UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.            )

Filed by the Registrant þ
Filed by a Party other than the Registrant o

Check the appropriate box:

Payment of Filing Fee (Check the appropriate box):

March 1, 2005

Dear Fellow Stockholder:

     You are cordially invited to attend the Annual Meeting of Stockholders of Cendant Corporation (the “Company”), which will be held at the Roosevelt Hotel, 45 East 45th Street, New York, New York 10017, on April 26, 2005 at 3:00 p.m., New York time. We look forward to greeting as many of our stockholders as possible.

     This booklet includes the Notice of Annual Meeting and the Proxy Statement. The Proxy Statement describes the business to be conducted at the Annual Meeting and provides other information concerning the Company of which you should be aware when you vote your shares.

     Admission to the Annual Meeting will be by ticket only. If you are a registered stockholder planning to attend the meeting, please check the appropriate box on the proxy card and retain the bottom portion of the card as your admission ticket. If your shares are held through an intermediary, such as a bank or broker, please follow the instructions under the Additional Information section of the Proxy Statement to obtain a ticket.

     If you are unable to attend the Annual Meeting in person, you may listen to the proceedings through the Internet. To listen to the live webcast, please log on at www.cendant.com and select “News Releases and Webcasts” in the “Investor Center” section of the website. The webcast will begin at 3:00 p.m., New York time, and will remain on the Company’s website for one year. The webcast will permit stockholders to listen to the Annual Meeting but will not provide for the ability to vote or present any stockholder proposals.

     Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the meeting. As a stockholder of record, you can vote your shares by telephone, electronically via the Internet or by marking your votes on the enclosed proxy card. If you vote on the enclosed proxy card, you must sign, date and mail the proxy card in the enclosed envelope. If you decide to attend the Annual Meeting and vote in person, you may then withdraw your proxy.

     On behalf of the Board of Directors and the employees of Cendant Corporation, I would like to express my appreciation for your continued interest in the affairs of the Company.

Sincerely,

Henry R. Silverman
Chairman of the Board and
Chief Executive Officer

TABLE OF CONTENTS

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NOTICE OF 2005 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
APRIL 26, 2005

     NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Cendant Corporation (the “Company”) will be held on April 26, 2005 at 3:00 p.m., New York time, at Roosevelt Hotel, 45 East 45th Street, New York, New York 10017 (the “Meeting”), to consider and vote upon the following matters:

     1. To elect ten directors for a one-year term expiring in 2006 and until their successors are duly elected and qualified;

     2. To ratify the appointment of Deloitte & Touche LLP as the auditors of the Company’s financial statements for fiscal year 2005;

     3. To consider and approve an amendment to the Cendant Amended and Restated 1999 Non-Employee Directors Deferred Compensation Plan;

     4. To consider and approve the Cendant 2005 UK Share Incentive Plan;

     5. To consider and vote upon two stockholder proposals; and

     6. To transact such other business as may properly come before the Meeting or any adjournment or postponement thereof.

     The Board of Directors has fixed the close of business on February 28, 2005 as the record date for the Meeting. Only stockholders of record at that time are entitled to notice of, and to vote at, the Meeting and any adjournment or postponement thereof. A list of stockholders entitled to vote at the Meeting will be available for examination by any stockholder, for any purpose germane to the Meeting, at the Meeting and for ten days prior to the Meeting during ordinary business hours at One Campus Drive, Parsippany, New Jersey, the Company’s principal place of business.

By Order of the Board of Directors

ERIC J. BOCK
Secretary

Dated: March 1, 2005

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CENDANT CORPORATION
9 West 57th Street
New York, New York 10019

ABOUT THE ANNUAL MEETING

Who is soliciting my vote?

     The Board of Directors of Cendant Corporation, a Delaware corporation (the “Company”), is soliciting your vote at the 2005 Annual Meeting of Stockholders, and any adjournment or postponement thereof (the “Meeting”), to be held on the date, at the time and place, and for the purposes set forth in the foregoing notice. This Proxy Statement, the accompanying notice and the enclosed proxy card are first being mailed to stockholders on or about March 7, 2005.

What will I be voting on?

How many votes do I have?

     You will have one vote for every share of the Company’s common stock, par value $0.01 per share (the “Common Stock”), you owned on February 28, 2005 (the “Record Date”).

How many votes can be cast by all stockholders?

     1,055,172,521, consisting of one vote for each of the Company’s shares of Common Stock that were outstanding on the Record Date. There is no cumulative voting, and the holders of the Common Stock vote together as a single class.

How many votes must be present to hold the Meeting?

     One-third of the outstanding shares of Common Stock entitled to vote at the Meeting, or 351,724,174 votes, must be present, in person or by proxy, to constitute a quorum at the Meeting. Stockholders of record who are present at the Meeting, in person or by proxy, and who abstain from voting, including brokers holding customers’ shares of record who cause abstentions to be recorded at the Meeting, will be included in the number of stockholders present at the Meeting for purposes of determining whether a quorum is present.

How many votes are required to elect directors and adopt the
other proposals?

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How do I vote?

     You can vote by valid proxy received by telephone, via the Internet or by mail. If voting by mail, you must:

     Alternatively, in lieu of returning signed proxy cards, the Company’s stockholders of record can vote their shares by telephone or via the Internet. If you are a registered stockholder (that is, if you hold your stock in certificate form), you may vote by telephone or electronically through the Internet by following the instructions included with your proxy card. If your shares are held in “street name” such as in a stock brokerage account or by a bank or other nominee, please check your proxy card or contact your broker or nominee to determine whether you will be able to vote by telephone or electronically through the Internet. The deadline for voting by telephone or electronically through the Internet is 4:00 p.m., New York time, on the business day prior to the date of the Meeting.

Can I change my vote?

     Yes. A proxy may be revoked at any time prior to the voting at the Meeting by submitting a later dated proxy (including a proxy by telephone or electronically through the Internet), by giving timely written notice of such revocation to the Secretary of the Company or by attending the Meeting and voting in person. However, if you hold shares in “street name,” you may not vote these shares in person at the Meeting unless you bring with you a legal proxy from the stockholder of record.

What if I do not vote for some of the matters listed on my proxy
card?

     Shares of Common Stock represented by proxies received by the Company (whether through the return of the enclosed proxy card, by telephone or through the Internet), where the stockholder has specified his or her choice with respect to the proposals described in this Proxy Statement (including the election of Directors), will be voted in accordance with the specification(s) so made.

     If your proxy is properly executed but does not contain voting instructions, or if you vote by telephone or via the Internet without indicating how you want to vote, your shares will be voted:

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How do participants in savings plans vote?

     For participants in the Cendant Corporation Employee Savings Plan, the Avis Voluntary Investment Savings Plan, the Avis Voluntary Investment Savings Plan for Bargaining Hourly Employees, the Cendant Car Rental Operations, Inc. Retirement Savings Plan and the Trilegiant Corporation Employee Savings Plan (collectively, the “Savings Plans”), with shares of Common Stock credited to their accounts, voting instructions for the trustees of the Savings Plans are also being solicited through this Proxy Statement. In accordance with the provisions of the Savings Plans, the respective trustees will vote shares of Common Stock in accordance with instructions received from the participants to whose accounts such shares are credited. To the extent such instructions are not received prior to twelve o’clock noon, New York time, on April 22, 2005, the trustees of the Savings Plans will vote the shares with respect to which it has not received instructions proportionately in accordance with the shares for which it has received instructions. Instructions given with respect to shares in accounts of the Savings Plans may be changed or revoked only in writing, and no such instructions may be revoked after twelve o’clock noon, New York time, on April 22, 2005. Participants in the Savings Plans are not entitled to vote in person at the Meeting. If a participant in any of the Savings Plans has shares of Common Stock credited to his or her account and also owns other shares of Common Stock, he or she should receive separate proxy cards for shares credited to his or her account in the Savings Plans and any other shares that he or she owns. All such proxy cards should be completed, signed and returned to the transfer agent to register voting instructions for all shares owned by him or her or held for his or her benefit in the Savings Plans.

Could other matters be decided at the Meeting?

     The Board of Directors does not intend to bring any matter before the Meeting other than those set forth above, and the Board is not aware of any matters that anyone else proposes to present for action at the Meeting. However, if any other matters properly come before the Meeting, the persons named in the enclosed proxy, or their duly constituted substitutes acting at the Meeting, will be authorized to vote or otherwise act thereon in accordance with their judgment on such matters.

Do I need a ticket to attend the Meeting?

     Yes. Attendance at the Meeting will be limited to stockholders as of the Record Date, their authorized representatives and guests of the Company. Admission will be by ticket only. For registered stockholders, the bottom portion of the proxy card enclosed with the Proxy Statement is the Meeting ticket. Beneficial owners with shares held through an intermediary, such as a bank or broker, should request tickets in writing from Investor Relations at Cendant Corporation, 9 West 57th Street, New York, New York 10019, and include proof of ownership, such as a bank or brokerage firm account statement or letter from the broker, trustee, bank or nominee holding their stock, confirming beneficial ownership. Stockholders who do not obtain tickets in advance may obtain them on the Meeting date at the registration desk upon verifying his or her stock ownership as of the Record Date. In accordance with the Company’s security procedures, all persons attending the Meeting must present a picture identification along with their admission ticket or proof of beneficial ownership in order to gain admission. Admission to the Meeting will be expedited if tickets are obtained in advance. Tickets may be issued to others at the discretion of the Company.

How can I access the Company’s proxy materials and annual report electronically?

     A copy of the Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (“SEC”) for its latest fiscal year is available without charge to stockholders at the Company’s website at www.cendant.com or upon written request to Cendant Corporation, 9 West 57th Street, New York, New York 10019, Attention: Investor Relations. You can elect to receive future annual reports and proxy statements electronically by marking the appropriate box on your proxy card or by following the instructions provided if you vote via the Internet or by telephone.

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     NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED AND THE DELIVERY OF THIS PROXY STATEMENT SHALL, UNDER NO CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THIS PROXY STATEMENT.

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BOARD OF DIRECTORS

General

     The Board of Directors presently consists of fifteen members. Directors elected prior to the Company’s 2004 annual meeting of stockholders served in three classes with staggered three-year terms. Directors elected in and after the Company’s 2004 annual meeting of stockholders serve for a term of one year expiring at the annual meeting of stockholders to be held in the year following their election and until their successors are elected and qualified. The name and age of each Director, his or her position with the Company and the year in which such Director’s term expires is set forth below:

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Biographical Information for Nominees and Continuing Directors

     At the Meeting, the stockholders will vote on the election of Messrs. Coleman, Mulroney, Nederlander, Nelson, Pittman and Smith and Mses. Biblowit, Mills, Richards and Rosenberg to serve as Directors for a one-year term ending at the 2006 annual meeting of stockholders and until their successors are duly elected and qualified. Certain additional information regarding each of the foregoing nominees, and each other current member of the Board of Directors, as of February 28, 2005, is set forth below.

		Mr. Silverman has been Chief Executive Officer and a Director of the Company since December 1997, as well as Chairman of the Board of Directors and the Executive Committee since July 1998. Mr. Silverman was President of the Company from December 1997 until October 2004. Mr. Silverman was Chairman of the Board, Chairman of the Executive Committee and Chief Executive Officer of HFS Incorporated (“HFS”) from May 1990 until December 1997.
		Ms. Biblowit has been a Director since April 2000. Since April 2001, Ms. Biblowit has been President of The Breast Cancer Research Foundation. From July 1997 until March 2001, she served as Vice Dean for External Affairs for the New York University School of Medicine and Senior Vice President of the Mount Sinai-NYU Health System. From June 1991 to June 1997, Ms. Biblowit was Senior Vice President and Executive Director of the Capital Campaign for the American Museum of Natural History.
		Mr. Buckman has been a Vice Chairman since November 1998 and General Counsel and a Director of the Company since December 1997. Mr. Buckman was a Senior Executive Vice President of the Company from December 1997 until November 1998. Mr. Buckman was Senior Executive Vice President, General Counsel and Assistant Secretary of HFS from May 1997 to December 1997, a Director of HFS from June 1994 to December 1997 and Executive Vice President, General Counsel and Assistant Secretary of HFS from February 1992 to May 1997.
		Mr. Coleman has been a Director since December 1997 and Presiding Director at executive sessions of the Board since February 2003. Mr. Coleman was a Director of HFS from April 1997 until December 1997. Mr. Coleman is presently a Senior Advisor to Major League Baseball. Mr. Coleman was President of The National League of Professional Baseball Clubs from 1994 to 1999, having previously served since 1992 as Executive Director, Market Development of Major League Baseball. Mr. Coleman is a Director of the following corporations which file reports pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”): Omnicom Group Inc., H.J. Heinz Company, Aramark Corporation, Churchill Downs Inc. and Electronic Arts Inc.

