UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
____________
Form
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
____________
Date of
Report (Date of earliest event reported) March
14, 2005 (March 8, 2005)
Cendant
Corporation
(Exact
name of Registrant as specified in its charter)
|
Delaware
(State
or other jurisdiction
of
incorporation) |
1-10308
(Commission
File No.) |
06-0918165
(I.R.S.
Employer
Identification
Number) |
|
9
West 57th
Street
New
York, NY
(Address
of principal
executive
office) |
10019
(Zip
Code)
|
Registrant's
telephone number, including area code (212)
413-1800
None
|
(Former
name or former address if changed since last
report) |
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
|
Item
1.01 |
Entry
into a Material Definitive Agreement. |
|
Item
1.02 |
Termination
of Material Definitive Agreement. |
On March
14, 2005, Cendant Corporation (“Cendant”) announced that its previously
disclosed strategic realignment and disposition of several non-core business
units will result in the streamlining of its division management structure and
changes in reporting relationships. Cendant’s press release announcing the
streamlining of its division management structure is included as Exhibit
99.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
In
connection with this strategic realignment and disposition, Kevin M. Sheehan,
Chief Executive Officer of our Vehicle Services Division, and Scott E. Forbes,
Senior Executive Vice President and Managing Director of Cendant Europe, Middle
East and Africa, will be leaving Cendant effective May 6, 2005.
In
connection with the departure of Messrs. Sheehan and Forbes, our Board of
Directors authorized separation agreements which will provide the officers with
severance benefits in exchange for a release of claims and an agreement to
provide Cendant with post-termination services and protections for no additional
compensation beyond the severance benefits described herein. Messrs. Sheehan and
Forbes will receive severance benefits comprised of a lump sum cash severance
payment equal to $6,839,625 and $4,709,250, respectively, which is equal to 299%
of each officer’s current rate of base salary plus current target bonus, and the
acceleration of equity incentive awards pursuant to such officers’ employment
agreements. In addition, Mr. Sheehan will receive vested post-termination
medical benefits pursuant to a program sponsored by Avis, and Mr. Forbes will
receive certain post-termination medical benefits and relocation benefits, both
pursuant to the terms of their existing employment agreements. In connection
with the separation agreements, Messrs. Sheehan's and Forbes' employment
agreements will terminate, except for certain provisions relating to
post-termination obligations that will survive.
In
addition to providing a release of claims against Cendant, Messrs. Sheehan’s and
Forbes’ separation agreements will provide for extended restricted periods
applicable to post-employment non-competition and non-solicitation covenants
which will now have terms of 3 years and 4 years, respectively. Messrs. Sheehan
and Forbes will also provide certain transition and consulting services to
Cendant through December 31, 2008, and will remain available for the rest of
their respective lives to provide assistance with Cendant legal matters for no
additional compensation.
|
Item
8.01 |
Other
Events. |
On March
8, 2005, we announced that our board of directors approved a change in our
dividend policy to increase our regular quarterly cash dividend by 22% to $0.11
from $0.09 per common share, effective with the third quarter dividend payment.
The actual declaration of any future dividends and the establishment of the
record dates related thereto remains subject to further action by our board. In
addition, we announced that our board formally approved our plans for the
previously announced disposition of our Marketing Services Division. As a
result, the division will be classified as a discontinued operation in the first
quarter of 2005. Our press release containing these announcements is included as
Exhibit
99.2 to this
Current Report on Form 8-K and is incorporated herein by reference.
|
Item
9.01 |
Financial
Statements and Exhibits. |
| (c) |
Exhibits |
|
99.1 |
Press
Release, dated March 14, 2005. | |
|
99.2 |
Press
Release, dated March 8, 2005. |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
CENDANT
CORPORATION
| |
|
By: |
/s/
Eric J. Bock |
|
Eric
J. Bock
Executive
Vice President, Law
and
Corporate Secretary |
Date:
March 14, 2005
CENDANT
CORPORATION
CURRENT
REPORT ON FORM 8-K
Report
Dated March 14, 2005 (March 8, 2005)
EXHIBIT
INDEX
|
Exhibit
No. |
Description | |||
|
99.1 |
Press
Release, dated March 14, 2005. | |||
|
99.2 |
Press
Release, dated March 8, 2005. | |||
Exhibit 99.1
Cendant
Announces Division Management Changes as
Company
Nears Completion of Strategic Realignment
New
York, March 14, 2005—Cendant Corporation
(NYSE:CD) today
announced that the Company’s previously disclosed strategic realignment and
disposition of several non-core business units will result in the streamlining
of its division management structure and changes in reporting
relationships.
