under either
indenture in good faith. Subject to the provisions of the indentures
relating to the duties of the trustee, in case an event of default shall
occur and be continuing, the trustee under the indentures is not under any
obligation to exercise any of its rights or powers under the indentures at
the request or direction of any of the holders unless the holders shall
have offered to the trustee reasonable security or indemnity. Subject to
the provisions concerning the rights of the trustee, with respect to the
debt securities of any series, the holders of not less than a majority in
principal amount of the outstanding debt securities of that series shall
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the trustee, or exercising any trust
or power conferred on the trustee under the indentures.
Within 90 days after the occurrence of any default with respect to
debt securities of any series, the trustee shall transmit in the manner and
to the extent provided in the Trust Indenture Act section 313(c), notice of
the default known to the trustee, unless the default shall have been cured
or waived. However, in the case of a default in the payment of the
principal, premium, if any, or interest on any debt securities of that
series, or in the payment of any sinking fund installment with respect to
debt securities of that series, the trustee shall be protected in
withholding the notice if and so long as the board of directors, the
executive committee or a trust committee of directors and/or responsible
officers of the trustee in good faith determines that the withholding of
the notice is in the interest of the holders of debt securities of that
series and any related coupons. Furthermore, in the case of any default of
the character specified in clause (7) of the first paragraph of this
section with respect to debt securities of that series, no notice to
holders shall be given until at least 30 days after its occurrence.
Cendant is required to deliver to the trustee, within 120 days
after the end of each fiscal year, a brief certificate of Cendant's
compliance with all of the conditions and covenants under the indentures.
DEFEASANCE OR COVENANT DEFEASANCE OF THE INDENTURES
The indentures will provide that Cendant may, at its option and at
any time, terminate its obligations with respect to the outstanding debt
securities of any series ("defeasance"). Defeasance means that Cendant
shall be deemed to have paid and discharged the entire indebtedness
represented by the outstanding debt securities and any related coupons,
except for the following which shall survive until otherwise terminated or
discharged under the indentures:
(A) the rights of holders of outstanding debt securities and any
related coupons
(1) to receive, solely from the Cendant trust fund described
in the indentures, payments in respect of the principal,
premium if any and interest on the debt securities and
any related coupons when these payments are due, and
(2) to receive shares of common stock or other securities
from Cendant upon conversion of any convertible debt
securities issued under it,
(B) Cendant's obligations to issue temporary debt securities,
register the transfer or exchange of any debt securities,
replace mutilated, destroyed, lost or stolen debt
securities, maintain an office or agency for payments in
respect of the debt securities and, if Cendant acts as its
own paying agent, hold in trust, money to be paid to the
persons entitled to payment, and with respect to additional
amounts, if any, on such debt securities as contemplated in
the indentures,
(C) the rights, powers, trusts, duties and immunities of the
trustee under the indentures and
(D) the defeasance provisions of the indentures.
With respect to subordinated debt securities, money and securities
held in trust under the defeasance and covenant defeasance provisions
described here, shall not be subject to the subordination provisions of the
subordinated indenture. In addition, Cendant may, at its option and at any
time, elect to terminate its obligations with respect to the covenants that
are provided in the indentures, some of which are described in the "Certain
Covenants" section above, and any omission to comply with these obligations
shall not constitute a default or an event of default with respect to the
debt securities ("covenant defeasance").
(Section 1403 of each indenture)
In order to exercise either defeasance or covenant defeasance:
(1) Cendant shall irrevocably have deposited or caused to be
deposited with the trustee, in trust, for the purpose of
making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the
holders of the debt securities and any related coupons,
(A) money in an amount and in the currency in which the debt
securities and any related coupons are then specified as
payable at stated maturity,
(B) government obligations applicable to the debt
securities, determined on the basis of the currency in
which the debt securities are then specified as payable
at stated maturity, which through the scheduled payment
of principal and interest in accordance with their terms
will provide, not later than one day before the due date
of any payment of principal, including any premium and
interest if any, under the debt securities and any
related coupons, money in an amount or
(C) a combination of (A) and (B), sufficient, in the opinion
of a nationally recognized firm of independent public
accountants to pay and discharge
o the principal, premium if any and interest on the
outstanding debt securities and any related coupons
on the stated maturity or redemption date, if
applicable, of the principal and premium, if any,
installment or interest and
o any mandatory sinking fund payments or analogous
payments applicable to the outstanding debt
securities and any related coupons on the day on
which the payments are due and payable in
accordance with the terms of the indentures and of
the debt securities and any related coupons.
However, the trustee shall have been irrevocably instructed
to apply the money or the proceeds of the government obligations to
said payments with respect to the debt securities and any related
coupons. Before the deposit, Cendant may give to the trustee, in
accordance with the redemption provisions in the indentures, a
notice of its election to redeem all or any portion of the
outstanding debt securities at a future date in accordance with the
terms of the debt securities of that series and the redemption
provisions of the indentures. The notice shall be irrevocable and
if given, shall be given effect in applying the above; and
(2) no default or event of default with respect to the debt
securities and any related coupons shall have occurred and
be continuing on the date of this deposit. Insofar as the
event of default described in clauses (5) and (6) of the
events of default section above are concerned, at any time
during the period ending on the 91st day after the date of
this deposit, it being understood that this condition shall
not be deemed satisfied until the expiration of this period;
(3) a defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, the
indentures or any other material agreement or instrument to
which Cendant is a party or by which it is bound;
(4) in the case of a defeasance, Cendant shall have delivered to
the trustee an opinion of counsel stating that
o Cendant has received from, or there has been published
by, the Internal Revenue Service a ruling or
o since the issue date, there has been a change in the
applicable federal income tax law,
in either case to the effect that, and based on the above
the opinion shall confirm that, the holders of the
outstanding debt securities and any related coupons will not
recognize income, gain or loss for federal income tax
purposes as a result of the defeasance and will be subject
to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if
the defeasance had not occurred;
(5) in the case of a covenant defeasance, Cendant shall have
delivered to the trustee an opinion of counsel to the effect
that the holders of the outstanding debt securities and any
related coupons will not recognize income, gain or loss for
federal income tax purposes as a result of the covenant
defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as
would have been the case if the covenant defeasance had not
occurred;
(6) notwithstanding any other provisions of the defeasance and
covenant defeasance provisions of the indentures, the
defeasance or covenant defeasance shall be effected in
compliance with any additional or substitute terms,
conditions or limitations under Section 301 of the
indentures; and
(7) Cendant shall have delivered to the trustee an officers'
certificate and an opinion of counsel, each stating that all
conditions precedent under the indentures to either
defeasance or covenant defeasance, as the case may be, have
been complied with. (Section 1404 of each indenture)
SATISFACTION AND DISCHARGE
The indentures shall upon Cendant's request cease to be of further
effect with respect to any series of debt securities, except as to any
surviving rights of registration of transfer or exchange of debt securities
of that series expressly provided for in this prospectus and Cendant's
obligation to pay any additional amounts as contemplated by Section 1005 of
each indenture. The trustee, at Cendant's expense, shall execute proper
instruments acknowledging satisfaction and discharge of the indenture as to
that series when
(1) either
(A) all theretofore authenticated and delivered debt
securities of that series and delivered and all
appertaining coupons, if any, other than
(1) coupons appertaining to bearer securities
surrendered for exchange for registered
securities and maturing after the exchange,
whose surrender is not required or has been
waived as provided in Section 305 of the
indentures,
(2) debt securities and coupons of the series
which have been destroyed, lost or stolen and
which have been replaced or paid as provided
in Section 306 of the indentures,
(3) coupons appertaining to debt securities called
for redemption and maturing after the relevant
redemption date, whose surrender has been
waived as provided in Section 1106 of the
indentures, and
(4) debt securities and coupons of the series for
whose payment money has theretofore been
deposited in trust with the trustee or any
paying agent or segregated and held in trust
by Cendant and thereafter repaid to Cendant,
as provided in Section 1003 of the indentures,
have been delivered to the trustee for
cancellation; or
(B) all debt securities of that series and, in the case of
(1) or (2) below, any appertaining coupons appertaining
not theretofore delivered to the trustee for
cancellation
(1) have become due and payable,
(2) will become due and payable at their stated
maturity within one year, or
(3) if redeemable at Cendant's option, are to be
called for redemption within one year under
arrangements satisfactory to the trustee for
the giving of notice of redemption by the
trustee in Cendant's name at its expense, and
Cendant, in the case of (1), (2) or (3) above,
has irrevocably deposited or caused to be
deposited with the trustee as trust funds in
trust for the purpose an amount, in the
currency in which the debt securities of that
series are payable. The amount shall be
sufficient to pay and discharge the entire
indebtedness on the debt securities not
theretofore delivered to the trustee for
cancellation, for principal, premium if any
and interest to the date of the deposit, in
the case of debt securities which have become
due and payable, or to the stated maturity or
redemption date;
(2) Cendant has paid or caused to be paid all other sums payable
by it under this prospectus; and
(3) Cendant has delivered to the trustee an officers'
certificate and an opinion of counsel, each stating that all
conditions precedent provided here for relating to the
satisfaction and discharge of the indentures as to that
series have been complied with. (Section 401 of each
indenture)
AMENDMENTS AND WAIVERS
The indentures will provide that at any time and from time to time,
Cendant and the trustee may, without the consent of any holder of debt
securities, enter into one or more supplemental indentures for specified
purposes, including, among other things,
o to cure ambiguities, defects or inconsistencies, or to make
any other provisions with respect to questions or matters
arising under the indentures, provided that this action
shall not adversely affect the interests of the holders in
any material respect,
o to effect or maintain the qualification of the indentures
under the Trust indenture Act, or
o to evidence the succession of another person to Cendant and
the assumption by any successor of Cendant's obligations in
accordance with the indentures and the debt securities.
(Section 901 of each indenture).
Other amendments and modifications of the indentures or the debt
securities may be made by Cendant and the trustee with the consent of the
holders of not less than a majority of the aggregate principal amount of
all of the then outstanding debt securities of any series. However,
(1) no modification or amendment may, without the consent of the
holder of each affected outstanding debt security do the
following:
o change the stated maturity of the principal or any
installment of interest on any debt security,
o reduce the principal amount, the rate of interest or any
premium payable upon redemption,
o change any of Cendant's obligations to pay additional
amounts contemplated by Section 1005 of each indenture
except as contemplated and permitted by the provisions
of the indentures,
o reduce the amount of the principal of an original issue
discount security that would be due and payable upon a
declaration of acceleration of its maturity under
section 502 of the indentures of the amount provable in
bankruptcy under section 504 of the indentures,
o adversely affect any right of repayment at the option of
any holder of any debt security,
o change any place of payment where any debt security,
premium or the interest is payable,
o change the currency in which any debt security, premium
or the interest is payable,
o impair the right to institute suit for the enforcement
of any payment on the debt security on or after the
stated maturity or, in the case of redemption or
repayment at the option of the holder, on or after the
redemption date or repayment date, or
o adversely affect any right to convert or manage any debt
securities as may be provided under section 301 of the
indentures, or
(2) no modification or amendment may, without the consent of the
holder of each affected outstanding debt security
o reduce the percent in principal amount of the
outstanding debt securities of any series, the consent
of whose holders is required for any supplemental
indenture, for any waiver of compliance with the
provisions of the indentures or defaults under the
indentures and their consequences provided for in the
indentures, or
o reduce the requirements for quorum or voting.