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		Mr. Edelman has been a Director since December 1997 and was a Director of HFS from November 1993 until December 1997. Mr. Edelman has been Of Counsel to Paul, Hastings, Janofsky & Walker, LLP, a New York City law firm, since June 2000. Mr. Edelman was a partner with Battle Fowler, which merged with Paul, Hastings, Janofsky & Walker, from 1972 through 1993 and was Of Counsel to Battle Fowler from 1994 until June 2000. Mr. Edelman also serves as a Director of the following corporations which file reports pursuant to the Exchange Act: Capital Trust, Arcadia Realty Trust and Ashford Hospitality Trust, Inc. See “Certain Relationships and Related Transactions.”
		Mr. Herrera has been a Director since January 2004. Since December 2003, Mr. Herrera has served as President and Chief Executive Officer of Herrera-Cristina Group, Ltd., a Hispanic-owned multidisciplinary management firm. From August 1998 to January 2004, Mr. Herrera served as President and Chief Executive Officer of the United States Hispanic Chamber of Commerce. Mr. Herrera served as President of David J. Burgos & Associates, Inc. from December 1979 until July 1998.
		Mr. Holmes has been a Vice Chairman and Director of the Company and Chairman and Chief Executive Officer of the Hospitality Services Division of the Company since December 1997. Mr. Holmes was Vice Chairman of HFS from September 1996 until December 1997 and was a Director of HFS from June 1994 until December 1997. From July 1990 through September 1996, Mr. Holmes served as Executive Vice President, Treasurer and Chief Financial Officer of HFS.
		Ms. Mills has been a Director since June 2000. Ms. Mills has been Senior Vice President and Counselor for Operations and Administration for New York University since May 2002. From October 1999 to November 2001, Ms. Mills was Senior Vice President for Corporate Policy and Public Programming of Oxygen Media, Inc. From 1997 to 1999, Ms. Mills was Deputy Counsel to the former President of the United States, William J. Clinton. From 1993 to 1996, Ms. Mills also served as Associate Counsel to the President.
		Mr. Mulroney has been a Director since December 1997 and was a Director of HFS from April 1997 until December 1997. Mr. Mulroney was Prime Minister of Canada from 1984 to 1993 and is currently Senior Partner in the Montreal-based law firm, Ogilvy Renault. Mr. Mulroney is a Director of the following corporations which file reports pursuant to the Exchange Act: America Online Latin America, Inc., Archer Daniels Midland Company Inc., Barrick Gold Corporation, Trizec Properties Inc. and Quebecor, Inc. (including its subsidiary, Quebecor World Inc.). See “Certain Relationships and Related Transactions.”

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		Mr. Nederlander has been a Director since December 1997 and Chairman of the Corporate Governance Committee since October 2002. Mr. Nederlander was a Director of HFS from July 1995 until December 1997. Mr. Nederlander has been President and/or Director since November 1981 of the Nederlander Organization, Inc., owner and operator of legitimate theaters in the City of New York. Since December 1998, Mr. Nederlander has been a managing partner of the Nederlander Company, LLC, operator of legitimate theaters outside the City of New York. Mr. Nederlander was Chairman of the Board of Riddell Sports, Inc. (now known as Varsity Brands, Inc.) from April 1988 to September 2003. He has been a limited partner and a Director of the New York Yankees since 1973. Mr. Nederlander has been President of Nederlander Television and Film Productions, Inc. since October 1985 and was Chairman of the Board and Chief Executive Officer of Mego Financial Corp. from January 1988 to January 2002. Mr. Nederlander is currently a Director of Allis-Chalmers Corp., which files reports pursuant to the Exchange Act.
		Mr. Nelson has been a Director since April 2003, Chief Financial Officer since May 2003 and President since October 2004. From April 2003 to May 2003, Mr. Nelson was Senior Executive Vice President, Finance. From November 1994 until March 2003, Mr. Nelson was Co-Chief Operating Officer of DreamWorks SKG. Prior thereto, he was Executive Vice President, Chief Financial Officer and a Director at Paramount Communications, Inc., formerly Gulf+Western Industries, Inc.
		Mr. Pittman has been a Director since December 1997 and was a Director of HFS from July 1994 until December 1997. Mr. Pittman is a member of Pilot Group Manager LLC, the manager of Pilot Group LP, a private equity fund. From May 2002 to July 2002, Mr. Pittman served as Chief Operating Officer of AOL Time Warner, Inc. Mr. Pittman also served as Co-Chief Operating Officer of AOL Time Warner prior to assuming these responsibilities. From February 1998 until January 2001, Mr. Pittman was President and Chief Operating Officer of America Online, Inc., a provider of internet online services. Mr. Pittman also serves as a Director of Electronic Arts Inc., which files reports pursuant to the Exchange Act.
		Ms. Richards has been a Director since March 2003 and Chairman of the Audit Committee since October 2004. Since November 2003, Ms. Richards has been Director of Development at the Saltus Grammar School, the largest private school in Bermuda. From January 2001 until March 2003, Ms. Richards served as Chief Financial Officer of Lombard Odier Darier Hentsch (Bermuda) Limited in Bermuda, a trust company business. From January 1999 until December 2000, she was Treasurer of Gulfstream Financial Limited, a stock brokerage company. From January 1999 to June 1999, Ms. Richards served as a consultant to Aon Group of Companies, Bermuda, an insurance brokerage company, after serving in different positions from 1988 through 1998. These positions included Controller, Senior Vice President and Group Financial Controller and Chief Financial Officer.

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		Ms. Rosenberg has been a Director since April 2000. From January 2000 to September 2003, Ms. Rosenberg served as Vice Chairwoman of Equity Group Investments, Inc., a privately held investment company. From October 1994 to December 1999, Ms. Rosenberg was President and Chief Executive Officer of Equity Group Investments, Inc. Ms. Rosenberg serves as a Director of the following companies which file reports pursuant to the Exchange Act: CVS Corporation, Manufactured Home Communities, Inc., Equity Residential Properties Trust, Equity Office Property Trust and Ventas, Inc.
		Mr. Smith has been a Director since December 1997 and Chairman of the Compensation Committee since October 2004. Mr. Smith was a Director of HFS from February 1993 until December 1997. Until recently, Mr. Smith served as the Chairman of the Board of American Remanufacturers Inc., a Chicago, Illinois automobile parts remanufacturer in which Mr. Smith has an equity interest. From February 1999 to September 2003, Mr. Smith served as Chief Executive Officer of Car Component Technologies, Inc., an automobile parts remanufacturer located in Bedford, New Hampshire. Mr. Smith is the retired Chairman and Chief Executive Officer of American Express Bank, Ltd. (“AEBL”). Mr. Smith joined AEBL’s parent company, the American Express Company, in 1981 as Corporate Treasurer before moving to AEBL and serving as Vice Chairman and Co-Chief Operating Officer and then President prior to becoming Chief Executive Officer.

Functions and Meetings of the Board of Directors

   Statement on Corporate Governance

     Overview. The Board of Directors has implemented numerous corporate governance enhancements in recent years to further strengthen the Board of Directors’ capacity to oversee the Company and to serve the long-term interests of all stockholders. The Company’s corporate governance guidelines, director independence criteria, committee charters, codes of conduct and other documents setting forth the Company’s corporate governance practices can be accessed in the “Investor Center — Corporate Governance” section of the Company’s website at www.cendant.com or by writing to the Company at Cendant Corporation, 9 West 57th Street, New York, New York 10019, Attention: Investor Relations. In addition, the Board has reviewed the provisions of the Sarbanes-Oxley Act of 2002, the rules of the SEC and the New York Stock Exchange’s governance listing standards regarding corporate governance policies and procedures and determined that the Company is in compliance with all such standards.

     Director Independence. The Board has created a set of director independence criteria (“Director Independence Criteria”) for evaluating the independence of each of the Directors, which are more stringent than the New York Stock Exchange (“NYSE”) governance standards. In January 2005, the Board undertook its annual review of Director independence pursuant to NYSE Rule 303A.02(a) and the Company’s Director Independence Criteria. During this review, the Board reviewed whether any transactions or relationships exist currently or during the past three years existed between each Director and the Company and its subsidiaries, affiliates and equity investors or independent auditors. The Board also examined whether there were any transactions or relationships between each Director and members of the senior management of the Company or their affiliates. As a result of this review, the Board affirmatively determined that two-thirds of the Directors were independent under the standards set forth in the Company’s Director Independence Criteria and by the NYSE standards. Messrs. Silverman, Buckman, Holmes and Nelson, who are employees of the Company, and Mr. Edelman, who is of counsel to a law firm that represents the Company from time to time, were not deemed independent. A copy of the Company’s Director Independence Criteria is attached to this Proxy Statement as Annex A and also can be found in the “Investor Center — Corporate Governance” section of the Company’s website at

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www.cendant.com. A copy may also be obtained upon request from the Company’s Corporate Secretary at the address provided above.

     Presiding Director. In February 2003, the Board of Directors created a new position of Presiding Director. The Presiding Director’s primary responsibilities include presiding over periodic executive sessions of the non-management members of the Board of Directors, advising the Chairman of the Board and Committee chairs with respect to meeting agenda and information needs, providing advice with respect to the selection of Committee chairs and performing other duties that the Board may from time to time delegate to assist it in the fulfillment of its responsibilities. The non-management members of the Board of Directors have designated Mr. Coleman to serve in this position until the Company’s 2006 annual meeting of stockholders.

     Communicating with the Board of Directors. Stockholders may send communications to the Company’s Board of Directors by writing to the Board at Cendant Corporation, 9 West 57th Street, New York, New York 10019. In addition, stockholders interested in communicating directly with the Presiding Director or with any other non-management Director may do so by writing to Cendant Corporation
at the same address, Attention: Presiding Director, c/o the Corporate Secretary or via e-mail at presidingdirector@cendant.com. The Presiding Director will review and distribute all stockholder communications received to the intended recipients and/or distribute to the full Board, as appropriate.

     Codes of Conduct. The Board has adopted a code of conduct that applies to all officers and employees, including the Company’s principal executive officer, principal financial officer and principal accounting officer. The Board has also adopted a code of business conduct and ethics for Directors. Both codes of conduct are available in the “Investor Center — Corporate Governance” section of the Company’s website at www.cendant.com, or by writing the Company at Cendant Corporation, 9 West 57th Street, New York, New York 10019, Attention: Investor Relations. The purpose of these codes of conduct is to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; to promote full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by the Company; and to promote compliance with all applicable rules and regulations that apply to the Company and its officers and Directors.

Board Meetings

     The Board of Directors held eleven meetings and acted by unanimous written consent on two occasions during 2004. In 2004, all incumbent Directors attended at least 75% of the aggregate number of meetings of the Board and committees of the Board on which they served. All Directors are required to attend each regularly scheduled Board meeting, as well as each annual meeting of the Company’s stockholders (subject to certain limited exceptions). In 2004, the entire Board of Directors attended the Company’s annual meeting of stockholders.

Committees of the Board

   Audit Committee

     The Audit Committee is comprised of Mses. Richards (Chairman), Mills and Rosenberg and Mr. Smith (the “Audit Committee”). Ms. Richards replaced Mr. Smith as Chairman of the Audit Committee, effective as of October 19, 2004. The Audit Committee oversees the accounting and financial reporting processes of the Company, as well as the audits of the financial statements of the Company. See “Report of Audit Committee” below. The Board has determined that all members of the Audit Committee are independent Directors under the rules of the NYSE and the Company’s Director Independence Criteria and that each member of the Audit Committee has the ability to read and understand fundamental financial statements. The Board has determined that each of Ms. Richards and Mr. Smith qualify as an “Audit Committee financial expert” as defined by the rules of the SEC, and, in addition to being independent under the Company’s Director Independence Criteria and the rules of the NYSE, are independent within the meaning of applicable SEC rules. A copy of the Audit Committee

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charter is attached to this Proxy Statement as Annex B and also can be found in the “Investor Center — Corporate Governance” section of the Company’s website at www.cendant.com, or may be obtained by contacting the Company’s Corporate Secretary. The Audit Committee held ten meetings in 2004.

   Compensation Committee

     The Compensation Committee is comprised of Mr. Smith (Chairman) and Mses. Biblowit and Rosenberg (the “Compensation Committee”). Ms. Rosenberg joined the Compensation Committee on July 20, 2004, and Mr. Coleman retired from the Compensation Committee, effective as of October 19, 2004. The Board of Directors has determined that each member of the Compensation Committee is an independent Director under the rules of the NYSE and the Company’s Director Independence Criteria. The Compensation Committee administers the Company’s equity compensation plans, reviews and administers all compensation arrangements for executive officers and establishes and reviews general policies relating to the compensation and benefits of the Company’s officers and employees. The text of the Compensation Committee charter can be found in the “Investor Center — Corporate Governance” section of the Company’s website at www.cendant.com, or may be obtained by contacting the Company’s Corporate Secretary. The Compensation Committee held seven meetings and acted by unanimous written consent on two occasions in 2004.

   Corporate Governance Committee

     The Corporate Governance Committee is comprised of Messrs. Nederlander (Chairman) and Mulroney and Mses. Mills and Rosenberg (the “Corporate Governance Committee”). The Board of Directors has determined that each member of the Corporate Governance Committee qualifies as an independent Director under the rules of the NYSE and the Company’s Director Independence Criteria. The responsibilities of the Corporate Governance Committee include identifying and recommending to the Board appropriate Director nominee candidates and providing oversight with respect to corporate governance matters. The text of the Corporate Governance Committee charter can be found in the “Investor Center — Corporate Governance” section of the Company’s website at www.cendant.com, or may be obtained by contacting the Company’s Corporate Secretary. The Corporate Governance Committee held three meetings and acted by unanimous written consent on two occasions in 2004.