In
keeping with the Company’s strategic realignment, Cendant will operate within
two vertical markets—Travel and Real Estate. The Real Estate Services Division
will continue under the leadership of Richard A. Smith, chairman and CEO of that
division. The Company’s Travel segment will comprise two integrated
groups—Travel Content and Travel Distribution. Stephen P. Holmes, chairman and
CEO of Cendant’s Hospitality Services Division will be responsible for Travel
Content, which includes the Hotel Group, Timeshare Resort Group, Vacation
Exchange Group, Vacation Rental Group and Cendant Car Rental Group. Samuel L.
Katz, chairman and CEO of the Travel Distribution Services Division will oversee
Travel Distribution, which includes Agency Services, Consumer Travel, Corporate
Travel Solutions and Supplier Services. As a result of the expected disposition
of the Company’s Marketing Services Division in the third quarter of 2005, the
Company will disaggregate its Europe, Middle East and Africa (EMEA) headquarters
in London, and the functions provided by this office will be subsumed by
Cendant’s U.S-based Corporate Group and/or operating units based in the UK.
Accordingly,
Kevin M. Sheehan, chairman and chief executive officer, Vehicle Services
Division and Scott Forbes, senior executive vice president of Cendant EMEA will
be leaving the Company.
Cendant’s
Chairman and CEO, Henry R. Silverman, stated: “The recent dispositions of our
non-core business units, including our tax preparation, mortgage, fleet
management and fuel card management units, and the pending sale of Marketing
Services, will position Cendant as a pure play travel and real estate company.
As part of the realignment, we are compelled to streamline our management
reporting structure to be more in line with the long-term operating structure of
the Company.
“Kevin
Sheehan has been a trusted advisor and strategic partner for more than 20 years
and has played an important role in the evolution of Cendant. Kevin took the
helm at Avis Group as president in 1999 following its initial public offering,
and later served as Cendant’s CFO after Avis was brought back into the Cendant
fold in 2001. Given the depth of his experience at Avis, Kevin assumed
responsibility for the Company’s Vehicle Services Division upon the acquisition
of Budget in 2003. Under Kevin’s stewardship, we have surpassed all expectations
for synergy creation through the
successful
integration of
Budget, substantially increased the services portion of our Fleet business, and
drove the growth of Wright Express, which culminated in Cendant receiving
approximately $1 billion of proceeds from its disposition through a public
offering this past month. With the recent spin-off of PHH and sale of the
Company’s fuel card management business, Kevin and I together concluded that his
work at Cendant is substantially complete. I am confident that Kevin’s diverse
leadership experiences and noteworthy accomplishments at Cendant will enable him
to realize his ultimate goal of leading a large public company on his
own.
“Scott
Forbes has made invaluable contributions to Cendant’s achievements during his
fifteen years from the inception of HFS through our Company’s recent
transformation. As one of my earliest senior executives, Scott played an
important leadership role in HFS’ formative years and the creation of Cendant,
culminating in his appointment as Chief Accounting Officer. He later identified
the opportunity and agreed to lead Cendant’s operations in EMEA at its nascent
stage. In this capacity, Scott served as the senior corporate executive outside
the United States and was responsible for the transformation of NCP and Green
Flag into thriving businesses that ultimately generated more than $1.6 billion
of combined proceeds upon disposition. He was also responsible for forming our
Vacation Rental Group in 2001, and successfully implemented its acquisition
strategy to make it the industry’s global leader with more than $1 billion of
annual rental value. As a result of Scott’s efforts, our operating divisions
have reached considerable scale in EMEA and he believes that his work is
substantially complete. I am grateful for his dedication to Cendant and for the
value he has created for our shareholders.