GOVERNING LAW
The indentures and the debt securities will be governed by and
construed in accordance with the laws of the State of New York. The
indentures are subject to the provisions of the Trust indenture Act that
are required to be a part of the indentures and shall, to the extent
applicable, be governed by these provisions.
CERTAIN DEFINITIONS
Provided below is a summary of some of the defined terms used in
the indentures.
"Affiliate" of any specified person means any other person directly
or indirectly controlling or controlled by or under direct or indirect
common control with the specified person. For the purposes of this
definition, "control" when used with respect to any specified person means
the power to direct the management and policies of that person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise. The terms "controlling" and "controlled" have meanings
correlative to the above.
"Capital Stock" means any and all shares, interests,
participations, rights or equivalents, however designated, of Cendant's
corporate stock or any principal subsidiary.
"Company Request" or "Company Order" means a written request or
order signed in the name of Cendant by its chairman, its president, any
vice president, its treasurer or an assistant treasurer, and delivered to
the trustee.
"Debt" means notes, bonds, debt securities or other similar
evidences of indebtedness for money borrowed.
"Default" means any event which is, or after notice or passage of
time or both would be, an event of default.
"Fair Market Value" means the fair market value of the item in
question as determined by the board of directors acting in good faith and
in exercise of its fiduciary duties.
"Holder" means a person in whose name a debt security is registered
in the security register.
"Interest Payment Date" means the stated maturity of an installment
of interest on the debt securities.
"Issue Date" means the date of first issuance of the debt
securities under either indenture.
"Maturity", when used with respect to any debt securities, means
the date on which the principal of that debt security or an installment of
principal becomes due and payable, whether at the stated maturity or by
declaration of acceleration, notice of redemption, notice of option to
elect repayment or otherwise.
"Officers' Certificate" means a certificate signed by the chairman,
the president or a vice president, and by the treasurer, an assistant
treasurer, the secretary or an assistant secretary of Cendant, and
delivered to the trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for Cendant, including an employee of Cendant, and who shall be
acceptable to the trustee.
"Original Issue Discount security" means any debt security which
provides for an amount less than the principal amount to be due and payable
upon a declaration of acceleration of the maturity under Section 502 of the
indentures.
"Outstanding", when used with respect to debt securities, means, as
of the date of determination, all debt securities theretofore authenticated
and delivered under the indentures, except:
o debt securities theretofore cancelled by the trustee or
delivered to the trustee for cancellation;
o debt securities, or portions of the debt securities, for
whose payment, money in the necessary amount has been
theretofore deposited with the trustee or any paying agent
other than Cendant, in trust or set aside and segregated in
trust by Cendant if Cendant shall act as its own paying
agent, for the holders of these debt securities;
o debt securities, except to the extent provided in the
"Defeasance or Covenant Defeasance of the Indentures"
section, with respect to which Cendant has effected
defeasance and/or covenant defeasance as provided in the
indenture; and
o mutilated, destroyed, lost or stolen debt securities which
have become or are about to become due and payable which
have been paid under section 306 of the indentures or in
exchange for or in lieu of which other debt securities have
been authenticated and delivered under the indenture, other
than any debt securities in respect of which there shall
have been presented to the trustee proof satisfactory to it
that these debt securities are held by a bona fide purchaser
in whose hands the debt securities are valid obligations of
Cendant.
However, in determining whether the holders of the requisite
principal amount of outstanding debt securities have given any request,
demand, authorization, direction, notice, consent or waiver under the
indentures, and for the purpose of making the calculations required by the
Trust Indenture Act Section 313, debt securities owned by Cendant, any
other obligor upon the debt securities, any affiliate of Cendant or such
other obligor shall be disregarded and deemed not to be outstanding. Except
that, in determining whether the trustee shall be protected in making this
calculation or in relying upon any request, demand, authorization,
direction, notice, consent or waiver, only debt securities which the
trustee knows to be so owned shall be so disregarded. Debt securities so
owned which have been pledged in good faith may be regarded as outstanding
if the pledgee establishes to the satisfaction of the trustee the pledgee's
right so to act with respect to these debt securities and that the pledgee
is not Cendant, any other obligor upon the debt securities, any affiliate
of Cendant or such other obligor.
"Paying Agent" means any person, including Cendant acting as paying
agent, authorized by Cendant to pay the principal, premium if any, or
interest on any debt securities on behalf of Cendant.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Responsible Officer", when used with respect to the trustee, means:
o the chairman or any vice-chairman of the board of directors,
the chairman or any vice-chairman of the executive committee
of the board of directors, the chairman of the trust
committee, the president, any vice president, the secretary,
any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust
officer or assistant trust officer, the controller or any
assistant controller,
o any other officer of the trustee customarily performing
functions similar to those performed by any of the
above-designated officers, and
o with respect to a particular corporate trust matter, any
other officer to whom that matter is referred because of his
knowledge of and familiarity with the particular subject.
"Rolling Period" shall mean with respect to any fiscal quarter,
such fiscal quarter and the three immediately preceding fiscal quarters
considered as a single accounting period.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305 of the indenture.
"Stated Maturity", when used with respect to any debt security, any
installment of principal or interest, means the date specified in this debt
security as the fixed date on which the principal of this debt security or
the installment of principal or interest is due and payable.
"Subsidiary" means any corporation of which at the time of
determination Cendant, directly and/or indirectly through one or more
subsidiaries, owns more than 50% of the voting stock.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939 as in force at the date as of which the indentures were executed,
except that any supplemental indenture executed under the indentures shall
conform to the requirements of the Trust Indenture Act as in effect on the
date of its execution.
"Trustee" means The Bank of Nova Scotia Trust Company of New York
until a successor trustee shall have become trustee under the applicable
provisions of the indentures. After that "trustee" shall mean that
successor trustee.
"Vice President", when used with respect to Cendant or the trustee,
means any vice president, whether or not designated by a number or a word
or words added before or after the title "vice president".
"Voting Stock" means stock of the class or classes having general
voting power under ordinary circumstances to elect at least a majority of
the board of directors, managers or trustees of a corporation. This is
irrespective of whether or not at the time stock of any other class or
classes shall have or might have voting power by reason of the happening of
any contingency.
DESCRIPTION OF COMMON STOCK
The following description of Cendant 's common stock does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the more complete descriptions provided in Cendant's amended
and restated certificate of incorporation, and amended and restated
by-laws. The certificate of incorporation and by-laws are exhibits to this
registration statement.
The Company is authorized to issue up to 2,000,000,000 shares of
common stock, par value $.01 per share. As of August 6, 1999, there were
approximately 720,331,470 shares of common stock outstanding.
GENERAL
Subject to the rights of the holders of any shares of Cendant's
preferred stock which may at the time be outstanding, holders of common
stock are entitled to the dividends the board of directors may declare out
of its legally available funds. The holders of common stock will possess
exclusive voting rights in Cendant, except to the extent the board of
directors specifies voting power with respect to any preferred stock
issued. Except as hereinafter described, holders of common stock are
entitled to one vote for each share of 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 common
stock are entitled to receive, after payment of all of Cendant 's 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 common stock will not be entitled to preemptive rights with respect to
any shares which may be issued. Any shares of common stock sold under this
prospectus will be fully paid and non-assessable upon issuance against full
payment of their purchase price. The common stock is listed on the New York
Stock Exchange under the symbol "CD."
CERTAIN PROVISIONS
The provisions of Cendant's 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 its 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
The 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 the 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. In additon, under the
by-laws
o an affirmative vote of 80% of the entire board of directors
will be required to change the number of directors, and
o a quorum, at any meeting of the board of directors, shall
consist of a majority of the entire board of directors.
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
under 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 instead 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
The by-laws provide that for business to be properly brought before
an annual meeting by a stockholder, the stockholder must have given timely
notice in writing to Cendant's secretary. 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. However, if there is a 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 the notice of the date of the annual meeting was mailed or such
public disclosure was made. A stockholder's notice to the secretary must
provide as to each matter the stockholder proposes to bring before the
annual meeting:
o a brief description of the business desired to be brought
before the annual meeting,
o the name and address, as they appear on Cendant's books, of
the stockholder proposing that business,
o the class and number of shares of Cendant which are
beneficially owned by the stockholder, and
o any material interest of the stockholder in that 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 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:
o in the case of an annual meeting, at least 90 days prior to
the date of the last annual meeting of Cendant stockholders
and
o with respect to a special meeting of stockholders, the close
of business on the 10th day following the date on which
notice of that meeting is first given to stockholders.
The stockholder's notice to the secretary must contain:
o the name and address of the stockholder who intends to make
the nomination and of the person or persons to be nominated,
o a representation that the stockholder is holder of record of
common stock and intends to appear in person or by proxy at
the meeting to nominate each nominee,
o a description of all arrangements between the stockholder
and each nominee,
o any other information with respect to each nominee as would
be required to be included in a proxy statement filed under
the proxy rules of the commission, and
o the consent of each nominee to serve as director of Cendant
if so elected.
AMENDMENT OF GOVERNING DOCUMENTS
The certificate requires a super-majority of stockholders to
approve amendments to the certificate and the by-laws.
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. 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 various business combination transactions,
including mergers, recapitalization and the issuance or transfer of
securities. This applies to business combination transactions 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
o the business combination is approved by a majority of
disinterested directors, or
o the shareholders receive a "fair price" for their securities
and various 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.