     Director Nomination Procedures. The Corporate Governance Committee considers the appropriate balance of experience, skills and characteristics required of the Board of Directors. It seeks to ensure that at least two-thirds of the Directors are independent under the rules of the NYSE and the Company’s more stringent Director Independence Criteria; that all members of the Company’s Audit Committee meet the Company’s Director Independence Criteria and the financial literacy requirements under the rules of the NYSE, and that at least one of them qualifies as an “Audit Committee financial expert” under the rules of the SEC; and that all members of the Compensation Committee and the Corporate Governance Committee meet the Company’s Director Independence Criteria. Nominees for Director are selected on the basis of their depth and breadth of experience, wisdom, integrity, ability to make independent analytical inquiries, understanding of the Company’s business environment, and willingness to devote adequate time to Board duties.

     The Corporate Governance Committee will consider written proposals from stockholders for nominees for Director. In considering candidates submitted by stockholders, the Corporate Governance Committee will take into consideration the needs of the Board and the qualifications of the candidate. Any such nominations should be submitted to the Corporate Governance Committee, c/o the Corporate Secretary of the Company, and should include the following: (a) the name of the stockholder and evidence of the person’s ownership of the Company’s Common Stock, including the number of shares owned and the length of time of ownership; and (b) the name of the candidate, the candidate’s resume or a listing of his or her qualifications to be a Director of the Company and the person’s consent to be named as a Director if selected by the Corporate Governance Committee and nominated by the Board. The written proposal

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should be submitted in the time frame described in the By-laws of the Company and under the caption “Stockholder Proposals for 2006 Annual Meeting” below.

     The process for identifying and evaluating nominees to the Board of Directors is initiated by identifying a candidate who meets the criteria for selection as a nominee and has the specific qualities or skills being sought based on input from members of the Board and, if the Corporate Governance Committee deems appropriate, a third-party search firm. These candidates are evaluated by the Corporate Governance Committee by reviewing the candidates’ biographical information and qualification and checking the candidates’ references. Qualified nominees are interviewed by at least one member of the Corporate Governance Committee. Using the input from such interview and other information obtained by them, the Corporate Governance Committee evaluates whether such prospective candidate is qualified to serve as a Director and whether the committee should recommend to the Board that the Board nominate this prospective candidate or elect such candidate to fill a vacancy on the Board. Candidates recommended by the Corporate Governance Committee are presented to the Board for selection as nominees to be presented for the approval of the stockholders or for election to fill a vacancy.

     The Corporate Governance Committee expects that a similar evaluation process will be used to evaluate nominees for Director recommended by stockholders. However, to date, the Company has not received any stockholder proposal to nominate a Director.

   Policy Committee

     The Policy Committee is comprised of Messrs. Coleman (Chairman), Herrera and Edelman and Ms. Biblowit (the “Policy Committee”). The Policy Committee is responsible for reviewing, identifying and, when appropriate, bringing to the attention of the Board political, social and legal trends and issues that may have an impact on the business operations, financial performance or public image of the Company, as well as for making recommendations to the Board on corporate policies and practices that relate to public policy. The Policy Committee held two meetings in 2004.

   Executive Committee

     The Executive Committee is comprised of Messrs. Silverman (Chairman), Buckman, Nelson and Edelman (the “Executive Committee”). The Executive Committee has and may exercise all of the powers of the Board of Directors when the Board is not in session, including the power to authorize the issuance of stock, except that the Executive Committee has no power to (a) alter, amend or repeal the By-Laws or any resolution or resolutions of the Board of Directors, (b) declare any dividend or make any other distribution to the stockholders of the Company, (c) appoint any member of the Executive Committee, or (d) take any other action which legally may be taken only by the full Board of Directors. The Chairman of the Board will serve as Chairman of the Executive Committee. The Executive Committee held one meeting and acted by unanimous written consent on 24 occasions in 2004.

Director Compensation

     In 2003, the Corporate Governance Committee undertook a study of director compensation (the “Director Compensation Review”) and adopted the following guidelines for director compensation: (i) compensation should fairly pay Directors for the work and time commitment required in a company the size and scope of the Company; (ii) compensation should align Director interests with the long-term interests of the Company’s stockholders; and (iii) the structure of compensation should be simple, transparent and easy for stockholders to understand. The Corporate Governance Committee retained an independent compensation consultant to assist the committee in formulating a new compensation structure to satisfy the new guidelines and to provide a written report verifying the reasonableness of such new compensation structure. As a result of such undertaking, the Corporate Governance Committee recommended, and the Board approved, a modified Non-Employee Director compensation program effective January 1, 2004, which is described below.

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     The following sets forth the compensation payments made to Non-Employee Directors in 2004 following the Director Compensation Review (amounts shown as dollars unless otherwise indicated):

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information set forth on the following table is furnished as of February 28, 2005 as to those shares of the Company’s Common Stock beneficially owned by (i) each person who is known by the Company to own beneficially more than 5% of the Company’s Common Stock, (ii) each of its Directors and each of its executive officers named in the Summary Compensation Table below, and (iii) all directors and executive officers as a group.

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EXECUTIVE OFFICERS

     The executive officers of the Company as of the date of this Proxy Statement are set forth in the table below. All executive officers are appointed at the annual meeting or interim meetings of the Board of Directors. Each executive officer is appointed by the Board to hold office until his or her successor is duly appointed and qualified.

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     Biographical information concerning the Executive Officers of the Company who also serve as Directors is set forth above under “Board of Directors — Biographical Information for Nominees and Continuing Directors.” Biographical information concerning all other Executive Officers is set forth below.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

Summary Compensation Table

     The following table sets forth the 2002, 2003 and 2004 cash and non-cash compensation awarded to or earned by each person who served as Chief Executive Officer of the Company during 2004 and the four other most highly compensated executive officers of the Company (the “Named Executive Officers”):

SUMMARY COMPENSATION TABLE

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Option Grants in 2004

     The following table summarizes option grants during the last fiscal year made to the Named Executive Officers.

OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS

Aggregated Option Exercises in 2004 and Year-End Option Values

     The following table summarizes the exercise of Common Stock options by the Named Executive Officers during the last fiscal year and the value of unexercised options held by such officers as of the end of such fiscal year:

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Equity Compensation Plan Information

     The following table provides information about shares of Common Stock that may be issued upon the exercise of options and restricted stock units under all of the Company’s existing equity compensation plans as of December 31, 2004. The table excludes 8.5 million shares of Common Stock approved by stockholders issued or available for issuance pursuant to the 1998 Employee Stock Purchase Plan.

     1999 Broad-Based Employee Stock Option Plan. This plan provides for the grant of stock options, shares of Common Stock and other awards valued by reference to Common Stock to employees of the Company who are not executive officers. Shares issued pursuant to the exercise of options granted under this plan may be authorized and unissued shares or treasury shares. In the event of any change in corporate capitalization, any reorganization of the Company or a similar event, shares subject to outstanding options, the exercise price of outstanding options and the number and type of shares remaining

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to be made subject to options under this plan may be adjusted or substituted for, as the Compensation Committee or Board may determine. The terms and conditions of options granted under this plan are to be determined by the Compensation Committee, provided, that the exercise price of an option may not be less than the fair market value of the shares covered thereby on the date of grant. Each option granted under this plan will become immediately exercisable upon a “change-of-control transaction” (as defined in the plan). Unless otherwise determined by the Compensation Committee, following termination of employment, options granted under this plan generally will remain exercisable, to the extent exercisable at the time of termination, for one year (two years, in the case of retirement, death or disability).

     1997 Employee Stock Plan. This plan provides for the grant of awards of stock options, stock appreciation rights (payable in cash or shares or a combination thereof) and restricted stock to employees of the Company and its affiliates. Shares issued pursuant to awards granted under this plan may be authorized and unissued shares or treasury shares. In the event of any change in corporate capitalization, any reorganization of the Company or a similar event, shares subject to outstanding awards, the exercise price of outstanding options and the number and type of shares remaining to be made subject to awards under this plan may be adjusted or substituted for, as the Compensation Committee or Board may determine. The terms and conditions of awards granted under this plan are to be determined by the Compensation Committee, provided, that the exercise price of an option may not be less than the fair market value of the shares covered thereby on the date of grant. Under this plan, stock appreciation rights may be granted only in tandem with an option, and will be cancelled to the extent the related option is exercised or cancelled. The vesting of restricted stock awards granted under this plan may be subject to the attainment of predetermined performance goals. Unless otherwise determined by the Compensation Committee, following termination of employment, options and stock appreciation rights granted under this plan generally will remain exercisable, to the extent exercisable at the time of termination, for one year (two years, in the case of retirement, death or disability). Unless otherwise determined by the Compensation Committee, following termination of employment for any reason, shares that are subject to restrictions under a restricted stock award will be immediately forfeited.

Employment Contracts and Termination, Severance and Change of Control Arrangements

     Each Named Executive Officer is employed by the Company pursuant to a written agreement of employment. Each such employment agreement contains covenants precluding the Named Executive Officer from competing, directly or indirectly, against the Company and/or the business unit or units for which such officer performs services during a period of time set forth in each respective employment agreement, including post-employment periods. The Compensation Committee has considered the advisability of using employment agreements and determined that under certain circumstances it is in the best interests of the Company and its stockholders insofar as, among other reasons, it allows the Company to achieve its desired goals of retaining the best possible executive talent and obtaining post-employment non-competition covenants from executive officers. During 2004, the Compensation Committee engaged an independent consultant to review the Company’s use of employment agreements and to make recommendations regarding the continued use of employment agreements. The circumstances under which employment agreements are used are discussed further in the Compensation Committee Report on Executive Compensation below.

     Mr. Silverman. Mr. Silverman was employed by the Company pursuant to an employment agreement originally entered into as of September 30, 1991 between Mr. Silverman and HFS Incorporated and amended and restated from time to time (the “Prior Silverman Agreement”). Effective July 1, 2002, Mr. Silverman and the Company entered into an Amended and Extended Employment Agreement (the “Amended Silverman Agreement”). Effective July 28, 2003, the Amended Silverman Agreement was amended as described below (the “First Amendment”). Effective August 20, 2004, the Amended Silverman Agreement was amended as described below (the “Second Amendment”) in order to, among other things, reduce Mr. Silverman’s potential post-employment compensation and condition his annual bonus on the Company’s attainment of financial performance goals relating to the Company. The Second Amendment substantially reduced Mr. Silverman’s potential severance and post-employment benefits and

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compensation opportunities and altered his annual bonus program to condition a substantial portion of potential bonus payments on Company performance goals. Effective January  21, 2005, the Amended Silverman Agreement was amended as described below (the “Third Amendment”) to clarify a provision relating to the Second Amendment.

     Pursuant to the Amended Silverman Agreement, Mr. Silverman serves the Company as its President and Chief Executive Officer and as the Chairman of the Board and the Chairman of the Executive Committee of the Board; however, during 2004, Mr. Nelson assumed the position of President. The term of employment under the Amended Silverman Agreement expires on December 31, 2007, subject to earlier termination upon certain events.

     The Amended Silverman Agreement provides Mr. Silverman with a base salary of $3,300,000. Mr. Silverman has not received a salary increase since July 2002.

     Pursuant to the Amended Silverman Agreement, prior to the Second Amendment, Mr. Silverman’s bonus was 0.60% of the Company’s pre-tax income as defined in the Amended Silverman Agreement, with a limit on the bonus amount equal to $100,000 per each cent of the Company’s earnings per share as defined in the Amended Silverman Agreement (“Target Bonus”). For 2004 and later years, in connection with the Second Amendment, the Target Bonus continues to apply, except that the value payable in respect of the Target Bonus is comprised of two components: (i) the Target Bonus but subject to a limit of 150% of Mr. Silverman’s base salary (the “Capped Bonus”) plus (ii) the remainder of the value that would have otherwise been payable in respect of the Target Bonus (the “Performance Based Bonus”), but which is now subject to the Company’s attainment of performance goals relating to the Company’s Average Growth in Adjusted Diluted Earnings Per Share (“AGEPS”) as defined in the Second Amendment. The Performance Based Bonus will not be paid if AGEPS is less than 8% and will be paid at 100% if AGEPS equals 13% or greater. Interim levels of payment will be made for interim levels of AGEPS performance. To the extent the Performance Based Bonus is paid at less than 100% in 2004, 2005 and 2006, such amounts not earned will be carried over into future fiscal years and may be subsequently earned by Mr. Silverman if in any such future year the Company attains an annualized rate of AGEPS of 13% or greater over any multi-year period. For 2004, the Capped Bonus will equal $4,950,000 and the Performance Based Bonus will equal $10,331,508.

     The Amended Silverman Agreement provides Mr. Silverman with specified benefits and perquisites no less favorable than those provided to other senior officers of the Company and no less favorable than those provided to chief executive officers of comparable public companies, including priority business use of corporate aircraft, personal use of corporate aircraft subject to availability, and access to car service. The Amended Silverman Agreement also provides Mr. Silverman with standard corporate indemnification rights.

     Prior to the First Amendment, the Amended Silverman Agreement required the Company to provide Mr. Silverman with term life insurance with a face amount of $100 million for the remainder of his life, subject to earlier termination upon certain events. During 2003, pursuant to the First Amendment, the Amended Silverman Agreement was amended in order to implement a replacement life insurance program, which meets both the requirements of the Amended Silverman Agreement and certain provisions of the Sarbanes-Oxley Act of 2002.