“Both
Kevin and Scott will be sorely missed by all of us at Cendant, and I wish them
much success as they pursue opportunities outside of the Company.”
As a
direct result of its strategic realignment and disposition of non-core
businesses, Cendant also announced that it expects to implement changes in the
Company’s segment reporting structure with
respect to its Travel Content group for
financial reporting purposes effective with its first quarter 2005 earnings
release. Travel
Content will contain three segments: Hospitality, Timeshare Resort and Vehicle
Rental. The
Company expects to re-format its 2005 guidance consistent with its new segment
reporting during the next several weeks.
About
Cendant
Cendant
is primarily a provider of travel and residential real estate services. With
approximately 80,000 employees, New York City-based Cendant provides these
services to businesses and consumers in over 100 countries.
Contacts:
Media
Contact:
|
Elliot
Bloom
212-413-1832 |
Kelli
Segal
212-413-1871 |
Investor
Relations:
|
Sam
Levenson
212-413-1834 |
Henry
A. Diamond
212-413-1920 |
Exhibit 99.2
CENDANT’S
BOARD OF DIRECTORS APPROVES 22% INCREASE IN
QUARTERLY
CASH DIVIDEND TO $0.11 PER COMMON SHARE
BEGINNING
IN THIRD QUARTER 2005
NEW
YORK, March 8, 2005— Cendant
Corporation (NYSE:
CD) today
announced that its board of directors approved a change in its dividend policy
to increase the Company’s regular quarterly cash dividend by 22% to $0.11 from
$0.09 per common share, effective with the third quarter dividend payment. The
actual declaration of any future dividends and the establishment of the record
dates related thereto remains subject to further action by Cendant’s board.
Cendant’s
President and Chief Financial Officer, Ronald L. Nelson, commented: “When we
initiated the dividend in 2004, we committed to review and increase the payment
at least consistent with our earnings growth. With this move, we will have
increased the dividend by over 57% in just 18 months. This increase reflects the
board's and management's confidence in the Company's strategic focus on its real
estate and travel businesses and in the prospects for growth of these
businesses."
Additionally,
the board has formally approved the Company’s plans for the previously announced
disposition of its Marketing Services Division. As a result, the division will
be classified as a discontinued operation in the first quarter of 2005. The
Company
continues to anticipate a summer closing.
About
Cendant Corporation
Cendant
Corporation is primarily a provider of travel and residential real estate
services. With approximately 80,000 employees, New York City-based Cendant
provides these services to business and consumers in over 100 countries. More
information about Cendant, its companies, brands and current SEC filings may be
obtained by visiting the Company's Web site at http://www.cendant.com.
Statements
about future results made in this release constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on current expectations and the current economic
environment. The Company cautions that these statements are not guarantees of
future performance. Actual results may differ materially from those expressed or
implied in the forward-looking statements. Important assumptions and other
important factors that could cause actual results to differ materially from
those in the forward-looking statements are specified in Cendant’s Annual Report
on Form 10-K for the period ended December 31, 2004.
Such
forward-looking statements include projections. Such projections were not
prepared in accordance with published guidelines of the American Institute of
Certified Public Accountants or the Securities and Exchange Commission regarding
projections and forecasts, nor have such projections been audited, examined or
otherwise reviewed by independent auditors of Cendant or its affiliates. In
addition, such projections are based upon many estimates and are inherently
subject to significant economic, competitive and other uncertainties and
contingencies, including but not limited to the impact of war or terrorism,
which are beyond the control of management of Cendant and its affiliates.
Accordingly,
actual results may be materially higher or lower than those projected. The
inclusion of such projections herein should not be regarded as a representation
by Cendant or its affiliates that the projections will prove to be
correct.
Media
Contacts:
Elliot
Bloom
(212)
413-1832
Kelli
Segal
212-413-1871
Investor
Contacts:
Sam
Levenson
212-413-1834
Henry A.
Diamond
212-413-1920