DESCRIPTION OF TRUST PREFERRED SECURITIES OF THE CENDANT TRUSTS
GENERAL
Each Cendant trust may issue, from time to time, only one series of
trust preferred securities having terms described in the prospectus
supplement relating to it. The declaration of each Cendant trust authorizes
the regular trustees of the Cendant trust to issue on behalf of that
Cendant trust one series of trust preferred securities. Each declaration
will be qualified as an indenture under the Trust Indenture Act. The
institutional trustee, an independent trustee, will act as indenture
trustee for the trust preferred securities for purposes of compliance with
the provisions of the Trust Indenture Act. The trust preferred securities
will have terms, including distributions, redemption, voting, liquidation
rights and other preferred, deferred or other special rights or
restrictions as shall be established by the regular trustees in accordance
with the applicable declaration or as shall be provided in the declaration
or made part of the declaration by the Trust Indenture Act. Reference is
made to any prospectus supplement relating to the trust preferred
securities of a Cendant trust for specific terms of the trust preferred
securities, including, to the extent applicable:
o the distinctive designation of the trust preferred
securities,
o the number of trust preferred securities issued by the
Cendant trust,
o the annual distribution rate or method of determining that
rate for trust preferred securities issued by the Cendant
trust and the date or dates upon which the distributions
shall be payable. Provided, however, that distributions on
the trust preferred securities shall, subject to any
deferral provisions, and any provisions for payment of
defaulted distributions, be payable on a quarterly basis to
holders of the trust preferred securities as of a record
date in each quarter during which the trust preferred
securities are outstanding,
o any right of the Cendant trust to defer quarterly
distributions on the trust preferred securities as a result
of an interest deferral right exercised by Cendant on the
subordinated debt securities held by the Cendant trust,
o whether distributions on trust preferred securities shall be
cumulative, and, in the case of trust preferred securities
having cumulative distribution rights, the date or dates or
method of determining the date or dates from which
distributions on trust preferred securities shall be
cumulative,
o the amount or amounts which shall be paid out of the assets
of the Cendant trust to the holders of trust preferred
securities upon voluntary or involuntary dissolution,
winding-up or termination of such Cendant trust,
o the obligation or option, if any, of the Cendant trust to
purchase or redeem trust preferred securities and the price
or prices at which, the period or periods within which and
the terms and conditions upon which trust preferred
securities shall be purchased or redeemed, in whole or in
part, under the obligation or option with the redemption
price to be specified in the applicable prospectus
supplement,
o the voting rights, if any, of trust preferred securities in
addition to those required by law, including the number of
votes per preferred security and any requirement for the
approval by the holders of trust preferred securities as a
condition to specified action or amendments to the
declaration,
o the terms and conditions, if any, upon which subordinated
debt securities held by the Cendant trust may be distributed
to holders of trust preferred securities, and
o any other relevant rights, preferences, privileges,
limitations or restrictions of trust preferred securities
consistent with the declaration or with applicable law.
All trust preferred securities offered here will be guaranteed by
Cendant to the extent provided below under "Description of Trust
Guarantees." The trust guarantee issued to each Cendant trust, when taken
together with Cendant's back-up undertakings, consisting of its obligations
under each declaration including the obligation to pay expenses of each
Cendant trust, the applicable indenture and any applicable supplemental
indentures and the subordinated debt securities issued to any Cendant trust
will provide a full and unconditional guarantee by Cendant of amounts due
on the trust preferred securities issued by each Cendant trust. The payment
terms of the trust preferred securities will be the same as the
subordinated debt securities issued to the applicable Cendant trust by
Cendant .
Each declaration authorizes the regular trustees to issue on behalf
of the applicable trust one series of common securities having terms
including distributions, redemption, voting, liquidation rights or
restrictions as shall be established by the regular trustees in accordance
with the declaration or as shall otherwise be provided in it. The terms of
the common securities issued by each Cendant trust will be substantially
identical to the terms of the trust preferred securities issued by the
Cendant trust, and the common securities will rank equably, and payments
will be made on them proportionately, with the trust preferred securities.
However, if an event of default under the declaration has occurred and is
continuing, the rights of the holders of the common securities to payment
in respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the trust
preferred securities. The common securities will also carry the right to
vote and to appoint, remove or replace any of the Cendant trustees of the
Cendant trust. All of the common securities of each Cendant trust will be
directly or indirectly owned by Cendant.
The financial statements of any Cendant trust that issues trust
preferred securities will be reflected in Cendant's consolidated financial
statements with the trust preferred securities shown as company-obligated
mandatorily-redeemable trust preferred securities of a subsidiary trust
under minority interest in consolidated subsidiaries. In a footnote to
Cendant's audited financial statements there will be included statements
that the applicable Cendant trust is wholly-owned by Cendant and that the
sole asset of such Cendant trust is the subordinated debt securities,
indicating the principal amount, interest rate and the maturity date.
DESCRIPTION OF TRUST GUARANTEES
Provided below is a summary of information concerning the trust
guarantees that will be executed and delivered by Cendant for the benefit
of the holders, from time to time, of trust preferred securities. Each
trust guarantee will be qualified as an indenture under the Trust Indenture
Act. Unless otherwise specified in the applicable prospectus supplement,
Wilmington Trust Company will act as independent indenture trustee for
Trust Indenture Act purposes under each trust guarantee (the "trust
preferred securities guarantee trustee"). The terms of each trust guarantee
will be those provided in the trust guarantee and those made part of the
trust guarantee by the Trust Indenture Act. The following summary does not
purport to be complete and is subject to and qualified in its entirety by
reference to the provisions of the form of trust guarantee and the Trust
Indenture Act. A copy of the form of trust guarantee has been filed as an
exhibit to the registration statement of which this prospectus is a part.
Each trust guarantee will be held by the trust preferred securities
guarantee trustee for the benefit of the holders of the trust preferred
securities of the applicable Cendant trust.
GENERAL
Unless otherwise specified in the applicable prospectus supplement,
under each trust guarantee, Cendant will agree, to the extent provided, to
pay in full to the holders of the trust preferred securities, the guarantee
payments, except to the extent paid by the Cendant trust, as and when due,
regardless of any defense, right of set-off or counterclaim which the
Cendant trust may have or assert. The following payments or distributions
with respect to the trust preferred securities are the guarantee payments,
and to the extent not paid by the Cendant trust, will be subject to the
trust guarantee (without duplication):
(1) any accrued and unpaid distributions that are required to be
paid on the trust preferred securities, to the extent the
Cendant trust shall have the requisite funds available,
(2) the redemption price, including all accrued and unpaid
distributions to the date of redemption, to the extent the
Cendant trust has the requisite funds available, with
respect to any trust preferred securities called for
redemption by the Cendant trust and
(3) upon a voluntary or involuntary dissolution, winding-up or
termination of the Cendant trust, other than in connection
with the distribution of debt securities to the holders of
trust preferred securities or the redemption of all of the
trust preferred securities upon maturity or redemption of
the subordinated debt securities, the lesser of
(a) the aggregate of the liquidation amount and all accrued
and unpaid distributions on the trust preferred
securities to the date of payment, to the extent the
Cendant trust has the requisite funds available or
(b) the amount of assets of the Cendant trust remaining for
distribution to holders of the trust preferred
securities in liquidation of the Cendant trust.
Cendant's obligation to make a guarantee payment may be satisfied
by direct payment of the required amounts by Cendant to the holders of
trust preferred securities or by causing the applicable Cendant trust to
pay these amounts to the holders.
Each trust guarantee will not apply to any payment of distributions
except to the extent the applicable Cendant trust shall have the requisite
funds available. If Cendant does not make interest or principal payments on
the subordinated debt securities purchased by the Cendant trust, the
Cendant trust will not pay distributions on the trust preferred securities
issued by the Cendant trust and will not have the requisite funds
available.
Cendant has also agreed to guarantee the obligations of each
Cendant trust with respect to the common securities (the "common
guarantee") issued by these Cendant trusts to the same extent as the trust
guarantee. However, if an event of default under the subordinated indenture
has occurred and is continuing, holders of trust preferred securities under
the trust guarantee shall have priority over holders of the common
securities under the common guarantee with respect to distributions and
payments on liquidation, redemption or otherwise.
CERTAIN COVENANTS OF CENDANT
Unless otherwise specified in the applicable prospectus supplement,
in each trust guarantee, Cendant will covenant that, so long as any trust
preferred securities issued by the applicable Cendant trust remain
outstanding, if there shall have occurred any event of default under the
trust guarantee or under the declaration of the Cendant trust, then:
(A) Cendant will not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of its
capital stock, other than
(1) purchases or acquisitions of Cendant's capital stock in
connection with the satisfaction by Cendant of its
obligations under any employee or agent benefit plans or
the satisfaction by Cendant of its obligations under any
contract or security outstanding on the date of the
event requiring Cendant to purchase its capital stock,
(2) as a result of a reclassification of Cendant's capital
stock, other than into cash or other property, or the
exchange or conversion of one class or series of
Cendant's capital stock for another class or series of
Cendant's capital stock,
(3) the purchase of fractional interests in shares of
Cendant's capital stock under the conversion or exchange
provisions of that capital stock or the security being
converted or exchanged,
(4) dividends or distributions in Cendant's capital stock,
rights to acquire capital stock or repurchases or
redemptions of capital stock solely from the issuance or
exchange of capital stock or
(5) redemptions or repurchases of any rights outstanding under
a shareholder rights plan;
(b) Cendant shall not make any payment of interest, principal or
premium if any, on or repay, repurchase or redeem any debt
securities issued by Cendant which rank junior to the
subordinated debt securities issued to the applicable
Cendant trust; and
(c) Cendant shall not make any guarantee payments with respect
to the above, other than under a trust guarantee.
MODIFICATION OF THE TRUST GUARANTEES; ASSIGNMENT
Except with respect to any changes that do not adversely affect the
rights of holders of trust preferred securities, in which case no consent
of the holders will be required, each trust guarantee may be amended only
with the prior approval of the holders of not less than a majority in
liquidation amount of the outstanding trust preferred securities of the
Cendant trust. The manner of obtaining the approval of holders of the trust
preferred securities will be provided in accompanying prospectus
supplement. All guarantees and agreements contained in a trust guarantee
shall bind the successors, assigns, receivers, trustees and representatives
of Cendant and shall inure to the benefit of the holders of the trust
preferred securities of the applicable Cendant trust then outstanding.
EVENTS OF DEFAULT
An event of default under a trust guarantee will occur upon
Cendant's failure to perform any of its payment or other obligations under
the trust guarantee. The holders of a majority in liquidation amount of the
trust preferred securities to which the trust guarantee relates have the
right to direct the time, method and place of conducting any proceeding for
any remedy available to the trust preferred securities guarantee trustee in
respect of the trust guarantee or to direct the exercise of any trust or
power conferred upon the trust preferred securities guarantee trustee under
the trust guarantee.
If the trust preferred securities guarantee trustee fails to
enforce the trust guarantee, any record holder of trust preferred
securities to which the trust guarantee relates may institute a legal
proceeding directly against Cendant to enforce the trust preferred
securities guarantee trustee's rights under the trust guarantee without
first instituting a legal proceeding against the applicable Cendant trust,
the trust preferred securities guarantee trustee or any other person or
entity. Notwithstanding the above, if Cendant has failed to make a
guarantee payment under a trust guarantee, a record holder of trust
preferred securities to which that trust guarantee relates may directly
institute a proceeding against Cendant for enforcement of such trust
guarantee for the payment to the record holder of the trust preferred
securities to which that trust guarantee relates of the principal of or
interest on the applicable debt securities on or after the respective due
dates specified in the debt securities, and the amount of the payment will
be based on the holder's proportional share of the amount due and owing on
all of the trust preferred securities to which that trust guarantee
relates. Cendant has waived any right or remedy to require that any action
be brought first against the applicable Cendant trust or any other person
or entity before proceeding directly against Cendant. The record holder in
the case of the issuance of one or more global trust preferred securities
certificates will be The Depository Trust Company acting at the direction
of the beneficial owners of the trust preferred securities.
Cendant will be required to provide annually to the trust preferred
securities guarantee trustee a statement as to the performance by Cendant
of some of its obligations under each outstanding trust guarantee and as to
any default in that performance.