     Although the Prior Silverman Agreement required the Company to provide Mr. Silverman with annual option grants covering two million shares of Common Stock, this provision was eliminated from the Amended Silverman Agreement. Accordingly, Mr. Silverman has not received any option or other equity awards during 2002, 2003 and 2004, and he will not receive a grant during 2005. Although the Company and the Compensation Committee consider it crucial to compensate officers with equity incentives in order to align officer interests with those of stockholders, the Company and the Compensation Committee determined that Mr. Silverman’s interests were already closely aligned with stockholders by virtue of his significant holdings of Common Stock and options to acquire Common Stock.

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     The Amended Silverman Agreement, prior to the Second Amendment, provided that if Mr. Silverman resigns his employment for Good Reason (as defined in the Amended Silverman Agreement) or if he is terminated by the Company without Cause (as defined in the Amended Silverman Agreement), he will be entitled to receive a lump sum cash payment equal to (i) the sum of his then current base salary plus target bonus, multiplied by (ii) the greater of the number of years and partial years remaining in the term of employment under the Amended Silverman Agreement and 2.99. Pursuant to the Second Amendment, such potential severance payment is reduced to (i) the sum of his current base plus target bonus, multiplied by (ii) the number of years and partial years remaining in the term of employment, but in no event greater than 2.99. Further, such amount will be reduced by a present value factor of 5% to reflect the time value of money in receiving base salary and bonus amounts in a lump sum at an earlier date. Mr. Silverman will also receive a pro rata portion of his annual bonus in respect of the fiscal year in which such termination occurs. In addition, Mr. Silverman (and his eligible dependents) will be entitled to continued health and welfare benefits during the remaining term of employment (or a 3-year period, if longer) and the vesting of any options and restricted stock. However, the Company may remove Mr. Silverman from his position of Chief Executive Officer (but not Chairman of the Board) without triggering such termination provisions.

     The Amended Silverman Agreement, prior to the Second Amendment, provided that if Mr. Silverman’s employment with the Company is terminated other than due to death or for Cause (but including a resignation for Good Reason), the Company would (i) provide him certain benefits for life, including medical and welfare benefits, office and clerical support, access to corporate aircraft on terms applicable to senior executives of the Company, access to a car and driver, appropriate security when traveling on Company business, and reimbursement of any properly documented business expenses (the “Post Term Benefits”); and (ii) maintain Mr. Silverman as an employee to provide such services as requested by any successor chief executive officer and keep himself reasonably available to the Company to render advice or to provide services for the rest of his life, for no more than 90 days per year, in return for which he would be paid $83,000 per month (the “Post Term Consulting Services”). In connection with the Second Amendment, the term of the Post Term Consulting Services was reduced to a period of five years. The Company’s obligation to provide Mr. Silverman with compensation and benefits pursuant to the Post Term Consulting Services will terminate in the event Mr. Silverman becomes unable or is unwilling to provide consulting services, or in the event Mr. Silverman is convicted of a felony or violates any restrictive covenants set forth in the Amended Silverman Agreement. In addition, the Company maintains the right to terminate the Post Term Consulting Services and the compensation and benefits payable thereunder by providing Mr. Silverman a lump sum cash payment equal to the net present value of such compensation and benefits. Further, in the event of an actual or potential change of control of the Company, Mr. Silverman may elect to terminate the Post Term Consulting Services and receive such lump sum cash payment.

     The Amended Silverman Agreement further provides that Mr. Silverman will be made whole on an after-tax basis with respect to certain excise taxes in connection with a change of control of the Company which may, in certain cases, be imposed upon payments thereunder and under other compensation and benefit arrangements.

     The Amended Silverman Agreement provides that Mr. Silverman will be restricted from engaging in certain competitive activities against the Company. Such non-competition covenants will remain in effect in no event for less than two years following his termination of employment for Cause or his resignation, and, in connection with the Third Amendment, will remain in effect for so long as Mr. Silverman is receiving the Post Term Benefits (i.e., Mr. Silverman may not compete against the Company, for the rest of his life, as long as he is receiving the Post Term Benefits).

     Mr. Nelson. The Company entered into an employment agreement with Mr. Nelson as of April 14, 2003 (the “Nelson Employment Agreement”). The Nelson Employment Agreement has a three-year term with automatic one-year extensions on each anniversary of the effective date. Such extensions occur unless either party provides written notice to the other party at least thirty days prior to any such anniversary. The Nelson Employment Agreement is subject to earlier termination upon certain events.

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     The Nelson Employment Agreement provides that during his term of employment, Mr. Nelson will be paid an annual base salary equal to $762,500 and will be eligible for annual bonuses based on a target of 200% of annual base salary. Mr. Nelson is eligible to participate in all of the Company’s other compensation and employee benefit plans or programs and to receive officer perquisites. The Nelson Employment Agreement provided Mr. Nelson with an initial award of one million options with an exercise price equal to the fair market value of Company common stock as of the date of grant and further provides for annual awards, subject to the approval of the Compensation Committee, which are not less favorable than awards provided to other direct reports of the Chief Executive Officer and with targeted value equal to $1.5 million. The Nelson Employment Agreement also provided Mr. Nelson with relocation benefits covering all of his incurred costs with respect to the relocation of his primary residence, including for taxes relating to relocation expense reimbursements.

     The Nelson Employment Agreement provides that if Mr. Nelson’s employment is terminated by the Company other than for Cause (as defined in the Nelson Employment Agreement) or by Mr. Nelson for Constructive Discharge (as defined in the Nelson Employment Agreement), the Company will pay Mr. Nelson a lump sum cash payment equal to 299% of his base salary plus target incentive bonus. In addition, each of Mr. Nelson’s outstanding options (and any other outstanding equity awards) will become fully vested and such options remain exercisable until the first to occur of the third anniversary of the date of such termination and the original expiration date of such option. In addition, Mr. Nelson will receive health benefits for a period of three years at the employee rate. In addition, if such termination occurs either within the first three years of his employment, or within one year of a Change-of-Control Transaction (as defined in the Nelson Employment Agreement), the Company will reimburse Mr. Nelson for all relocation expenses incurred should he relocate his primary residence back to West Coast.

     Mr. Sheehan. The Company entered into an amended and extended employment agreement with Mr. Sheehan as of April 1, 2003 (the “Sheehan Employment Agreement”). The Sheehan Employment Agreement is set to expire on May 30, 2006, subject to earlier termination or extension upon certain events.

     The Sheehan Employment Agreement provides that during his term of employment, Mr. Sheehan will be paid an annual base salary equal to $762,500 and will be eligible for annual bonuses based on a target of 200% of annual base salary. Mr. Sheehan is eligible to participate in all of the Company’s other compensation and employee benefit plans or programs and to receive officer perquisites. The Sheehan Employment Agreement provides that if Mr. Sheehan’s employment is terminated by the Company other than for Cause (as defined in the Sheehan Employment Agreement) or by Mr. Sheehan for Constructive Discharge (as defined in the Sheehan Employment Agreement), the Company will pay Mr. Sheehan a lump sum cash payment equal to 300% of his base salary plus target incentive bonus (for purposes of such severance formula, target bonus will not exceed 100% of base salary). In addition, each of Mr. Sheehan’s outstanding options granted on March 1, 2001 or on or after April 1, 2003 will become fully vested and remain exercisable until the first to occur of the third anniversary of the date of such termination and the original expiration date of such option, and each option granted after March 1, 2001 and prior to April 1, 2003 will become fully vested and remain exercisable until the first to occur of the second anniversary of the date of such termination and the original expiration date of such option. Mr. Sheehan is eligible for post-retirement medical benefits in connection with his prior service with an acquired company.

     Mr. Smith. The Company entered into an amended and restated employment agreement with Mr. Smith as of June 2, 2001, which was further amended and restated as of June 30, 2004 (the “Smith Employment Agreement”). The Smith Employment Agreement has a two year term but with automatic one-year extensions on each anniversary of the effective date. Such extensions occur unless either party provides written notice to the other party at least thirty days prior to any such anniversary. The Smith Employment Agreement is subject to earlier termination upon certain events.

     The Smith Employment Agreement provides that during his term of employment, Mr. Smith will be paid an annual base salary equal to $762,500 and will be eligible for annual bonuses based on a target of 200% of annual base salary. This level of base salary was not increased during 2003 or 2004 and is not

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expected to increase during 2005. Mr. Smith is eligible to participate in all of the Company’s other compensation and employee benefit plans or programs and to receive officer perquisites. The Smith Employment Agreement provides that if Mr. Smith’s employment is terminated by the Company other than for Cause (as defined in the Smith Employment Agreement) or by Mr. Smith for Constructive Discharge (as defined in the Smith Employment Agreement), the Company will pay Mr. Smith a lump sum cash payment equal to 300% of his base salary plus target incentive bonus (for purposes of such severance formula, target bonus will not exceed 100% of base salary). In addition, each of Mr. Smith’s outstanding options granted after June 1, 2001 will become fully vested and remain exercisable until the first to occur of the fifth anniversary of the date of such termination and the original expiration date of such option. In addition, Mr. Smith and his eligible dependents will remain covered under certain welfare benefit plans sponsored by the Company until Mr. Smith reaches age 75 (such benefit plan eligibility will cease if Mr. Smith accepts employment with a competitor of the Company’s Real Estate Franchise and Operations Division). Further upon any such termination of employment or upon Mr. Smith’s resignation, each of his options granted on or after September 1, 1998 and prior to December 31, 2000 will remain outstanding until the first to occur of the fifth anniversary of the date of such termination and the original expiration date of such option.

     Mr. Katz. The Company entered into an amended and restated employment agreement with Mr. Katz as of June 5, 2000, which was further amended and restated as of October 1, 2003 (the “Katz Employment Agreement”). The Katz Employment Agreement is set to expire on December 31, 2005, subject to earlier termination or extension upon certain events.

     Effective for 2002, the Company increased Mr. Katz’ base salary to $762,500. This level of base salary was not increased during 2003 or 2004 and is not expected to increase during 2005. The Katz Employment Agreement provides that Mr. Katz will be eligible for annual bonuses based on a target of 200% of annual base salary. Mr. Katz is eligible to participate in all of the Company’s other compensation and employee benefit plans or programs and to receive officer perquisites. The Katz Employment Agreement provides that if Mr. Katz’ employment is terminated by the Company other than for Cause (as defined in the Katz Employment Agreement) or by Mr. Katz for Constructive Discharge (as defined in the Katz Employment Agreement), the Company will pay Mr. Katz a lump sum cash payment equal to 300% of his base salary plus target incentive bonus (for purposes of such severance formula, target bonus will not exceed 100% of base salary). In addition, each of Mr. Katz’ outstanding options granted after June 5, 2000 will become fully vested and remain exercisable until the first to occur of the third anniversary of his termination of employment and the original expiration date of such option. In addition, restricted stock units granted during 2003 will accelerate.

     Other Agreements. During 2003, each Named Executive Officer (other than Mr. Silverman) executed a letter agreement amending and clarifying certain terms of their employment with the Company and amending their respective employment agreements. Each letter agreement provided the Company with the officer’s consent to terminate the officer’s existing split dollar life insurance arrangement and provided the Company the right to recoup the policy value, capped the amount of annual bonus that would be considered in calculating an officer’s contractual severance pay (100% of earned base salary), and limited and clarified the types of benefits that would be provided pursuant to a contractual severance event. The Company determined that these amendments were necessary and appropriate and, in connection with the officers’ agreement with these charges, the Company amended its annual bonus program for the Named Executive Officers (other than Mr. Silverman) to increase the bonus target to 200% of earned base salary. The changes to the annual bonus program included a shift to clear, performance-based criteria relating to the officer’s business units, the Company on the whole, capital expenditure efficiency and personal performance measures. The Company views the changes as beneficial to the Company and more in line with stockholder interests.

     Officer Stock Ownership Guidelines. During 2003, the Corporate Governance Committee recommended, and the Board of Directors approved, stock ownership guidelines requiring senior officers of the Company to acquire designated levels of Common Stock over a four year period and hold such Common Stock during all periods thereafter. The value of the Common Stock required to be held relates to a factor

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of the designated officer’s base salary and position. Effective October 15, 2007 (or, for officers hired subsequent to such date, effective on the fourth anniversary of their hire date), the Chief Executive Officer will be required to hold Common Stock equal to 600% of his or her then current annual rate of base salary; each designated officer reporting to the Chief Executive Officer will be required to hold Common Stock equal to 300% of his or her then current annual rate of base salary; and each designated Corporate Executive Vice President and each Business Unit Chief Executive Officer will be required to hold Common Stock equal to 200% of his or her then current annual rate of base salary.

Other Change of Control and Termination Provisions. In connection with the merger of HFS Incorporated and CUC International Inc., action was taken by the Company to provide that any employee formerly with HFS Incorporated who incurred a golden parachute excise tax under Section 4999 of the Internal Revenue Code, if and to the extent applicable, because of the vesting of options granted prior to such merger, would be reimbursed by the Company for the economic costs incurred by such employee, including a tax gross-up payment to account for any additional golden parachute excise tax incurred by reason of such reimbursement to the Named Executive Officers, if any. In addition, the Company adopted a tax gross up program for a limited number of executive officers, including each Named Executive Officer, which provides for similar excise tax reimbursements in the event a future corporate event causes an excise tax liability. Certain Named Executive Officers also have similar protections under their employment agreements.