INFORMATION CONCERNING THE TRUST PREFERRED SECURITIES GUARANTEE TRUSTEE
The trust preferred securities guarantee trustee, prior to the
occurrence of a default to a trust guarantee, undertakes to perform only
those duties as are specifically provided in that trust guarantee and,
after default with respect to that trust guarantee, shall exercise the same
degree of care as a prudent individual would exercise in the conduct of his
or her own affairs. Subject to this provision, the trust preferred
securities guarantee trustee is under no obligation to exercise any of the
powers vested in it by a trust guarantee at the request of any holder of
trust preferred securities to which that trust guarantee relates unless it
is offered reasonable indemnity against the costs, expenses and liabilities
that it might incur.
TERMINATION
Each trust guarantee will terminate as to the trust preferred
securities issued by the applicable Cendant trust upon full payment of the
redemption price of all trust preferred securities of that Cendant trust,
upon distribution of the debt securities held by that Cendant trust to the
holders of all of the trust preferred securities of the Cendant trust or
upon full payment of the amounts payable in accordance with the declaration
of the Cendant trust upon liquidation of that Cendant trust. Each trust
guarantee will continue to be effective or will be reinstated, if at any
time any holder of trust preferred securities issued by the applicable
Cendant trust must restore payment of any sums paid under the trust
preferred securities or the trust guarantee.
STATUS OF THE TRUST GUARANTEES
The trust guarantees will constitute senior unsecured obligations
of Cendant and will rank on a parity with all of Cendant's other senior
unsecured obligations.
Each trust guarantee will constitute a guarantee of payment and not
of collection. The guaranteed party may institute a legal proceeding
directly against Cendant to enforce its rights under that trust guarantee
without instituting a legal proceeding against any other person or entity.
GOVERNING LAW
The trust guarantees will be governed by and construed in
accordance with the law of the State of New York.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
Cendant may issue stock purchase contracts, including contracts
obligating holders to purchase from Cendant, and Cendant to sell to the
holders, a specified number of shares of common stock at a future date or
dates. The consideration per share of common stock or preferred stock may
be fixed at the time the stock purchase contracts are issued or may be
determined by reference to a specific formula provided in the stock
purchase contracts. The stock purchase contracts may be issued separately
or as a part of units consisting of a stock purchase contract and debt
securities, trust preferred securities or debt obligations of third
parties, including U.S. treasury securities, securing the holders'
obligations to purchase the common stock under the stock purchase
contracts. The stock purchase contracts may require Cendant to make
periodic payments to the holders of the stock purchase units or vice versa,
and these payments may be unsecured or prefunded on some basis. The stock
purchase contracts may require holders to secure their obligations under
the contracts in a specified manner.
The applicable prospectus supplement will describe the terms of any
stock purchase contracts or stock purchase units. The description in the
prospectus supplement will not necessarily be complete, and reference will
be made to the stock purchase contracts, and, if applicable, collateral
arrangements and depositary arrangements, relating to these stock purchase
contracts or stock purchase units.
PLAN OF DISTRIBUTION
Cendant may sell the securities and the Cendant trusts may sell
trust preferred securities being offered here in any of, or any combination
of, the following ways:
o directly to purchasers;
o through agents;
o through underwriters; and/or
o through dealers.
Offers to purchase securities may be solicited directly by Cendant
and/or a Cendant trust or by agents designated by Cendant and/or a Cendant
trust from time to time. Any agent, who may be deemed to be an underwriter
as that term is defined in the Securities Act, involved in the offer or
sale of securities, will be named, and any commissions payable by Cendant
and/or a Cendant trust to that agent will be provided, in the prospectus
supplement. Unless otherwise indicated in a prospectus supplement, any
agent will be acting on a best efforts basis for the period of its
appointment, which is ordinarily five business days or less.
If an underwriter or underwriters are utilized in the offer or sale
of securities, Cendant and/or the applicable Cendant trust will execute an
underwriting agreement with the underwriters at the time of sale of the
securities to the underwriters and the names of the underwriters and the
principal terms of Cendant's and/or the applicable Cendant trust's
agreement with the underwriters will be provided in the appropriate
prospectus supplement.
If a dealer is utilized in the offer or sale of securities, Cendant
and/or the applicable Cendant trust will sell the securities to the dealer,
as principal. The dealer may then resell the securities to the public at
varying prices to be determined by the dealer at the time of resale. The
name of the dealer and the principal terms of Cendant's and/or the
applicable Cendant trust's agreement with the dealer will be provided in
the appropriate prospectus supplement.
Agents, underwriters, and dealers may be entitled under agreements
with Cendant and/or a Cendant trust to indemnification by Cendant and/or a
Cendant trust against specified liabilities, including liabilities under
the Securities Act. Agents, dealers and underwriters may also be customers
of, engage in transactions with, or perform services for Cendant in the
ordinary course of their business.
Underwriters, agents or their controlling persons may engage in
transactions with and perform services for Cendant in the ordinary course
of business.
The place and time of delivery for securities will be provided in
the accompanying prospectus supplement for these securities.
LEGAL OPINIONS
Certain matters of Delaware law relating to the validity of the
trust preferred securities will be passed upon on behalf of the Cendant
trusts by Skadden, Arps, Slate, Meagher & Flom LPP. The validity of the
securities offered here by Cendant will be passed on for Cendant by Eric J.
Bock, Esq., Vice President--Legal of Cendant. Mr. Bock holds shares of
common stock and options to acquire shares of common stock.
EXPERTS
The consolidated financial statements incorporated in this
prospectus by reference from our annual report on Form 10-K/A for the year
ended December 31, 1998 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, (which expresses an
unqualified opinion and includes explanatory paragraphs relating to the
litigation as described in Note 18, and the change in the method of
recognizing revenue and membership solicitation costs as described in Note
2) which is incorporated herein by reference, and has been so incorporated
in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
The financial statements of PHH Corporation for the year ended
December 31, 1996, are consolidated with those of Cendant. With respect to
the financial statements of PHH Corporation for the year ended December 31,
1996, the Cendant financial statements which are incorporated by reference
in this prospectus, have been incorporated by reference in reliance upon
the report of KPMG LLP, independent auditors, incorporated herein by
reference and upon the authority of such firm as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
Cendant files reports, proxy statements and other information with
the Securities and Exchange Commission. Cendant's filings with the
commission are available to the public over the Internet at the
commission's web site at http:www.sec.gov. You may also read and copy any
document Cendant files at the commission at the public reference rooms of
the commission in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the commission at 1-800-SEC-0330 for further
information on the public reference rooms.
The commission allows Cendant to "incorporate by reference" the
information Cendant files with them, which means that Cendant can disclose
important information to you by referring you to those documents. The
information incorporated by reference is an important part of this
prospectus and information that Cendant files later with the commission
will automatically update and supersede this information. Cendant
incorporates by reference the documents listed below and any future filings
made with the commission under sections 13(a), 13(c), 14 or 15(d) of the
Exchange until we sell all of the securities.
o Annual Report on Form 10-K/A for the year ended December 31,
1998.
o Quarterly Report on Form 10-Q for the quarter ended March
31, 1999.
o Quarterly Report on Form 10-Q for the quarter ended June 30,
1999.
o Current Report on Form 8-K dated April 22, 1999
o Current Report on Form 8-K dated May 25, 1999
o Current Report on Form 8-K dated June 2, 1999
o Current Report on Form 8-K dated June 22, 1999
o Current Report on Form 8-K dated July 9, 1999
o Current Report on Form 8-K dated July 16, 1999
o Current Report on Form 8-K dated July 23, 1999
o The description of our common stock contained in the
registration statements on Form 8-A dated July 27, 1984 and
August 15, 1989
You may request a copy of these filings at no cost, by writing or
telephoning us at the following:
Investor Relations
Cendant Corporation
9 West 57th Street
New York, NY 10019
Telephone: (212) 413-1800
-------------------
You should rely only on the information contained or incorporated
by reference in this prospectus. Neither Cendant nor any underwriter has
authorized anyone to provide you with different information. Neither
Cendant nor any underwriter is making an offer to sell these securities in
any jurisdiction where the offer or sale is not permitted. Cendant should
not assume that the information contained or incorporated by reference in
this prospectus is accurate as of any date other than the date on the front
cover of this prospectus.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission Registration
Fee................................................ $ 247,648
*Trustee's Expenses................................ $ 10,000
*Accounting Fees and Expenses...................... $ 100,000
*Legal Fees and Expenses........................... $ 100,000
*Miscellaneous..................................... $ 200,000
Total Expenses $ 657,648
- ---------------
* Estimated for purposes of completing the information required
pursuant to this Item 14.
The Company will pay all fees and expenses associated with filing
the Registration Statement.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law empowers a
Delaware corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation)
by reason of the fact that such person is or was a director, officer,
employee or agent of such corporation or is or was serving at the request
of such corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise. The
indemnity may include expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
such person in connection with such action, suit or proceeding, provided
that such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interest of the corporation
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe such person's conduct was unlawful. A Delaware corporation
may indemnify directors, officers, employees and other agents of such
corporation in an action by or in the right of a corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the person to be indemnified has been adjudged to be liable to
the corporation. Where a director, officer, employee or agent of the
corporation is successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to above or in defense of any claim,
issue or matter therein, the corporation must indemnify such person against
the expenses (including attorneys' fees) which he or she actually and
reasonably incurred in connection therewith.
The Registrant's By-Laws contain provisions that provide for
indemnification of officers and directors and their heirs and distributees
to full extent permitted by, and in the manner permissible under, the
General Corporation Law of the State of Delaware.
As permitted by Section 102(b)(7) of the General Corporation Law of
the State of Delaware, registrant's Amended and Restated Certificate of
Incorporation contains a provision eliminating the personal liability of a
director to the Registrant or its stockholders for monetary damages for
breach of fiduciary duty as a director, subject to some exceptions.
The Company maintains, at its expense, a policy of insurance which
insures its directors and officers, subject to exclusions and deductions as
are usual in these kinds of insurance policies, against specified
liabilities which may be incurred in those capacities.
Article IV of the Declaration of Trust for the Trust limits the
liability to the Trust and designated other persons and provides for the
indemnification by the Trust or the Company of Trustees, the Officers,
other employees and designated other persons.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
EXHIBIT NO. DESCRIPTION PAGE NO.
1.1 Form of Underwriting Agreement (Standard
Provisions) for Debt Securities.
(Incorporated by reference to Exhibit 1.1 to
the Company's Form S-3 Registration
Statement No. 333-45227)
1.2 Form of Underwriting Agreement (Standard
Provisions) for Common Stock. (Incorporated
by reference to Exhibit 1.2 to the Company's
Form S-3 Registration Statement No.
333-45227)
1.3 Form of Underwriting Agreement (Standard
Provisions) for Preferred Stock.
(Incorporated by reference to Exhibit 1.3 to
the Company's Form S-3 Registration
Statement No. 333-45227)
3.1 Amended and Restated Certificate of
Incorporation of the Registrant
(incorporated by reference to Appendix B to
the Joint Proxy Statement/Prospectus
included as part of the Registration
Statement on Form S-4 of the Registrant,
Registration No. 333-34517).
3.2 Amended and Restated By-Laws of the
Registrant (incorporated by reference to
Appendix C of the Registrant's Proxy
Statement/Prospectus included as part of the
Registration Statement of the Registrant,
Registration No. 333-34517).
4.1 Form of Certificate for the Company's Common
Stock, par value $.01 per share.
(Incorporated by reference to Exhibit 4.1 to
the Company's Form S-3 Registration
Statement No. 333-45227)
4.2 Senior Indenture between the Company and The
Bank of Nova Scotia Trust Company of New
York, as Trustee. (Incorporated by reference
to Exhibit 4.2 to the Company's Form S-3
Registration Statement No. 333-45227)
4.3 Form of Subordinated Indenture to be entered
into by the Company and The Bank of Nova
Scotia Trust Company of New York, as
Trustee. (Incorporated by reference to
Exhibit 4.3 to the Company's Form S-3
Registration Statement No. 333-45227)
4.4 Certificate of Trust of Cendant Capital III.**
4.5 Declaration of Trust of Cendant Capital III.**
4.6 Certificate of Trust of Cendant Capital IV.
4.7 Declaration of Trust of Cendant Capital IV.
4.8 Certificate of Trust of Cendant Capital V.
4.9 Declaration of Trust of Cendant Capital V.
4.10 Form of Amended and Restated Declaration of
Trust of Cendant Capital III, IV and V**
4.11 Form of Trust Preferred Securities Guarantee
Agreement by Cendant Corporation with
respect to Cendant Capital III.**
4.12 Form of Trust Preferred Securities Guarantee
Agreement by Cendant Corporation with
respect to Cendant Capital IV.**
4.13 Form of Trust Preferred Securities Guarantee
Agreement by Cendant Corporation with
respect to Cendant Capital V.**
4.14 Form of Purchase Contract Agreement between
Cendant Corporation and The First National
Bank of Chicago, as Purchase Contract Agent.**
4.15 Form of Pledge Agreement among Cendant
Corporation, The Chase Manhattan Bank, as
Collateral Agent, and The First National
Bank of Chicago, as Purchase Contract Agent.**
4.16 Forms of Senior Debenture (included as part
of Exhibits 4.15, 4.16 and 4.17).**
4.17 Forms of Preferred Security Certificate
(included as part of Exhibits 4.5, 4.7 and
4.9).**
4.18 Form of Income PRIDES certificate (included
as part of Exhibit 4.13).**
4.19 Form of Growth PRIDES certificate (included
as part of Exhibit 4.13).**
5.1 Opinion of Eric J. Bock, Esq. regarding the
legality of the Securities being registered
by the Company hereby.**
5.2 Opinion of Skadden, Arps, Slate, Meagher &
Flom LLP regarding the legality of the
Securities being registered by the Cendant
Trusts hereby.**
12.1 Statement re: Computation of Consolidated
Ratio of Earnings to Fixed Charges.
23.1 Consent of Deloitte & Touche LLP related to
the financial statements of Cendant
Corporation.
23.2 Consent of KPMG LLP related to the financial
statements of PHH Corporation.
24.1 Power of Attorney (included on signature
page).
25.1 Form T-1 Statement of Eligibility under the
Trust Indenture Act of 1939 of The Bank of
Nova Scotia Trust Company of New York, as
Trustee for the Debentures.**
25.2 Form T-1 Statement of Eligibility under the
Trust Indenture Act of 1939 of Wilmington
Trust Company, as Trustee under the
Declaration of Trust of Cendant Capital III,
the Declaration of Trust of Cendant Capital
IV and the Declaration of Trust of Cendant
Capital V.**
25.3 Form T-1 Statement of Eligibility under the
Trust Indenture Act of 1939 of Wilmington
Trust Company, as Trustee under the Trust
Preferred Securities Guarantee of Cendant
Capital III, the Trust Preferred Securities
Guarantee of Cendant Capital IV and the
Trust Preferred Securities Guarantee of
Cendant Capital V.**
99.1 Form of Rights Agreement among Cendant
Corporation and The First National Bank
of Chicago.**
* Previously filed.
** To be filed by amendment.
ITEM 17. UNDERTAKINGS.
Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effect amendment to this registration statement:
(i) To include any prospectus required by Section
10(a) (3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment will
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time will be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
Each of the undersigned registrants hereby undertakes that,
for purposes of determining any liability under the Securities Act
of 1933, each filing of such registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement will be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time will be deemed to be the initial bona
fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Cendant
Corporation certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement, to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on
September 2, 1999.
CENDANT CORPORATION
By: /s/ James E. Buckman
________________________
James E. Buckman
Vice Chairman
General Counsel and
Director
POWER OF ATTORNEY
KNOWN BY ALL PERSONS BY THESE PRESENTS that each person whose
signature appears below, constitutes and appoints Eric Bock, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for such person and in his name, place and stead, in any
and all capacities, in connection with the registrant's registration
statement, in the name and on behalf of the registrant or on behalf of the
undersigned as a director or officer of the registrant, on Form S-3 under
the Securities Act of 1933, as amended, including, without limiting the
generality of the foregoing, to sign the Registration Statement and any and
all amendments (including post-effective amendments) to the Registration
Statement, and any subsequent registration statement filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same,
with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in
person, thereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Henry R. Silverman
_____________________________ Chairman of the Board, September 2,
(Henry R. Silverman) President, Chief 1999
Executive Officer
and Director
/s/ James E. Buckman
______________________________ Vice Chairman, September 2,
(James E. Buckman) General Counsel and 1999
Director
/s/ Stephen P. Holmes
______________________________ Vice Chairman and September 2,
(Stephen P. Holmes) Director 1999
/s/ Michael P. Monaco
______________________________ Vice Chairman and September 2,
(Michael P. Monaco) Director 1999
/s/ David M. Johnson
______________________________ Senior Executive Vice September 2,
(David M. Johnson) President and 1999
Chief Financial Officer
(Principal Financial
Officer)
/s/ Jon F. Danski
_____________________________ Executive Vice President September 2,
(Jon F. Danski) and Chief Accounting 1999
Officer (Principal
Accounting Officer)
/s/ John D. Snodgrass
_____________________________ Director September 2,
(John D. Snodgrass) 1999
/s/ Robert D. Kunisch
_____________________________ Director September 2,
(Robert D. Kunisch) 1999
/s/ Leonard S. Coleman
______________________________ Director September 2,
(Leonard S. Coleman) 1999
/s/ Martin L. Edelman
______________________________ Director September 2,
(Martin L. Edelman) 1999
/s/ Dr. Carole G. Hankin
______________________________ Director September 2,
(Dr. Carole G. Hankin) 1999
/s/ The Rt. Hon. Brian Mulroney
P.C., LL.D.
_______________________________ Director September 2,
(The Rt. Hon. Brian Mulroney, 1999
P.C., LL.D.)
/s/ Robert W. Pittman
_______________________________ Director September 2,
(Robert W. Pittman) 1999
/s/ Leonard Schutzman
______________________________ Director September 2,
(Leonard Schutzman) 1999
/s/ Robert F. Smith
______________________________ Director September 2,
(Robert F. Smith) 1999
/s/ Robert E. Nederlander
______________________________ Director September 2,
(Robert E. Nederlander) 1999
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Cendant
Capital III, Cendant Capital IV and Cendant Capital V certify that it has
reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and that it has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of New York, State of New York on September 2 , 1999.
CENDANT CAPITAL III
By: /s/ Michael P. Monaco
_________________________
Michael P. Monaco,
Trustee
By: /s/ James E. Buckman
_________________________
James E. Buckman,
Trustee
CENDANT CAPITAL IV
By: /s/ Michael P. Monaco
________________________
Michael P. Monaco,
Trustee
By: /s/ James E. Buckman
________________________
James E. Buckman,
Trustee
CENDANT CAPITAL V
By: /s/ Michael P. Monaco
_________________________
Michael P. Monaco,
Trustee
By: /s/ James E. Buckman
_________________________
James E. Buckman,
Trustee
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO.
1.1 Form of Underwriting Agreement (Standard
Provisions) for Debt Securities.
(Incorporated by reference to Exhibit 1.1 to
the Company's Form S-3 Registration
Statement No. 333-45227)
1.2 Form of Underwriting Agreement (Standard
Provisions) for Common Stock. (Incorporated
by reference to Exhibit 1.2 to the Company's
Form S-3 Registration Statement No.
333-45227)
1.3 Form of Underwriting Agreement (Standard
Provisions) for Preferred Stock.
(Incorporated by reference to Exhibit 1.3 to
the Company's Form S-3 Registration
Statement No. 333-45227)
3.1 Amended and Restated Certificate of
Incorporation of the Registrant
(incorporated by reference to Appendix B to
the Joint Proxy Statement/Prospectus
included as part of the Registration
Statement on Form S-4 of the Registrant,
Registration No. 333-34517).
3.2 Amended and Restated By-Laws of the
Registrant (incorporated by reference to
Appendix C of the Registrant's Proxy
Statement/Prospectus included as part of the
Registration Statement of the Registrant,
Registration No. 333-34517).
4.1 Form of Certificate for the Company's Common
Stock, par value $.01 per share.
(Incorporated by reference to Exhibit 4.1 to
the Company's Form S-3 Registration
Statement No. 333-45227)
4.2 Senior Indenture between the Company and The
Bank of Nova Scotia Trust Company of New
York, as Trustee. (Incorporated by reference
to Exhibit 4.2 to the Company's Form S-3
Registration Statement No. 333-45227)
4.3 Form of Subordinated Indenture to be entered
into by the Company and The Bank of Nova
Scotia Trust Company of New York, as
Trustee. (Incorporated by reference to
Exhibit 4.3 to the Company's Form S-3
Registration Statement No. 333-45227)
4.4 Certificate of Trust of Cendant Capital III.**
4.5 Declaration of Trust of Cendant Capital III.**
4.6 Certificate of Trust of Cendant Capital IV.
4.7 Declaration of Trust of Cendant Capital IV.
4.8 Certificate of Trust of Cendant Capital V.
4.9 Declaration of Trust of Cendant Capital V.
4.10 Form of Amended and Restated Declaration of
Trust of Cendant Capital III, IV and V**
4.11 Form of Trust Preferred Securities Guarantee
Agreement by Cendant Corporation with
respect to Cendant Capital III.**
4.12 Form of Trust Preferred Securities Guarantee
Agreement by Cendant Corporation with
respect to Cendant Capital IV.**
4.13 Form of Trust Preferred Securities Guarantee
Agreement by Cendant Corporation with
respect to Cendant Capital V.**
4.14 Form of Purchase Contract Agreement between
Cendant Corporation and The First National
Bank of Chicago, as Purchase Contract Agent.**
4.15 Form of Pledge Agreement among Cendant
Corporation, The Chase Manhattan Bank, as
Collateral Agent, and The First National
Bank of Chicago, as Purchase Contract Agent.**
4.16 Forms of Senior Debenture (included as part
of Exhibits 4.15, 4.16 and 4.17).**
4.17 Forms of Preferred Security Certificate
(included as part of Exhibits 4.5, 4.7 and
4.9).**
4.18 Form of Income PRIDES certificate (included
as part of Exhibit 4.13).**
4.19 Form of Growth PRIDES certificate (included
as part of Exhibit 4.13).**
5.1 Opinion of Eric J. Bock, Esq. regarding the
legality of the Securities being registered
by the Company hereby.**
5.2 Opinion of Skadden, Arps, Slate, Meagher &
Flom LLP regarding the legality of the
Securities being registered by the Cendant
Trusts hereby.**
12.1 Statement re: Computation of Consolidated
Ratio of Earnings to Fixed Charges.