Stock Options and Restricted Stock Units. Generally, all stock options granted to each of the Named Executive Officers under any applicable stock plan of the Company will become fully and immediately vested and exercisable, and all restricted stock units will vest, upon the occurrence of a change of control transaction of the Company.

Notwithstanding anything to the contrary set forth in any of the Company’s previous filings under the Securities Act of 1933 or the Securities Exchange Act of 1934 that might incorporate future filings, including this proxy statement, in whole or in part, the following compensation committee report on executive compensation and performance graph shall not be incorporated by reference into any such filings.

Compensation Committee Report on Executive Compensation

     The Compensation Committee of the Board of Directors is responsible for administering the Company’s executive compensation policies and programs. The Compensation Committee also reviews and approves the salaries and bonuses of executive officers and certain other officers as well as all grants of long term incentive and equity-based compensation awards to all employees.

     Executive Officer Compensation Policy. The Company’s executive officer compensation policies include:

     Committee Charter. In an effort to enhance corporate governance and clarify the role of the Compensation Committee with respect to carrying out the foregoing policies, the Board of Directors adopted a Charter of the Compensation Committee (the “Charter”) in February 2003. The Charter provides that the Compensation Committee must consist of directors who are independent of management and free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of their independent judgment as a Compensation Committee member, as well as independent as defined under various rules and regulations applicable to compensation committees. The Charter expressly provides that the Compensation Committee shall, among other things, evaluate its own performance on an annual basis.

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     Access to Senior Management. The members of the Compensation Committee have direct access to appropriate members of senior management, and this access is used for discussions regarding proposed compensation arrangements, plans and policies to assure that decisions regarding executive officer compensation are appropriate. The Compensation Committee believes that its direct access to senior management has improved its effectiveness and has led to the adoption of policies and initiatives which have increased the alignment of key employees and stockholders, including the implementation of performance-based vesting with respect to long term incentive awards discussed below.

     Compensation Levels Generally and Culture. The Compensation Committee recognizes that the compensation levels for the Named Executive Officers are at a level which may be above the averages of the Company’s peer competitors. However, the Committee also recognizes that above-average compensation levels serve the interests of the Company and its stockholders by attracting and retaining the highest caliber of management talent and by promoting a culture of energy, entrepreneurialism, competitiveness and dedication, which in turn facilitates the attainment of annual growth and profitability targets. The Compensation Committee believes that management talent has been and will continue to be a competitive advantage for the Company. The Compensation Committee also acknowledges that senior management tries to maintain and enhance a performance-based culture among its employees, and the Compensation Committee gives appropriate consideration to this strategic policy when performing its duties.

     Employment Agreements. Each Named Executive Officer is employed by the Company pursuant to a written agreement of employment. Each employment agreement separately reflects the terms that the Compensation Committee believed was appropriate and/or necessary to retain the services of the particular executive officer, within the framework of the Company’s compensation policies. A limited number of other executive officers of the Company are also employed pursuant to employment agreements. Substantially all employment agreements entered into by the Company provide the Company with protection in the form of restrictive covenants, including non-competition, non-solicitation and confidentiality covenants, for the benefit of the Company. The Compensation Committee has considered the advisability of using employment agreements and determined that under certain circumstances it is in the best interests of the Company insofar as it permits the Company to achieve its desired goals of retaining the best possible executive talent and obtaining post employment non-competition covenants from executive officers. During 2004, the Committee engaged a compensation consultant to review the Company’s use of employment agreements. The Committee was comfortable with the results of this review, but also determined to ensure that the future use of employment agreements would be subject to increased scrutiny. In all cases, use of employment agreements would be limited to executive officers, and also in special situations such as to secure the services of key employees who become Company employees in connection with acquisitions, to secure restrictive covenants from key employees who have the ability to become competitive threats to the Company, or to retain key employees during transition periods in connection with their termination of employment so that replacement personnel may transition in an orderly manner. The employment agreements with the Named Executive Officers are described more fully under “Employment Contracts and Termination, Severance and Change of Control Arrangements”.

     Components of Executive Compensation. The material elements of executive compensation arrangements include base salary, annual profit-sharing bonus and long term equity incentive awards.

     Base Salaries. The Compensation Committee is responsible for determining the salary of the Chief Executive Officer and the other senior executive officers, which includes approval of their employment agreements containing the terms of their compensation. Salaries paid to executive officers, other than the Chief Executive Officer, are also reviewed annually by the Chief Executive Officer and the Executive Vice President — Human Resources. The Compensation Committee and such officers assess salary levels based upon the nature of the position and the contribution, experience and tenure of the executive officer and based upon economic factors, peer company data and personal achievements. The salary levels of the Named Executive Officers are subject to the provisions of their respective employment agreements, which are approved by the Compensation Committee. From time to time, the Compensation Committee and the Company perform market research and/or engage compensation consultants to advise on market rates of compensation for similarly situated executive officers. The Compensation Committee considers such advice

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and surveys in connection with establishing salaries for executive officers. For 2003 and 2004, the Compensation Committee determined to freeze the base salaries of the Named Executive Officers at 2002 levels. For 2005, the Compensation Committee determined to continue this salary freeze.

     Annual Bonus. Mr. Silverman is entitled to an annual performance bonus based upon the terms of his employment agreement. In 2002, Mr. Silverman entered into the Amended Silverman Agreement which provided a bonus formula calculated as 0.60% of the Company’s pre-tax income as defined in the Amended Silverman Agreement, with a limit on the amount of bonus equal to $100,000 per each cent of the Company’s earnings per share. During 2004, Mr. Silverman and the Company agreed to amend Mr. Silverman’s bonus formula in connection with the settlement of a stockholder derivative action. Although the formula described above remains in effect, all amounts above 150% of Mr. Silverman’s earned base salary are subject to the Company’s attainment of specific goals relating to growth in adjusted diluted earnings per share as defined in the Second Amendment. A description of Mr. Silverman’s employment agreement and amendments thereto related to the settlement are described under “Employment Contracts and Termination, Severance and Change of Control Arrangements.”

     Each other Named Executive Officer is entitled to an annual performance bonus based upon the terms of their respective employment agreements, with bonus targets equal to 200% of earned base salary in the applicable fiscal year. Such bonus payments are subject to the approval of the Compensation Committee and based upon the performance of the Company and/or the applicable business units being managed by the officer, as well as such other performance criteria determined by the Company in connection with its overall strategic plans. Performance is measured against pre-established performance goals and the officer’s individual performance subjectively determined by the Chief Executive Officer. The performance goals are adjusted each year to coincide with overall strategy of the Company. With respect to 2004, the Compensation Committee determined to pay additional bonuses primarily because of the outstanding performance by the Company during 2004 and each officer’s increased efforts and responsibilities in executing the strategic realignment plan for the Company in 2004. The implementation of the Company’s strategic realignment plan required each officer to devote significant additional time and effort to such transactions while continuing to execute their day-to-day operational responsibilities. The bonuses paid to the Named Executive Officers for their 2004 performance are set forth under “— Summary Compensation Table.”

     Long Term Equity Incentive Awards. In 2002 and prior years, equity awards were primarily granted in the form of options to purchase shares of Company common stock. Effective January 1, 2003, the Company determined to substantially curtail the issuance of stock options and altered its eligibility policy to reduce the number of employees who received incentive awards. Accordingly, for 2003, long term equity incentive awards were granted substantially in the form of restricted stock units. In 2004, the Company further aligned the interests of employees with stockholders by conditioning the vesting of such awards on the attainment of financial performance goals relating to total shareholder returns referred to as “total unit growth” or “TUG,” rather than using solely time-based vesting. This approach is expected to continue for 2005. The Compensation Committee and senior management view this approach as the most appropriate and effective manner of meeting the critical goal of retaining key management employees while at the same time aligning the interest of employees and stockholders.

     The Compensation Committee administers each of the Company’s stock plans. Grants made in 2004 to the Named Executive Officers, and all other officers and key employees, were approved by the Compensation Committee after discussion with the Executive Vice President, Human Resources, Chief Financial Officer and Chief Executive Officer. Eligibility for stock awards, the number of shares underlying each award and the terms and conditions of each award are determined by the Compensation Committee after input from the Human Resources function, and the senior executive of each division and business unit. From time to time, the Human Resources department and/or the Compensation Committee will engage outside consultants to gain a deeper understanding of competition in local and global labor markets to assure that the grants are competitive and provide appropriate incentive and retention value.

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     Although the Prior Silverman Agreement provided Mr. Silverman with a contractual right to annual stock option grants covering two million shares of Common Stock, the Compensation Committee determined to terminate this right when the Amended Silverman Agreement was executed. Mr. Silverman did not receive an equity award in 2002, 2003 or 2004. Mr. Silverman will not receive an equity award in 2005. The Compensation Committee considers it crucial to compensate senior executives with equity incentives; however, in light of Mr. Silverman’s substantial equity interest in the Company, it was determined that Mr. Silverman’s interests were already appropriately aligned with those of the Company’s stockholders and therefore both the Compensation Committee and Mr. Silverman agreed to the elimination of the contractual annual option award.

     Addition information with respect to grants of performance-based restricted stock units in 2004 to the Named Executive Officers is set forth in the “Summary Compensation Table.” Mr. Katz elected to receive a number of performance-vesting stock options in lieu of a receiving additional restricted stock units. Information regarding his performance vesting stock options is set forth in the “Option Grants in 2004 Table.”

     Chief Executive Officer Compensation. The compensation paid to Mr. Silverman during 2004 was based upon the levels set forth in the existing employment agreement between Mr. Silverman and the Company. Mr. Silverman did not receive a base salary increase in 2004 or 2003, notwithstanding his right to an annual increase under his employment agreement. Also, Mr. Silverman did not receive an equity grant in 2002, 2003 or 2004. Mr. Silverman is not expected to receive an increase to base salary or an equity grant during 2005. Mr. Silverman’s annual bonus, which is disclosed in the Summary Compensation Table, was determined based on a formula set forth in his employment agreement (as amended to make a portion of such bonus subject to the attainment of performance goals relating to the growth of the Company’s adjusted diluted earnings per share pursuant to the settlement of a stockholder derivative action).

     Deductibility of Compensation. In accordance with Section 162(m) of the Internal Revenue Code, the deductibility for federal corporate tax purposes of compensation paid to certain individual executive officers of the Company in excess of $1 million in any year may be restricted. The Compensation Committee believes that it is in the best interests of the Company’s stockholders to comply with such tax law, while still maintaining the goals of the Company’s compensation programs. Accordingly, where it is deemed necessary and in the best interests of the Company to continue to attract and retain the best possible executive talent, and to motivate such executives to achieve the goals inherent in the Company’s business strategy, the Compensation Committee will recommend, and the Company is expected to pay, compensation to executive officers which may exceed the limits of deductibility. In this regard, certain portions of compensation paid to the Named Executive Officers will not be deductible for federal income tax purposes under Section 162(m).

COMPENSATION COMMITTEE
 
Robert F. Smith (Chair)
Myra J. Biblowit
Sheli Z. Rosenberg

Compensation Committee Interlocks and Insider Participation

     The Compensation Committee is comprised of Mr. Smith (Chairman) and Mses. Biblowit and Rosenberg, none of whom were officers or employees of the Company or any of the Company’s subsidiaries or had any relationship requiring disclosure by the Company under Item 404 of the SEC’s Regulation S-K during 2004 or before.

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Performance Graph

     The following graph assumes $100 invested on December 31, 1999 and compares (a) the yearly percentage change in the Company’s cumulative total stockholder return on the Common Stock (as measured by dividing (i) the sum of (A) the cumulative amount of dividends, assuming dividend reinvestment, during the five years commencing on the last trading day before January 1, 2000, and ending on December 31, 2004, and (B) the difference between the Company’s share price at the end and the beginning of the periods presented by (ii) the share price at the beginning of the periods presented) with (b) (i) the Standard & Poor’s 500 Index and (ii) the Standard & Poor’s Diversified Commercial Services Index.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
AMONG CENDANT CORPORATION, THE S & P 500 INDEX
AND THE S & P DIVERSIFIED COMMERCIAL SERVICES INDEX

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Report of Audit Committee

     The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls. The independent auditors are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted accounting principles and issuing a report thereon. The Committee reviews and oversees these processes, including oversight of (i) the integrity of the Company’s financial statements, (ii) the Company’s independent auditors’ qualifications and independence, (iii) the performance of the Company’s independent auditors and the Company’s internal audit function and (iv) the Company’s compliance with legal and regulatory requirements.

     In this context, the Committee met and held discussions with management and the independent auditors. Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States, and the Committee reviewed and discussed the consolidated financial statements with management and the independent auditors. The Committee also discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards, AU 380), as amended.

     In addition, the Committee discussed with the independent auditors the auditors’ independence from the Company and its management, and the independent auditors provided to the Committee the written disclosures and letter required from the independent auditors by the Independence Standards Board Standard No. 1 (Independence Discussions With Audit Committees).

     The Committee discussed with the Company’s internal and independent auditors the overall scope and plans for their respective audits. The Committee met with the internal and independent auditors, with and without management present, to discuss the results of their examinations, the evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting.