23.1 Consent of Deloitte & Touche LLP related to
the financial statements of Cendant
Corporation.
23.2 Consent of KPMG LLP related to the financial
statements of PHH Corporation.
24.1 Power of Attorney (included on signature
page).
25.1 Form T-1 Statement of Eligibility under the
Trust Indenture Act of 1939 of The Bank of
Nova Scotia Trust Company of New York, as
Trustee for the Debentures.**
25.2 Form T-1 Statement of Eligibility under the
Trust Indenture Act of 1939 of Wilmington
Trust Company, as Trustee under the
Declaration of Trust of Cendant Capital III,
the Declaration of Trust of Cendant Capital
IV and the Declaration of Trust of Cendant
Capital V.**
25.3 Form T-1 Statement of Eligibility under the
Trust Indenture Act of 1939 of Wilmington
Trust Company, as Trustee under the Trust
Preferred Securities Guarantee of Cendant
Capital III, the Trust Preferred Securities
Guarantee of Cendant Capital IV and the
Trust Preferred Securities Guarantee of
Cendant Capital V.**
99.1 Form of Rights Agreement among Cendant
Corporation and The First National Bank
of Chicago.**
* Previously filed.
** To be filed by amendment.
CERTIFICATE OF TRUST
The undersigned, the trustees of Cendant Capital IV, desiring to form
a business trust pursuant to Delaware Business Trust Act, 12 Del. C.
section 3810, hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust")
is "Cendant Capital IV."
2. The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is
as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
IN WITNESS WHEREOF, the undersigned have executed this
Certificate of Trust as of the date written below.
/s/ Michael P. Monaco
- ---------------------------- WILMINGTON TRUST COMPANY
Name: Michael P. Monaco Not in its individual capacity,
Title: Trustee but solely as Trustee.
/s/ James E. Buckman By: /s/ Joseph B. Feil
--------------------------- -------------------------------
Name: James E. Buckman Name: Joseph B. Feil
Title: Trustee Title:
Dated: August 20, 1999
================================
DECLARATION OF TRUST
Dated as of August 20, 1999
================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 Office . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 Purpose . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4 Authority . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5 Title to Property of the Trust . . . . . . . . . . 4
SECTION 2.6 Powers of the Trustees . . . . . . . . . . . . . . 4
SECTION 2.7 Filing of Certificate of Trust . . . . . . . . . . 6
SECTION 2.8 Duration of Trust. . . . . . . . . . . . . . . . . 6
SECTION 2.9 Responsibilities of the Sponsor . . . . . . . . . 6
Section 2.10 Declaration Binding on Securities Holders . . . . 7
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3 Delaware Trustee . . . . . . . . . . . . . . . . . 8
SECTION 3.4 Institutional Trustee.
Section 3.5 Not Responsible for Recitals or Sufficiency of
Declaration. . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation . . . . . . . . . . . . . . . . . . . 9
SECTION 4.2 Fiduciary Duty . . . . . . . . . . . . . . . . . . 9
SECTION 4.3 Indemnification . . . . . . . . . . . . . . . . . 10
SECTION 4.4 Outside Businesses . . . . . . . . . . . . . . . . 13
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.2 Termination of Trust . . . . . . . . . . . . . . . 14
SECTION 5.3 Governing Law . . . . . . . . . . . . . . . . . . 15
SECTION 5.4 Headings . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.5 Successors and Assigns . . . . . . . . . . . . . . 16
SECTION 5.6 Partial Enforceability . . . . . . . . . . . . . . 16
SECTION 5.7 Counterparts . . . . . . . . . . . . . . . . . . . 16
DECLARATION OF TRUST
OF
Cendant Capital IV
DECLARATION OF TRUST ("Declaration") dated August 20, 1999 and
effective as of August 31, 1999 by the undersigned Trustees (together with
all other persons from time to time duly appointed and serving as trustees
in accordance with the provisions of this Declaration, the "Trustees"),
Cendant Corporation, a Delaware corporation, as trust sponsor (the
"Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust
(the "Trust") pursuant to the Delaware Business Trust Act for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer (as hereinafter
defined); and
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will
be held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and Sections are
to Articles and Sections of this Declaration unless otherwise
specified; and
(e) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York or Wilmington, Delaware are authorized
or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code section3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security denominated as such and
representing an undivided beneficial interest in the assets of the Trust
with such terms as may be set out in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Regular Trustee; (b)
any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of
any Regular Trustee; or (d) any employee or agent of the Trust or its
Affiliates.
"Covered Person" means (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii)
the Trust's Affiliates and (b) any holder of Securities.
"Debenture Issuer" means Cendant Corporation in its capacity as
the issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer and acquired by the Trust.
"Debenture Trustee" means The Bank of Nova Scotia Trust Company
of New York, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).
"Holder" means the person in whose name a certificate
representing a Security is registered.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the indenture dated as of _________ , among
Debenture Issuer and the Debenture Trustee and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Preferred Security" means a security denominated as such and
representing an undivided beneficial interest in the assets of the Trust
with such terms as may be set out in any amendment to this Declaration.
"Regular Trustee" has the meaning set forth in Section 3.1.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means Cendant Corporation in its capacity as sponsor of
the Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office
in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein to a Trustee
or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Cendant Capital
IV." The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o Cendant
Corporation, 6 Sylvan Way, Parsippany, New Jersey 07054. At any time, the
Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire
the Debentures, and (b) except as otherwise limited herein, to engage in
only those other activities necessary, or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to
be undertaken) any activity that would cause the Trust not to be classified
for United States federal income tax purposes as a grantor trust.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Regular Trustees in
accordance with their powers shall constitute the act of and serve to bind
the Trust. In dealing with the Regular Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the
Regular Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Regular
Trustees as set forth in this Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Trust.
SECTION 2.6 Powers of the Trustees.
The Regular Trustees shall have the exclusive power and authority
to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however,
that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and,
provided further, that there shall be no interests in the Trust other
than the Securities and the issuance of the Securities shall be
limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto in relation to the Preferred Securities;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary in order to qualify or register all or part of the
Preferred Securities in any State in which the Sponsor has
determined to qualify or register such Preferred Securities for
sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared
by the Sponsor relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into an underwriting agreement and
pricing agreement providing for the sale of the Preferred
Securities;
(c) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors,
advisors, and consultants and provide for reasonable compensation for
such services;
(d) to incur expenses which are necessary or incidental to carry
out any of the purposes of this Declaration; and
(e) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust
in the form attached hereto as Exhibit A with the Secretary of State of the
State of Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.
SECTION 2.9 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility
to engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action
to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be
executed and filed by the Trust, as the Sponsor deems necessary or
advisable in order to comply with the applicable laws of any such
States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
class of Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of an underwriting agreement and
pricing agreement providing for the sale of the Preferred Securities.
Section 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a Holder of a Security or
any interest therein in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be three (3), and
thereafter the number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by the Sponsor. The
Sponsor is entitled to appoint or remove without cause any Trustee at any
time; provided, however, that the number of Trustees shall in no event be
less than two (2); provided further that one Trustee, in the case of a
natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its
principal place of business in the State of Delaware (the "Delaware
Trustee"); provided further that there shall be at least one trustee who is
an employee or officer of, or is affiliated with the Sponsor (each, a
"Regular Trustee").
SECTION 3.2 Regular Trustees.
The initial Regular Trustees shall be:
Michael P. Monaco
James E. Buckman
(a) Except as expressly set forth in this Declaration, any power
of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 2.6 provided, that, the registration statement referred
to in Section 2.6(b)(i), including any amendments thereto, shall be signed
by a majority of the Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Regular
Trustees have power and authority to cause the Trust to execute pursuant to
Section 2.6.
SECTION 3.3 Delaware Trustee.
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North,
1100 North Market Street,
Wilmington, Delaware 19890
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees described in this Declaration. The Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of section 3807 of the Business Trust Act. Notwithstanding
anything herein to the contrary, the Delaware Trustee shall not be liable
for the acts or omissions to act of the Trust, of the Sponsor or of the
Regular Trustees except that such limitation shall not limit the liability,
if any, of the Delaware Trustee to a holder for acts that the Delaware
Trustee is expressly obligated or authorized to undertake under this
Declaration or the Business Trust Act or for the gross negligence or
willful misconduct of the Delaware Trustee. The Delaware Trustee may, at
any time resign as Trustee hereunder upon 30 days' prior written notice of
such resignation to the Sponsor. Upon its receipt of such notice of
resignation, the Sponsor promptly shall appoint a successor Delaware
Trustee (each, a "Successor Trustee") and such resignation shall take
effect when the Successor Trustee accepts in writing the Successor
Trustee's appointment as successor Delaware Trustee. If within such 30-day
period, the Sponsor has failed to take appropriate steps to appoint a
successor Trustee, the Delaware Trustee may, but shall not be required to,
petition any court of competent jurisdiction for the appointment of a
Successor Trustee. Such court may thereupon appoint a Successor Trustee
after such notice to the Sponsor as such court may deem proper and
prescribe. The resignation of the Delaware Trustee shall not be deemed to
constitute bad faith for the purposes of Section 4.2 (b) hereof.
SECTION 3.4 Institutional Trustee.
Prior to the issuance of the Preferred Securities and Common
Securities, the Sponsor shall appoint a trustee (the "Institutional
Trustee") meeting the requirements of an eligible trustee of the Trust
Indenture Act of 1939, as amended, by the execution of an amendment to this
Declaration executed by the Regular Trustees, the Sponsor, the
Institutional Trustee and the Delaware Trustee.
Section 3.5 Not Responsible for Recitals or Sufficiency of Declaration.
The recitals contained in this Declaration shall be taken as the
statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part
thereof. The Trustees make no representations as to the validity or
sufficiency of this Declaration.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by
this Declaration or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's gross negligence or willful misconduct with respect to
such acts or omissions; and
(b) an Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who if selected by such
Indemnified Person has been selected with reasonable care, including
information, opinions, reports or statements as to the value and amount of
the assets, liabilities, profits, losses, or any other facts pertinent to
the existence and amount of assets from which distributions to holders of
Securities might properly be paid.
SECTION 4.2 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified Person
acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity, are agreed by the parties hereto to replace
such other duties and liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between an Indemnified Person and any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that are,
fair and reasonable to the Trust or any holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices, and any
applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall not
constitute a breach of this Declaration or any other agreement contemplated
herein or of any duty or obligation of the Indemnified Person at law or in
equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider
such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Trust
or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 4.3 Indemnification.
(a)(i) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or
in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 4.3(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 4.3(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 4.3(a) shall be paid by the Debenture Issuer
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Debenture
Issuer as authorized in this Section 4.3(a). Notwithstanding the
foregoing, no advance shall be made by the Debenture Issuer if a
determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular
Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs,
by independent legal counsel in a written opinion or (iii) the Common
Security Holder of the Trust, that, based upon the facts known to the
Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in
bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the Trust, or, with respect to
any criminal proceeding, that such Company Indemnified Person believed
or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Regular
Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty
to the Trust or its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 4.3(a)
shall not be deemed exclusive of any other rights to which those
seeking indemnification and advancement of expenses may be entitled
under any agreement, vote of stockholders or disinterested directors
of the Debenture Issuer or Preferred Security Holders of the Trust or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office. All rights to
indemnification under this Section 4.3(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this
Section 4.3(a) is in effect. Any repeal or modification of this
Section 4.3(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 4.3(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 4.3(a) shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a Company Indemnified Person and shall inure to the
benefit of the heirs, executors and administrators of such a person.
(b)(i) The Debenture Issuer agrees to indemnify the (1) the
Delaware Trustee, (2) any Affiliate, to the full extent permitted by law,
of the Delaware Trustee, and (3) any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or
agents of the Delaware Trustee (each of the Persons in (1) through (3)
being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without gross negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust
or trusts hereunder, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against, or investigating, any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. (ii) To the fullest extent permitted by
applicable law, expenses (including reasonable and documented legal fees)
incurred by a Fiduciary Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Debenture Issuer prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Debenture Issuer of an
undertaking by or on behalf of the Fiduciary Indemnified Person to repay
such amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified as authorized in Section 4.3 (b) (i). (iii) The
obligation to indemnify and advance expenses as set forth in this Section
4.3(b) shall survive the termination of this Declaration and shall survive
the resignation or removal of the Delaware Trustee.
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware Trustee may
engage in or possess an interest in other business ventures of any nature
or description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent
ventures or the income or profits derived therefrom and the pursuit of any
such venture, even if competitive with the business of the Trust, shall not
be deemed wrongful or improper. No Covered Person, the Sponsor or the
Delaware Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character
that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor and the Delaware Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment or other opportunity.
Any Covered Person and the Delaware Trustee may engage or be interested in
any financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for or may act on
any committee or body of holders of, securities or other obligations of the
Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this Declaration
may be amended by, and only by, a written instrument executed by all of the
Regular Trustees and the Sponsor; provided, however, if the amendment
affects the rights, powers, duties, obligations or immunities of the
Delaware Trustee, the amendment shall not be effective unless approved in
writing by the Delaware Trustee.
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force or
effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Sponsor or the revocation of
the Sponsor's charter or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution
of the Sponsor, or the Trust; and
(iv) before the issue of any Securities, with the consent
of all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable upon completion of winding up by
the Trustees after the occurrence of an event referred to in Section
5.2(a), the Trustees shall file a certificate of cancellation with the
Secretary of State of the State of Delaware.
SECTION 5.3 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 5.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to
be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 5.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to
persons or circumstances other than those to which it is held invalid,
shall not be affected thereby.
SECTION 5.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature
pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused this Declaration
of Trust of Cendant Capital IV to be executed as of the day and year first
above written.
/s/ Michael P. Monaco
-------------------------------------
Name: Michael P. Monaco
Title: Regular Trustee
/s/ James E. Buckman
-------------------------------------
Name: James E. Buckman
Title: Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ Joseph B. Feil
----------------------------------
Name: Joseph B. Feil
Title:
CENDANT CORPORATION, as Sponsor and
Debenture Issuer
By: /s/ Michael P. Monaco
---------------------------------
Name: Michael P. Monaco
Title: Vice Chairman and
Chief Executive Officer
CERTIFICATE OF TRUST
The undersigned, the trustees of Cendant Capital V, desiring to form a
business trust pursuant to Delaware Business Trust Act, 12 Del. C.
section 3810, hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust")
is "Cendant Capital V."
2. The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is
as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
IN WITNESS WHEREOF, the undersigned have executed this
Certificate of Trust as of the date written below.
/s/ Michael P. Monaco
---------------------------- WILMINGTON TRUST COMPANY
Name: Michael P. Monaco Not in its individual capacity,
Title: Trustee but solely as Trustee.
/s/ James E. Buckman By: /s/ Joseph B. Feil
---------------------------- ------------------------------
Name: James E. Buckman Name: Joseph B. Feil
Title: Trustee Title:
Dated: August 20, 1999
================================
DECLARATION OF TRUST
Dated as of August 20, 1999
================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
ORGANIZATION
SECTION 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 Office . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 Purpose . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4 Authority . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5 Title to Property of the Trust . . . . . . . . . . 4
SECTION 2.6 Powers of the Trustees . . . . . . . . . . . . . . 4
SECTION 2.7 Filing of Certificate of Trust . . . . . . . . . . 6
SECTION 2.8 Duration of Trust. . . . . . . . . . . . . . . . . 6
SECTION 2.9 Responsibilities of the Sponsor . . . . . . . . . 6
Section 2.10 Declaration Binding on Securities Holders . . . . 7
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3 Delaware Trustee . . . . . . . . . . . . . . . . . 8
SECTION 3.4 Institutional Trustee.
Section 3.5 Not Responsible for Recitals or Sufficiency of
Declaration. . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation . . . . . . . . . . . . . . . . . . . 9
SECTION 4.2 Fiduciary Duty . . . . . . . . . . . . . . . . . . 9
SECTION 4.3 Indemnification . . . . . . . . . . . . . . . . . 10
SECTION 4.4 Outside Businesses . . . . . . . . . . . . . . . . 13
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.2 Termination of Trust . . . . . . . . . . . . . . . 14
SECTION 5.3 Governing Law . . . . . . . . . . . . . . . . . . 15
SECTION 5.4 Headings . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.5 Successors and Assigns . . . . . . . . . . . . . . 16
SECTION 5.6 Partial Enforceability . . . . . . . . . . . . . . 16
SECTION 5.7 Counterparts . . . . . . . . . . . . . . . . . . . 16
DECLARATION OF TRUST
OF
Cendant Capital V
DECLARATION OF TRUST ("Declaration") dated August 20, 1999 and
effective as of August 31, 1999 by the undersigned Trustees (together with
all other persons from time to time duly appointed and serving as trustees
in accordance with the provisions of this Declaration, the "Trustees"),
Cendant Corporation, a Delaware corporation, as trust sponsor (the
"Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust
(the "Trust") pursuant to the Delaware Business Trust Act for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer (as hereinafter
defined); and
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will
be held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and Sections are
to Articles and Sections of this Declaration unless otherwise
specified; and
(e) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York or Wilmington, Delaware are authorized
or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code section3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security denominated as such and
representing an undivided beneficial interest in the assets of the Trust
with such terms as may be set out in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Regular Trustee; (b)
any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of
any Regular Trustee; or (d) any employee or agent of the Trust or its
Affiliates.
"Covered Person" means (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii)
the Trust's Affiliates and (b) any holder of Securities.
"Debenture Issuer" means Cendant Corporation in its capacity as
the issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer and acquired by the Trust.
"Debenture Trustee" means The Bank of Nova Scotia Trust Company
of New York, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 4.3(b).
"Holder" means the person in whose name a certificate
representing a Security is registered.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the indenture dated as of _________ , among
Debenture Issuer and the Debenture Trustee and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Preferred Security" means a security denominated as such and
representing an undivided beneficial interest in the assets of the Trust
with such terms as may be set out in any amendment to this Declaration.
"Regular Trustee" has the meaning set forth in Section 3.1.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means Cendant Corporation in its capacity as sponsor of
the Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office
in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein to a Trustee
or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name.
The Trust created by this Declaration is named "Cendant Capital
V." The Trust's activities may be conducted under the name of the Trust or
any other name deemed advisable by the Regular Trustees.
SECTION 2.2 Office.
The address of the principal office of the Trust is c/o Cendant
Corporation, 6 Sylvan Way, Parsippany, New Jersey 07054. At any time, the
Regular Trustees may designate another principal office.
SECTION 2.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire
the Debentures, and (b) except as otherwise limited herein, to engage in
only those other activities necessary, or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to
be undertaken) any activity that would cause the Trust not to be classified
for United States federal income tax purposes as a grantor trust.
SECTION 2.4 Authority.
Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Regular Trustees in
accordance with their powers shall constitute the act of and serve to bind
the Trust. In dealing with the Regular Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the
Regular Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Regular
Trustees as set forth in this Declaration.
SECTION 2.5 Title to Property of the Trust.
Legal title to all assets of the Trust shall be vested in the
Trust.
SECTION 2.6 Powers of the Trustees.
The Regular Trustees shall have the exclusive power and authority
to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however,
that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and,
provided further, that there shall be no interests in the Trust other
than the Securities and the issuance of the Securities shall be
limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto in relation to the Preferred Securities;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary in order to qualify or register all or part of the
Preferred Securities in any State in which the Sponsor has
determined to qualify or register such Preferred Securities for
sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared
by the Sponsor relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into an underwriting agreement and
pricing agreement providing for the sale of the Preferred
Securities;
(c) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors,
advisors, and consultants and provide for reasonable compensation for
such services;
(d) to incur expenses which are necessary or incidental to carry
out any of the purposes of this Declaration; and
(e) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing.
SECTION 2.7 Filing of Certificate of Trust.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust
in the form attached hereto as Exhibit A with the Secretary of State of the
State of Delaware.
SECTION 2.8 Duration of Trust.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for fifty-five (55) years from the date
hereof.
SECTION 2.9 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility
to engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action
to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be
executed and filed by the Trust, as the Sponsor deems necessary or
advisable in order to comply with the applicable laws of any such
States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
class of Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of an underwriting agreement and
pricing agreement providing for the sale of the Preferred Securities.
Section 2.10 Declaration Binding on Securities Holders.
Every Person by virtue of having become a Holder of a Security or
any interest therein in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
ARTICLE III
TRUSTEES
SECTION 3.1 Trustees.
The number of Trustees initially shall be three (3), and
thereafter the number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by the Sponsor. The
Sponsor is entitled to appoint or remove without cause any Trustee at any
time; provided, however, that the number of Trustees shall in no event be
less than two (2); provided further that one Trustee, in the case of a
natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its
principal place of business in the State of Delaware (the "Delaware
Trustee"); provided further that there shall be at least one trustee who is
an employee or officer of, or is affiliated with the Sponsor (each, a
"Regular Trustee").
SECTION 3.2 Regular Trustees.
The initial Regular Trustees shall be:
Michael P. Monaco
James E. Buckman
(a) Except as expressly set forth in this Declaration, any power
of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 2.6 provided, that, the registration statement referred
to in Section 2.6(b)(i), including any amendments thereto, shall be signed
by a majority of the Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Regular
Trustees have power and authority to cause the Trust to execute pursuant to
Section 2.6.
SECTION 3.3 Delaware Trustee.