     Based on the reviews and discussions referred to above, the Committee recommended to the Board of Directors, and the Board has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 for filing with the SEC. The Committee and the Board also have recommended, subject to stockholder ratification, the selection of the Company’s independent auditors for fiscal year 2005.

AUDIT COMMITTEE
 
Pauline D.E. Richards, Chairman
Robert F. Smith
Cheryl D. Mills
Sheli Z. Rosenberg

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PROPOSALS TO BE VOTED ON AT MEETING

ELECTION OF DIRECTORS
[PROPOSAL NO. 1]

     The Board of Directors has nominated Messrs. Coleman, Mulroney, Nederlander, Nelson, Pittman and Smith and Mses. Biblowit, Mills, Richards and Rosenberg to be elected at the Meeting to serve as Directors for a one-year term ending at the 2006 annual meeting of stockholders and until their successors are duly elected and qualified. All nominees are currently Directors of the Company. The terms of the remaining Directors expire at the Company’s annual meeting of stockholders to be held in 2006. For certain information regarding each nominee and continuing Directors, see “Board of Directors — Biographical Information for Nominees and Continuing Directors” above.

     Each nominee has consented to being named in this Proxy Statement and to serve if elected. If, prior to the Meeting, any nominee should become unavailable to serve, the shares of Common Stock represented by a properly executed and returned proxy (whether through the return of the enclosed proxy card, by telephone or electronically through the Internet) will be voted for such additional person as shall be designated by the Board of Directors, unless the Board of Directors determines to reduce the number of Directors in accordance with the Company’s Amended and Restated Certificate of Incorporation and By-Laws.

     Directors shall be elected by the affirmative vote of a plurality of the shares of Common Stock present at the Meetings, in person or by proxy, and entitled to vote in the election of Directors. Pursuant to applicable Delaware law, in determining whether such nominees have received the requisite number of affirmative votes, abstentions and broker non-votes will have no effect on the outcome of the vote.

     THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH NOMINEE AS A DIRECTOR. UNLESS MARKED TO THE CONTRARY, PROXIES RECEIVED BY THE COMPANY WILL BE VOTED “FOR” THE ELECTION OF THE TEN NOMINEES LISTED ABOVE.

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RATIFICATION OF APPOINTMENT OF AUDITORS
[PROPOSAL NO. 2]

     Deloitte & Touche LLP has been appointed by the Board of Directors as the auditors for the Company’s financial statements for 2005. A representative of Deloitte & Touche LLP is expected to be present at the Meeting and will have the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions of stockholders.

     Principal Accounting Firm Fees. Fees billed to the Company by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, the “Deloitte Entities”) for the years ended December 31, 2004 and 2003 were as follows:

     Audit Fees. The aggregate fees billed for the audit of the Company’s annual financial statements for the fiscal years ended December 31, 2004 and 2003 and for the reviews of the financial statements included in the Company’s Quarterly Reports on Form 10-Q and for other attest services primarily related to financial accounting consultations, comfort letters and consents related to SEC and other registration statements, regulatory and statutory audits and agreed-upon procedures were $19.9 million and $14.4 million, respectively.

     Audit-Related Fees. The aggregate fees billed for audit-related services for the fiscal years ended December 31, 2004 and 2003 were $9.9 million and $6.9 million, respectively. These fees relate primarily to due diligence pertaining to acquisitions, audits for dispositions of subsidiaries and related registration statements, audits of employee benefit plans and accounting consultation for contemplated transactions for the fiscal years ended December 31, 2004 and December 31, 2003.

     Tax Fees. The aggregate fees billed for tax services for the fiscal years ended December 31, 2004 and 2003 were $10.4 million and $8.1 million, respectively. These fees relate to tax compliance, tax advice and tax planning for the fiscal years ended December 31, 2004 and December 31, 2003.

     All Other Fees. The aggregate fees for services not included above for the fiscal year ended December 31, 2003 were $0.6 million. There were no other fees for the fiscal year ended December 31, 2004. The fees in 2003 relate to services to improve business and operational processes.

     The Audit Committee considered the non-audit services provided by the Deloitte Entities and determined that the provision of such services was compatible with maintaining the Deloitte Entities’ independence. The Audit Committee also adopted a policy prohibiting the Company from hiring the Deloitte Entities’ personnel at the manager or partner level who have been directly involved in performing auditing procedures or providing accounting advice to the Company.

     The Company’s Audit Committee is responsible for appointing the Company’s independent auditor and approving the terms of the independent auditor’s services. The Audit Committee has established a policy for the pre-approval of all audit and permissible non-audit services to be provided by the independent auditor, as described below.

     All services performed by the independent auditor in 2004 were pre-approved in accordance with the pre-approval policy and procedures adopted by the Audit Committee at its April 16, 2003 meeting and amended at the October 15, 2003 meeting. This policy describes the permitted audit, audit-related, tax and other services (collectively, the “Disclosure Categories”) that the independent auditor may perform. The policy requires that prior to the beginning of each fiscal year, a description of the services (the “Service List”) anticipated to be performed by the independent auditor in each of the Disclosure Categories in the ensuing fiscal year be presented to the Audit Committee for approval.

     Any requests for audit, audit-related, tax and other services not contemplated by the Service List must be submitted to the Audit Committee for specific pre-approval, irrespective of the amount, and cannot commence until such approval has been granted. Normally, pre-approval is provided at regularly scheduled meetings of the Audit Committee. However, the authority to grant specific pre-approval between meetings, as necessary, has been delegated to the Chairman of the Audit Committee. The

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Chairman will update the full Audit Committee at the next regularly scheduled meeting for any interim approvals granted.

     On a quarterly basis, the Audit Committee reviews the status of services and fees incurred year-to-date as compared to the original Service List and the forecast of remaining services and fees for the fiscal year.

     The policy contains a de minimis provision that operates to provide retroactive approval for permissible non-audit services under certain circumstances. No services were provided by the Deloitte Entities during 2004 and 2003 under such provision.

     Although stockholder action on this matter is not required, the appointment of Deloitte & Touche LLP is being recommended to the stockholders for ratification. Pursuant to applicable Delaware law, the ratification of the appointment of auditors of the Company requires the affirmative vote of the holders of a majority of the shares of Common Stock present, in person or by proxy, and entitled to vote at the Meeting. Abstentions and broker non-votes will be counted and will have the same effect as a vote against this proposal.

     THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL.

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APPROVAL OF THE CENDANT AMENDED AND RESTATED 1999 NON-EMPLOYEE DIRECTORS DEFERRED COMPENSATION PLAN
[PROPOSAL NO. 3]

General

     The Cendant 1999 Non-Employee Directors Deferred Compensation Plan (the “Director Plan”) was adopted and approved by the Board on May 10, 1999. The Director Plan, as amended and restated, was adopted and approved by the Board as of January 22, 2005, subject to approval by stockholders. The Director Plan has been amended and restated in order to (i) comply with recently adopted IRS regulations relating to the deferral of compensation and (ii) increase the number of shares available for issuance thereunder. Accordingly, in order to increase the number of shares available for issuance under the Director Plan, the Director Plan is being submitted to stockholders for approval in accordance with New York Stock Exchange rules.

     If the Director Plan is not approved by stockholders, it will remain in effect, as amended and restated as of January 22, 2005, with respect to previously deferred amounts, except that the number of shares available for issuance under the Director Plan will not exceed 80,000 and no further non-employee director fees will be deferred under the Director Plan. If stockholders approve the Director Plan, the number of shares available for issuance will be increased to 500,000, and additional non-employee director retainer fees earned by non-employee directors will be deferred under the Director Plan in the form of Cendant deferred common stock units, as described below.

     From time to time, Cendant approves the payment of retainer fees to its non-employee directors but requires non-employee directors to defer the receipt of such retainer fees until following their separation from service from the Board of Directors. The purpose of the Director Plan is to align the interests of non-employee directors of Cendant with the interests of Cendant stockholders by requiring and/or permitting non-employee directors to defer such retainer fees in the form of Cendant stock equivalent units. Currently, 50% of all non-employee director retainer fees are required to be deferred pursuant to the Director Plan, and non-employee directors may, but are not required to, defer the remaining 50% of such retainer fees into the Director Plan. Currently, non-employee director fees are paid on a quarterly basis. See “BOARD OF DIRECTORS — Director Compensation.”

     All amounts deferred under the Director Plan are converted into Cendant common stock equivalents, or deferred stock units, which are not actual shares of common stock. Holders of deferred stock units have no rights associated with the ownership of Cendant common stock. Rather, each deferred stock unit represents the right to receive one share of Cendant common stock at the time of distribution.

     Retainer fees (and other fees determined by Cendant to be required and/or permitted to be deferred from time to time) are converted into deferred stock units upon the applicable allocation date. The number of units credited to any non-employee director’s account equals the amount of the fees being deferred, divided by the fair market value per share of Cendant common stock as of the allocation date. Fair market value is the closing price per share of Cendant common stock, or such other reasonable value determined by the Committee. The allocation date is the date the non-employee director would otherwise be paid a retainer or other applicable fee but for the deferral.

     The Director Plan provides that all amounts deferred will not be distributed to non-employee directors until the date which is seven months following their separation from service from the Board of Directors, and that such amounts may not be distributed prior to or following such date under any circumstances. Such distributions will be made in the form of Cendant common stock.

     Currently, each of Cendant’s non-employee directors has deferred retainer fees into the Director Plan.

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Description of the Director Plan

     The following summary describes the Director Plan as submitted to stockholders for approval by this Proposal. The summary is qualified in its entirety by reference to the text of the Director Plan, the text of which is set forth in Annex C to this Proxy Statement.

Purpose

     The purpose of the Director Plan is to align the interests of non-employee directors of Cendant with the interests of Cendant stockholders by requiring and/or permitting such directors to defer retainer fees and other applicable fees in the form of Cendant common stock equivalents.

Administration

     The Plan will be administered by the Compensation Committee of the Board of Directors, or such other committee of the Board of Directors determined by the Board of Directors (the “Committee”).

Eligibility

     In accordance with current Company policy regarding the compensation of non-employee directors, each non-employee director of the Company is required to participate in the Director Plan with respect to mandatory deferrals of retainer fees, and is eligible to participate in the Director Plan with respect to elective deferrals of retainer fees and other applicable fees.

Benefits Under the Director Plan

     The Director Plan provides for the deferral of retainer fees (and other applicable fees) determined to be paid to non-employee directors in consideration of their services to the Company from time to time. In accordance with current Company policy regarding the compensation of non-employee directors, a portion of all retainer fees paid to non-employee directors are required to be deferred under the Director Plan, and remaining retainer fees and other applicable fees may, upon election, be deferred under the Director Plan. All fees deferred into the Director Plan are converted into Cendant common stock equivalents, or deferred stock units, which are not actual shares. Each deferred stock unit represents the right to receive one share of Cendant common stock at the time of distribution. Amounts deferred under the Director Plan are converted into deferred stock units upon the applicable allocation date. The number of units credited to the non-employee director’s account equals the amount of the fees being deferred, divided by the fair market value per share of Cendant common stock as of the allocation date. The allocation date is the date the non-employee director would otherwise be paid a retainer or other applicable fee but for the deferral.

Dividends

     In the event of a dividend or distribution paid in respect of Company common stock, each non-employee director will be credited with a number of additional deferred stock units equal to the per share amount of the dividend or distribution, multiplied by the number of deferred stock units held as of the record date for such dividend or distribution, divided by the fair market value of a share of Cendant common stock on the payment date of such dividend or distribution. Such additional units will be credited at the next allocation date following the record date.

Rights Attaching to the Shares

     Non-employee directors will not have any rights as a stockholder with respect to deferred stock units.

New Plan Benefits

     Benefits under the Director Plan are not determinable because the Director Plan only provides for deferral opportunities, and actual non-employee director fees are determined by the Corporate Governance Committee and the Board. The Company’s non-employee directors are required to defer at least a portion

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of their fees into deferred stock units under the Director Plan, as described under “BOARD OF DIRECTORS — Director Compensation.”

Income Tax Consequences

     The following discussion addresses only the general Income Tax consequences of awards made under the Director Plan. It is not intended as tax advice to participants under the Director Plan, who should consult their own tax advisors.

     Non-employee directors will not incur taxable income (and the Company will not be entitled to any tax deduction) in respect of retainer fees that are validly deferred into the Director Plan. Upon the distribution of actual shares of Cendant common stock following separation from service as a director of the Company, the non-employee director will incur ordinary income (and the Company will be entitled to a tax deduction) equal to the fair market value of the distributed shares.

Approval of the Plan

     Approval of the Director Plan will require the affirmative vote of a majority of the shares of Common Stock present or represented by proxy and entitled to vote at the Meeting. Under applicable Delaware law, in determining whether such proposal has received the requisite number of affirmative votes, abstentions and broker non-votes will be counted and will have the same effect as a vote against this proposal.

     THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL.

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APPROVAL OF THE CENDANT 2005 UK SHARE INCENTIVE PLAN
(EMPLOYEE STOCK PURCHASE PLAN)
[PROPOSAL NO. 4]

General

     The Cendant 2005 UK Share Incentive Plan (Employee Stock Purchase Plan) (“the Plan”) was adopted by the Board on January 22, 2005, subject to approval by stockholders. The Plan is designed to encourage the purchase of shares of Common Stock by eligible participants, which will give them a continuing stake in Cendant. The Plan is being submitted to stockholders for approval in accordance with New York Stock Exchange rules. If the Plan is not approved by the stockholders, it will not be implemented and no shares of Common Stock will be issued thereunder. Subject to stockholder approval, a maximum of 500,000 shares of Common Stock will be available for issuance under the Plan.