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North,
1100 North Market Street,
Wilmington, Delaware 19890
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees described in this Declaration. The Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of section 3807 of the Business Trust Act. Notwithstanding
anything herein to the contrary, the Delaware Trustee shall not be liable
for the acts or omissions to act of the Trust, of the Sponsor or of the
Regular Trustees except that such limitation shall not limit the liability,
if any, of the Delaware Trustee to a holder for acts that the Delaware
Trustee is expressly obligated or authorized to undertake under this
Declaration or the Business Trust Act or for the gross negligence or
willful misconduct of the Delaware Trustee. The Delaware Trustee may, at
any time resign as Trustee hereunder upon 30 days' prior written notice of
such resignation to the Sponsor. Upon its receipt of such notice of
resignation, the Sponsor promptly shall appoint a successor Delaware
Trustee (each, a "Successor Trustee") and such resignation shall take
effect when the Successor Trustee accepts in writing the Successor
Trustee's appointment as successor Delaware Trustee. If within such 30-day
period, the Sponsor has failed to take appropriate steps to appoint a
successor Trustee, the Delaware Trustee may, but shall not be required to,
petition any court of competent jurisdiction for the appointment of a
Successor Trustee. Such court may thereupon appoint a Successor Trustee
after such notice to the Sponsor as such court may deem proper and
prescribe. The resignation of the Delaware Trustee shall not be deemed to
constitute bad faith for the purposes of Section 4.2 (b) hereof.
SECTION 3.4 Institutional Trustee.
Prior to the issuance of the Preferred Securities and Common
Securities, the Sponsor shall appoint a trustee (the "Institutional
Trustee") meeting the requirements of an eligible trustee of the Trust
Indenture Act of 1939, as amended, by the execution of an amendment to this
Declaration executed by the Regular Trustees, the Sponsor, the
Institutional Trustee and the Delaware Trustee.
Section 3.5 Not Responsible for Recitals or Sufficiency of Declaration.
The recitals contained in this Declaration shall be taken as the
statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part
thereof. The Trustees make no representations as to the validity or
sufficiency of this Declaration.
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by
this Declaration or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's gross negligence or willful misconduct with respect to
such acts or omissions; and
(b) an Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who if selected by such
Indemnified Person has been selected with reasonable care, including
information, opinions, reports or statements as to the value and amount of
the assets, liabilities, profits, losses, or any other facts pertinent to
the existence and amount of assets from which distributions to holders of
Securities might properly be paid.
SECTION 4.2 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified Person
acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity, are agreed by the parties hereto to replace
such other duties and liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between an Indemnified Person and any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that are,
fair and reasonable to the Trust or any holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices, and any
applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall not
constitute a breach of this Declaration or any other agreement contemplated
herein or of any duty or obligation of the Indemnified Person at law or in
equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider
such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Trust
or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 4.3 Indemnification.
(a)(i) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or
in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to be liable
to the Trust unless and only to the extent that the Court of Chancery
of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an
action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 4.3(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 4.3(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 4.3(a) shall be paid by the Debenture Issuer
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Debenture
Issuer as authorized in this Section 4.3(a). Notwithstanding the
foregoing, no advance shall be made by the Debenture Issuer if a
determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular
Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs,
by independent legal counsel in a written opinion or (iii) the Common
Security Holder of the Trust, that, based upon the facts known to the
Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in
bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the Trust, or, with respect to
any criminal proceeding, that such Company Indemnified Person believed
or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Regular
Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty
to the Trust or its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section 4.3(a)
shall not be deemed exclusive of any other rights to which those
seeking indemnification and advancement of expenses may be entitled
under any agreement, vote of stockholders or disinterested directors
of the Debenture Issuer or Preferred Security Holders of the Trust or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office. All rights to
indemnification under this Section 4.3(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this
Section 4.3(a) is in effect. Any repeal or modification of this
Section 4.3(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 4.3(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 4.3(a) shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a Company Indemnified Person and shall inure to the
benefit of the heirs, executors and administrators of such a person.
(b)(i) The Debenture Issuer agrees to indemnify the (1) the
Delaware Trustee, (2) any Affiliate, to the full extent permitted by law,
of the Delaware Trustee, and (3) any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or
agents of the Delaware Trustee (each of the Persons in (1) through (3)
being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without gross negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust
or trusts hereunder, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against, or investigating, any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. (ii) To the fullest extent permitted by
applicable law, expenses (including reasonable and documented legal fees)
incurred by a Fiduciary Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Debenture Issuer prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Debenture Issuer of an
undertaking by or on behalf of the Fiduciary Indemnified Person to repay
such amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified as authorized in Section 4.3 (b) (i). (iii) The
obligation to indemnify and advance expenses as set forth in this Section
4.3(b) shall survive the termination of this Declaration and shall survive
the resignation or removal of the Delaware Trustee.
SECTION 4.4 Outside Businesses.
Any Covered Person, the Sponsor and the Delaware Trustee may
engage in or possess an interest in other business ventures of any nature
or description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent
ventures or the income or profits derived therefrom and the pursuit of any
such venture, even if competitive with the business of the Trust, shall not
be deemed wrongful or improper. No Covered Person, the Sponsor or the
Delaware Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character
that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor and the Delaware Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment or other opportunity.
Any Covered Person and the Delaware Trustee may engage or be interested in
any financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for or may act on
any committee or body of holders of, securities or other obligations of the
Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 Amendments.
At any time before the issue of any Securities, this Declaration
may be amended by, and only by, a written instrument executed by all of the
Regular Trustees and the Sponsor; provided, however, if the amendment
affects the rights, powers, duties, obligations or immunities of the
Delaware Trustee, the amendment shall not be effective unless approved in
writing by the Delaware Trustee.
SECTION 5.2 Termination of Trust.
(a) The Trust shall terminate and be of no further force or
effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Sponsor or the revocation of
the Sponsor's charter or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution
of the Sponsor, or the Trust; and
(iv) before the issue of any Securities, with the consent
of all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable upon completion of winding up by
the Trustees after the occurrence of an event referred to in Section
5.2(a), the Trustees shall file a certificate of cancellation with the
Secretary of State of the State of Delaware.
SECTION 5.3 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 5.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to
be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 5.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to
persons or circumstances other than those to which it is held invalid,
shall not be affected thereby.
SECTION 5.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature
pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused this Declaration
of Trust of Cendant Capital V to be executed as of the day and year first
above written.
/s/ Michael P. Monaco
-----------------------------------
Name: Michael P. Monaco
Title: Regular Trustee
/s/ James E. Buckman
-----------------------------------
Name: James E. Buckman
Title: Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ Joseph B. Feil
--------------------------------
Name: Joseph B. Feil
Title:
CENDANT CORPORATION, as Sponsor and
Debenture Issuer
By: /s/ Michael P. Monaco
--------------------------------
Name: Michael P. Monaco
Title: Vice Chairman and
Chief Executive Officer
EXHIBIT 12.1
CENDANT CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN MILLIONS)
In connection with the Company's discovery and announcement of accounting
irregularities, previously reported information for periods prior to
December 31, 1994 should not be relied upon. Accordingly, the computation
of Ratio of Earnings to Fixed Charges is presented for the six months ended
June 30, 1999 and for the years subsequent to and including December 31,
1995.
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------
June 30, 1999 1998 1997 1996 1995
------------------ ----------------------------------------------
Income from continuing operations before
income taxes, minority interest, extraordinary
gain and cumulative effect of accounting change $ 1,346.9 $ 291.7 $ 229.2 $ 518.6 $ 312.9
Plus: Fixed charges 362.8 674.5 407.3 323.6 289.4
Less: Equity income (loss) in unconsolidated affiliates 8.0 13.5 51.3 - -
Capitalized interest - - - 0.6 -
Minority interest in mandatorily redeemable
preferred securities 48.2 80.4 - - -
----------- -------- -------- ------- --------
Earnings available to cover fixed charges $ 1,653.5 $ 872.3 $ 585.2 $ 841.6 $ 602.3
=========== ========= ======== ======= ========
Fixed charges (1):
Interest, including amortization of deferred
financing costs $ 278.6 $ 509.0 $ 379.0 $ 299.9 $ 270.4
Capitalized interest - - - 0.6 -
Other charges, financing costs - 27.9 - - -
Minority interest in mandatorily redeemable
preferred securities 48.2 80.4 - - -
Interest portion of rental payment 36.0 57.2 28.3 23.1 19.0
----------- -------- -------- ------- --------
Total fixed charges $ 362.8 $ 674.5 $ 407.3 $ 323.6 $ 289.4
=========== ======== ======== ======= ========
Ratio of earnings to fixed charges 4.56x(2) 1.29x(3) 1.44x(3) 2.60x(3) 2.08x(3)
===== ===== ===== ===== =====
---------------
(1) Fixed charges consist of interest expense on all indebtedness
(including amortization of deferred financing costs) and the
portion of operating lease rental expense that is representative
of the interest factor (deemed to be one-third of operating lease
rentals).
(2) For the six months ended June 30, 1999, income from continuing
operations before income taxes and minority interest includes
non-recurring charges of $36.9 million and a net gain on
disposition of businesses of $749.5 million. Excluding such
items, the ratio of earnings to fixed charges for the six months
ended June 30, 1999 is 2.59x.
(3) For the years ended December 31, 1998, 1997, 1996 and 1995,
income from continuing operations before income taxes, minority
interest, extraordinary gain and cumulative effect of accounting
change includes non-recurring other charges of $810.4 million
(exclusive of financing costs of $27.9 million), $704.1 million,
$109.4 million and $97.0 million, respectively. Excluding such
charges, the ratio of earnings to fixed charges for the years
ended December 31, 1998, 1997, 1996 and 1995 is 2.49x, 3.17x,
2.94x and 2.42x, respectively.
Exhibit 23.1
Independent Auditors' Consent
We consent to the incorporation by reference in this Registration Statement
of Cendant Corporation on Form S-3 of our report dated May 10, 1999,
appearing in the Annual Report of Cendant Corporation on Form 10-K/A for
the year ended December 31, 1998 (which expresses an unqualified opinion
and includes explanatory paragraphs relating to certain litigation as
described in Note 18, and the change in the method of recognizing revenue
and membership solicitation costs as described in Note 2) and to the
reference to us under the heading "Experts" in the Prospectus, which is
part of this Registration Statement.
Parsippany, New Jersey
August 26, 1999
Exhibit 23.2
Independent Auditors' Consent
The Board of Directors
PHH Corporation:
We consent to the incorporation by reference in the Registration Statement
on Form S-3 of Cendant Corporation of our report dated April 30, 1997, with
respect to the consolidated statements of income, shareholder's equity and
cash flows of PHH Corporation and subsidiaries (the "Company") for the year
ended December 31, 1996, before the restatement related to the merger of
Cendant Corporation's relocation business with the Company and
reclassifications to conform to the presentation used by Cendant
Corporation, which report is included in the Annual Report on Form 10-K/A
of Cendant Corporation for the year ended December 31, 1998. We also
consent to the reference to our name under the heading "Experts" in the
Registration Statement.
KPMG LLP
Baltimore, Maryland
August 26, 1999