     Participation in this United Kingdom (“UK”) Inland Revenue approved plan will be offered to employees of Cendant’s UK companies and has been designed to provide comparable tax benefits to UK resident taxpayer employees as those offered to US taxpayer employees participating in Cendant’s 1998 Employee Stock Purchase Plan. The Plan is intended to comply with the requirements of the UK Inland Revenue and to assure the participants of the UK tax advantages provided thereby (and described below in the section entitled “UK income tax consequences”).

     Pursuant to the Plan, each eligible employee will be permitted to purchase Common Stock at fair market value (“Partnership Shares”) through regular payroll deductions on a monthly basis from their gross pay, saving income tax and social security contributions. The payroll deductions shall not exceed £1,500 in any tax year, or 10% of the participant’s salary if lower. In addition, additional stock (“Matching Shares”) will be provided to participants dependant upon the number of Partnership Shares granted. Matching Shares will be provided in the ratio of 3 Matching Shares for each 17 Partnership Shares purchased. Cendant may also direct that any cash dividend in respect of Plan shares held on behalf of Participants may be applied in acquiring further Plan shares on their behalf (“Dividend Shares”).

     Cendant estimates that there are approximately 2,600 employees who may be eligible to participate in the Plan.

     The text of the Plan is set forth in Annex D to this Proxy Statement, and the description of the Plan set forth herein is qualified in its entirety by reference to the text of the Plan.

Description of the Plan

     The following summary describes the Plan which is submitted to stockholders for approval by this Proposal.

Purpose

     The purpose of the Share Incentive Plan is to align employee and stockholder long-term interests by facilitating the purchase of Common Stock by employees to give them a continuing stake in the Cendant. The Plan will comply with the requirements of the UK Inland Revenue to obtain for participants the tax advantages provided thereby (described below in the section entitled “UK income tax consequences”).

Administration

     The Plan will be administered by the Compensation Committee, which is comprised solely of non-employee directors who are not eligible to participate in the Plan.

Eligibility

     Subject to certain procedural requirements, all current employees of Cendant’s UK companies are eligible to participate. All participants must also be UK resident taxpayers.

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Operation of the Share Incentive Plan

     The Plan Rules provide for four types of arrangement: Partnership Shares, Matching Shares, Dividend Shares and Free Shares.

     Each of these terms is explained further below, other than Free Shares which will not be offered by Cendant under the Plan.

   Partnership Shares

     Pursuant to the Plan, each eligible employee will be permitted to purchase Shares at market value through regular payroll deductions on a monthly basis from their gross pay, saving income tax and social security contributions. The participant must enter into an agreement with Cendant (a “Partnership Share Agreement”) with terms agreed to in advance with the UK Inland Revenue.

     The payroll deductions shall not exceed £1,500 in any tax year, or 10% of the participant’s salary if lower. The minimum amount to be deducted under the Partnership Share Agreement in any month is £10.

     Partnership Shares may be withdrawn from the Plan at any time, although they must be held in Trust for at least five years from the date of award in order to be fully exempt from UK income tax and social security contributions.

     The number of Shares awarded to each employee shall be determined in accordance with the Market Value on that date, using the NYSE stock price and the $US:£GB exchange rate on the Acquisition Date.

   Matching Shares

     The Participant will receive an additional 3 Matching Shares for every 17 Partnership Shares purchased. Cendant may vary this ratio at any time, but may not exceed 2 Matching Shares for every Partnership Share.

     The Matching Shares are forfeited if the Participant withdraws the Partnership Shares in respect of which the Matching Shares were awarded within one year of the date of award or ceases employment (unless he/she qualifies as a “good leaver” in accordance with the Rules of the Plan).

     Matching Shares cannot be withdrawn until 3 years after the award date. In order to be exempt from UK income tax and social security contributions, they must be held in Trust for at least five years.

   Dividend Shares

     Cendant may direct that any cash dividend in respect of Plan Shares held on behalf of Participants may be applied in acquiring further Plan Shares on their behalf. The amount applied by Trustees in acquiring Dividend Shares shall not exceed £1,500 in each Tax Year, or any other limit as amended by legislation from time to time.

     Dividend Shares must be held in Trust for at least three years from the date of award in order to be exempt from UK income tax and social security contributions. They may be withdrawn by a participant during this period, but will be subject to UK income tax and social security contributions on the value upon withdrawal.

Rights Attaching to the Shares

     All stock under the Plan, whether Partnership, Matching or Dividend Shares, will be Cendant Common Stock. While stock is held in the Plan Trust, participants will be entitled to exercise voting rights and tender rights.

     Participants are entitled to receive dividends on all Shares held under the Plan and such dividends will be reinvested into Dividend Shares (see above).

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Alteration of the Plan

     Cendant may with the Trustees’ written consent from time to time amend the Plan, although no key feature may be amended without submitting the Plan for re-approval by the UK Inland Revenue.

New Plan Benefits

     Benefits under the Plan are not determinable because they depend on the elections of the Plan participants.

UK Income Tax Consequences

     The following discussion addresses only the general UK Income Tax consequences of awards made under the Plan. It is not intended as tax advice to participants under the Plan, who should consult their own tax advisors.

     The Plan is intended to qualify as a “Share Incentive Plan” as defined in Schedule 2 of the UK Income Tax (Earnings and Pensions) Act of 2003. Assuming such qualification, a participant will not recognize any taxable income in the UK as a result of participating in the Plan, other than as described below.

     Partnership Shares must be held in Trust for at least five years from the date of award in order to be fully exempt from UK income tax and social security contributions. They may be withdrawn by a participant within three years, but will be subject to UK income tax and social security contributions on their full value at that time. If they are withdrawn by a participant after three years but before five years, the participant will pay income tax and social security contributions on the lower of the amount paid to purchase them and the value when they are withdrawn.

     Matching Shares cannot be withdrawn until 3 years after the award date. In order to be exempt from UK income tax and social security contributions, they must be held in Trust for at least five years.

     Dividend Shares must be held in Trust for at least three years from the date of award in order to be exempt from UK income tax and social security contributions. They may be withdrawn by a participant during this period, but will be subject to UK income tax and social security contributions on the value upon withdrawal.

     If Shares are sold immediately after withdrawal, they will not be subject to a Capital Gains charge in the UK. If they are sold at a later date, the value on the date of sale less the value on the date of transfer will be subject to UK Capital Gains Tax. There is an annual personal Capital Gains Tax exemption in the UK (£8,200 for the tax year 2004/05).

Approval of the Plan

     Approval of the Plan will require the affirmative vote of a majority of the shares of Common Stock be present or represented by proxy and entitled to vote at the Meeting. Under applicable Delaware law, in determining whether such proposal has received the requisite number of affirmative votes, abstentions and broker non-votes will be counted and will have the same effect as a vote against this proposal.

     THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL.

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STOCKHOLDER PROPOSAL
[PROPOSAL NO. 5]

     The Catholic Equity Fund, 1100 West Wells Street, Milwaukee, Wisconsin 53233, owner of approximately 3,200 shares of the Company’s common stock, has given notice of its intention to present the following resolution at the 2005 Annual Meeting. CHRISTUS Health, 2600 North Loop West, Houston, Texas 77092 and Congregation of the Sisters of St. Joseph, Mount Saint Joseph Convent, 9701 Germantown Avenue, Philadelphia, PA 19118, have indicated their intention to co-sponsor this proposal.

“CENDANT — COMPETITIVE PAY

     RESOLVED: The shareholders urge the Board of Directors:

     This proposal does not apply to the extent that complying would necessarily breach a compensation agreement in effect at the time of the present shareholder meeting.

     “Compensation” means salary, bonus, the grant-date present value of stock options, the grant-date present value of restricted stock, payments under long-term incentive plans, and “other annual” and “all other compensation” as those categories are defined for proxy statement purposes.

     “Non Managerial Workers” means U.S.-based employees working in the categories of Blue-Collar Occupations or Service Occupations or the Sales and Administrative Support components of White-Collar Occupations as used by the Bureau of Labor Statistics in its National Compensation Surveys.

Supporting Statement:

     Our resolution is based on these premises:

     1. Unless internally anchored, market-based compensation methods tend to produce excessive CEO compensation;

     2. Very high CEO pay should require shareholder approval since it tends to produce sub par share performance long-term; and

     3. Very highly paid CEOs should realize that they might share some pain when choosing job reductions as a means to achieve corporate goals.

     Our resolution would introduce an internal foundation for CEO compensation — the company’s CEO/average-worker pay ratio. Commentators note that on the average for U.S. companies this ratio has gone from about 42 in 1980 to several hundred today and that it tends to be much lower in foreign companies that compete successfully with U.S. companies. Consistent with these facts, the Blue Ribbon Commission of the National Association of Corporate Directors has urged compensation committees to use such a ratio as a factor in setting CEO compensation. Our resolution follows this advice.

     Our resolution would not arbitrarily limit CEO compensation. Rather, it would offer the board the opportunity to persuade the shareholders that very high CEO compensation would make the company more competitive and would be in their interest.

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     At Cendant, CEO Compensation was 40.1, 14.8, and 22.9 million dollars in 2001, 2002, and 2003. The 25.9 million-dollar average is 1,015 times the $25,501 that the average U.S. worker makes according to the AFL-CIO’s Executive Paywatch (http://www.aflcio.org/corporateamerica/paywatch/). In their 2004 analyses of executive pay versus shareholder return, Business Week gave the CEO its worst rating (http://www.businessweek.com/pdfs/2004/0416) execpay.pdf), and Forbes gave the CEO a grade of D (http://www.forbes.com/lists/2004/04/21/04ceoland.html).”

Board Of Directors’ Position

     The Board of Directors recommends a vote “AGAINST” the above proposal. The Board believes that adoption of this proposal would severely limit the Company’s ability to attract, motivate and retain the best leadership talent in today’s competitive environment and in the future by capping the compensation that may be paid to the Chief Executive Officer. The Company must be able to offer integrated compensation programs that pay competitively and consistently with comparable companies, align executive compensation with stockholder interest and link total compensation to Company and individual performance.

     The proposal would limit the Chief Executive Officer’s compensation based on an arbitrary and formalistic mathematical formula that does not take into account the complex factors and analysis that must be considered in determining the appropriate compensation of a Chief Executive Officer. Such factors and analysis considered in arriving at a compensation amount include financial and other business goals of the Company, as well as individual contributions and performance. The Compensation Committee of the Board of Directors, which is composed entirely of independent, non-employee directors, recognizes its responsibility to recommend executive compensation decisions that are in the best interest of the Company and the long-term interests of the Company’s stockholders. The Compensation Committee agrees that executive compensation must be carefully evaluated, and the Compensation Committee thoroughly examines and approves all compensation arrangements relating to the Named Executive Officers, including those of its Chief Executive Officer.

     In entering into the amended and restated employment agreement with the current Chief Executive Officer (described more fully in the Compensation Committee Report on Executive Compensation contained in this proxy statement), the Compensation Committee and the Board devoted significant time and effort to assess the performance of the Chief Executive Officer, and considered the Company’s goals and objectives, performance and relative stockholder return, the value of similar incentive awards to executive officers at comparable companies and awards made to the Chief Executive Officer in prior years in formulating the appropriate compensation terms of the Chief Executive Officer. Such employment agreement includes, among other things, a limit on the Chief Executive Officer’s bonus such that the bonus shall not exceed 150% of base salary unless the Company meets or exceeds earnings growth targets to more closely align the Chief Executive Officer’s compensation with the interests of stockholders. In addition, the Chief Executive Officer did not receive a base salary increase notwithstanding his right to an annual increase under his employment agreement during 2003 or 2004 and did not receive an equity grant in 2002, 2003 or 2004. As is evident by the foregoing, the Board and the Compensation Committee exercise their fiduciary duties in the compensation area by continually examining the compensation of the Chief Executive Officer and making appropriate adjustments from time to time consistent with these duties.

     The Board believes that it is ultimately in our stockholders’ best interest that this process not be subject to the limitations set forth in the proposed resolution. The proponent’s arbitrary and formalistic pay cap proposal would restrict the Compensation Committee’s role in engaging in the complex analysis necessary to determine appropriate compensation levels for the Company’s Chief Executive Officer and remove from the Board and the Compensation Committee the flexibility to recognize significant accomplishments of an individual that may be critical to ensuring the long-term success of the Company. The proponent’s limitation on the amount of compensation to be paid to the Company’s Chief Executive Officer would deprive the Company of needed flexibility in designing effective incentives to retain and properly incentivize the Chief Executive Officer. Under the current employment agreement with the Chief Executive Officer, the Compensation Committee negotiated the elimination of the Chief Executive

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Officer’s right to receive an annual award of stock options or other equity incentive awards, and such grant now is in the discretion of the Compensation Committee. The elimination of the Chief Executive Officer’s right to receive options annually resulted in a significant decline in his overall compensation. The Board believes that the elimination of such right in the current employment agreement demonstrates that the Board and the Company’s management are continually evaluating and taking appropriate action with respect to executive compensation without the need for an arbitrary and formalistic mathematical formula to determine executive compensation levels.

     THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “AGAINST” THIS PROPOSAL.

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STOCKHOLDER PROPOSAL
[PROPOSAL NO. 6]

     The Trowel Trades S&P 500 Index Fund, P.O. Box 75000, Detroit, Michigan 48275, owner of approximately 36,800 shares of the Company’s common stock, has given notice of its intention to present the following resolution at the 2005 Annual Meeting.

     “RESOLVED: that the shareholders of Cendant Corporation (“the Company”) urge the Board of Directors to seek shareholder approval of future severance agreements with senior executives that provide benefits in an amount exceeding 2.99 times the sum of the executives’ base salary plus bonus. “Future severance agreements” include employment agreements containing severance provisions, retirement agreements and agreements renewing, modifying or extending existing such agreements. “Benefits” include lump-sum cash payments and the estimated present value of periodic retirement payments, fringe benefits, perquisites and consulting fees to be paid to the executive.

SUPPORTING STATEMENT

     In our opinion, severance agreements as described in this resolution, commonly known as “golden parachutes”, are excessive in light of the high levels of compensation enjoyed by senior executives at the Company and U.S. corporations in general.

     We believe that requiring shareholder approval of such agreements may have the beneficial effect of insulating the Board of Directors from manipulation in the event a senior executive’s employment must be terminated by the Company. Because it is not always practical to obtain prior shareholder approval, the Company would have the option if this proposal were implemented of seeking shareholder approval after the material terms of the agreement were agreed upon.

     For those reasons, we urge shareholders to vote for this proposal.”

Board of Directors’ Position

     The Board of Directors recommends a vote “AGAINST” the above proposal. The Board does not believe that this proposal would enhance stockholder value and be in the best interests of the Company’s stockholders. To the contrary, the Board believes this proposal could hinder the Company’s flexibility to attract, motivate and retain the best leadership talent in today’s competitive environment and in the future.

     Despite the Board’s opposition to this proposal, the Board does believe that any severance agreement exceeding 2.99 times the sum of an executive’s base salary plus bonus should only be used sparingly and only under extraordinary circumstances. As a result, in 2002, the Board adopted a policy that the Company would not enter into any future severance arrangements with any of its executive officers that provides a severance benefit exceeding 2.99 times such employee’s base salary plus target bonus unless extraordinary circumstances exist and the arrangement is approved by the Company’s non-management directors. Extraordinary circumstances exist only if the Company determines, that it is necessary to exceed the threshold to obtain the services of an executive officer and when the benefits to the Company of obtaining such individual’s services outweigh the potential harm to stockholders of exceeding the threshold.

     As a general matter, the Board of Directors, through its Compensation Committee, oversees compensation matters for the Company’s executive officers. The Board and the Compensation Committee exercise their fiduciary duties and oversight responsibilities in implementing compensation and severance arrangements that, in their view, are appropriate. The Compensation Committee, which is composed entirely of independent, non-employee directors, recognizes its responsibility to recommend executive compensation decisions that are in the best interest of the Company and the long-term interests of the Company’s stockholders. The Compensation Committee has considered the advisability of using severance arrangements and determined that, under certain circumstances, they are in the best interests of the Company and its stockholders insofar as, among other reasons, they allow the Company to achieve its desired goals of retaining the best possible executive talent. The Board believes that it is ultimately in the

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stockholders’ best interests that the responsibility for this ongoing process continue to be vested in the Compensation Committee and the non-management Directors rather than being preempted and inhibited by the limitations such as those reflected in this proposal.

     The Board and the Compensation Committee believe that the use of employment and severance agreements for a limited group of key executives is reasonable, appropriate and necessary. Such severance agreements are intended to ensure that the affected individuals are free from personal distractions in the context of a potential change of control, when the Board needs the objective assessment and advice of these executives to determine whether a bid is in the best interests of the Company and its stockholders. The agreements also are designed to attract and retain highly qualified executives and to motivate executives to maximize stockholder returns. Importantly, in exchange for an agreement to provide severance, the Company obtains valuable covenants to protect the Company such as non-competition and non-solicitation covenants from the executive. The number and type of agreements that the Company has with its executives are consistent with industry practice.

     Finally, implementation of this proposal would be costly and disruptive for the Company. The adoption of the proposal would require the Company to either incur significant expense in calling a special stockholders’ meeting for the sole purpose of voting on this type of agreement or delay finalizing such an agreement until after its approval at the annual meeting of stockholders, harming the Company’s ability to recruit executive talent. This proposal suggests that stockholder approval for future severance agreements could be obtained after the material terms were agreed upon. The Board believes this is impractical and counterproductive. This proposal would place the Company at a competitive disadvantage in recruiting and retaining executive talent because severance agreements offered by the Company would be uncertain and therefore less valuable than competing offers provided by other companies, whose arrangements would be provided with final terms. The Board believes that it is in the best interest of the Company’s stockholders to provide the Board and the Compensation Committee the ability to make decisions with respect to severance arrangements and that the rigid and arbitrary limitations proposed are not necessary.

     THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “AGAINST” THIS PROPOSAL.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Mr. Edelman is Of Counsel to Paul, Hastings, Janofsky & Walker, LLP, a New York City law firm (successor to Battle Fowler). Paul, Hastings represented the Company in certain matters in 2004. It is expected that Paul, Hastings will continue to represent the Company in connection with certain matters from time to time in the future.

     Mr. Edelman is also a partner in Chartwell Hotels Associates (“Chartwell Hotels”). Chartwell Hotels currently owns an interest in 4 hotel properties franchised by wholly owned subsidiaries of the Company. During 2004, such hotel properties generated aggregate royalties of approximately $258,000 for the Company. In addition, Chartwell Hotels contributed marketing fund revenues of approximately $293,000 to the Company, which are required to be spent by the Company for marketing and reservation activities.

     Mr. Mulroney is a Senior Partner of Ogilvy Renault, a Montreal-based law firm. Ogilvy Renault represented the Company in certain matters in 2004. It is expected that Ogilvy Renault will continue to represent the Company in connection with certain matters from time to time in the future. Mr. Mulroney does not receive compensation for the services provided by Ogilvy Renault to the Company, and amounts paid by the Company to Ogilvy Renault in 2004 constituted less than 1% of Ogilvy Renault’s gross revenues for such year.

     Certain affiliates of Barclays Global Investors, N.A. (collectively, “Barclays”), an 8.28% stockholder, have performed, and may in the future perform, various commercial banking, investment banking and other financial advisory services for the Company and its subsidiaries for which they have received, and will receive, customary fees and expenses. Fees paid to Barclays by the Company and its subsidiaries in 2004 were approximately $5.8 million.

     Certain affiliates of Goldman Sachs Asset Management, L.P. (collectively, “Goldman”), a 5.43% stockholder, have performed, and may in the future perform, various commercial banking, investment banking and other financial advisory services for the Company and its subsidiaries for which they have received, and will receive, customary fees and expenses. Fees paid to Goldman by the Company and its subsidiaries in 2004 were approximately $21.0 million.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Exchange Act requires the Company’s officers and Directors, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC and the NYSE. Officers, Directors and greater than ten percent beneficial owners are required to furnish the Company with copies of all Forms 3, 4 and 5 they file.

     Based solely on the Company’s review of the copies of such forms it has received, the Company believes that all its officers, Directors and greater than ten percent beneficial owners complied with all filing requirements applicable to them with respect to transactions during 2004.

STOCKHOLDER PROPOSALS FOR 2006 ANNUAL MEETING

     Proposals received from stockholders are given careful consideration by the Company in accordance with Rule 14a-8 under the Exchange Act. Stockholder proposals are eligible for consideration for inclusion in the proxy statement for the 2006 annual meeting of stockholders if they are received by the Company on or before November 1, 2005. Any proposal should be directed to the attention of the Corporate Secretary, Cendant Corporation, 9 West 57th Street, New York, New York 10019. In order for a stockholder proposal submitted outside of Rule 14a-8 to be considered “timely” within the meaning of Rule 14a-4(c), such proposal must be received by the Company not later than the last date for submission of stockholder proposals under the Company’s by-laws. In order for a proposal to be “timely” under the Company’s by-laws, it must be received not less than sixty (60) days nor more than ninety (90) days before the 2006 annual meeting of stockholders; provided, however, in the event that less than seventy

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(70) days notice or prior public disclosure of the date of the meeting is given or made to stockholders, a proposal by the stockholders to be timely must be received not later than the close of business on the tenth day following the date on which such notice of the date of the annual meeting was mailed or such public disclosure was made.

ADDITIONAL INFORMATION

     Shareholders with Multiple Accounts. The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. The Company and some brokers household proxy materials, delivering a single proxy statement to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker or from us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent.

     If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, please notify your broker if your shares are held in a brokerage account or us if you hold registered shares. You can notify us by sending a written request to Cendant Corporation, 9 West 57th Street, New York, New York 10019, Attention: Corporate Secretary.

     Solicitation of Proxies. The accompanying form of proxy is being solicited on behalf of the Board of Directors of the Company. The expenses of solicitation of proxies for the Meeting will be paid by the Company. In addition to the mailing of the proxy material, such solicitation may be made in person or by telephone by Directors, officers and employees of the Company, who will receive no additional compensation therefor. Upon request, the Company will reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding material to beneficial owners of shares of Common Stock. The Company has hired Georgeson Shareholder Communications Inc. to aid in the solicitation of proxies. It is estimated that the fee for Georgeson Shareholder Communications will be approximately $13,500 plus reasonable out-of-pocket costs and expenses. Such fee will be paid by the Company.

     Electronic Access to Proxy Statement and Annual Report. This proxy statement and our 2004 annual report may be viewed online at www.cendant.com. If you are a stockholder of record, you can elect to receive future annual reports and proxy statements electronically by marking the appropriate box on your proxy card, by following the instructions provided if you vote via the Internet or by telephone or by enrolling through our transfer agent’s website at www.melloninvestor.com. If you choose this option, you will receive a proxy form in mid-March listing the web site locations and your choice will remain in effect until you notify us by mail that you wish to resume mail delivery of these documents. If you hold your Cendant stock through a bank, broker or another holder of record, refer to the information provided by that entity for instructions on how to elect this option.

By Order of the Board of Directors

ERIC J. BOCK
Secretary

Dated: March 1, 2005

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ANNEX A

CENDANT CORPORATION
DIRECTOR INDEPENDENCE CRITERIA

     A director who satisfies all of the following criteria shall be presumed to be independent.

     For purposes of establishing director independence:

     (i) a director is an “affiliate” of Cendant or its subsidiaries if such director serves as a director, executive officer, partner, member, principal or designee of an entity that, directly or indirectly, controls, or is controlled by, or is under common control with, Cendant or its subsidiaries;

     (ii) an “immediate family member” includes a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law and anyone (other than domestic employees) who shares such person’s home;

     (iii) “executive officer” means Cendant’s president, principal financial officer, principal accounting officer, any vice president of Cendant in charge of a principal business unit, division or function, any other officer who performs a policy-making function or any other person who performs similar policy-making functions for Cendant; and

     (iv) references to “Cendant” in the foregoing criteria shall be deemed to include Cendant Corporation and any subsidiary in a consolidated group with Cendant Corporation.

     The Cendant Board will annually review all commercial and charitable relationships of directors. Whether directors meet these categorical independence criteria will be reviewed and will be made public annually prior to their standing for re-election to the Cendant Board.

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ANNEX B

AUDIT COMMITTEE CHARTER

I.   Purpose of Audit Committee

     The purpose of the Audit Committee, which is part of the Board, shall be (a) to assist the Board’s oversight of (i) the integrity of the Company’s financial statements, (ii) the Company’s independent auditors’ qualifications and independence, (iii) the performance of the Company’s independent auditors and the Company’s internal audit function, (iv) the Company’s compliance with legal and regulatory requirements, and (v) the Company’s systems of disclosure controls and procedures, and internal controls over financial reporting, and (b) to prepare a report for inclusion in the Company’s annual proxy statement, in accordance with applicable law, regulation and listing standards.

II.   Composition of Audit Committee

     The Audit Committee shall consist of not less than four members. Each member of the Audit Committee shall be appointed by the Board upon the recommendation of the Nominating/Corporate Governance Committee and shall satisfy the independence and expertise requirements of the New York Stock Exchange and the Sarbanes-Oxley Act of 2002 (the “Act”) as appropriate, including the rules and regulations promulgated by the Securities and Exchange Commission. To ensure that each Audit Committee member can devote the appropriate time to their oversight role, each member is limited to serving simultaneously on the audit committees of no more than three public companies.

     Vacancies on the Audit Committee shall be filled by majority vote of the Board at the next meeting of the Board following the occurrence of the vacancy. The members of the Audit Committee may be removed by a majority vote of the Board.

III.   Authority and Responsibilities of Audit Committee

     The following are the responsibilities of the Audit Committee:

  A.   Independent Auditor

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     The Audit Committee should present its conclusions with respect to the above matters, as well as its review of the lead partner of the independent auditor to the Board.

  B.   Financial Reporting, Accounting Policies and Internal Control

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  C.   Audit Process of the Independent Auditor

  D.   Internal Audit Function

  E.   Legal and Ethical Conduct Matters

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  F.   Evaluation

IV.   Meetings of the Audit Committee

     The Audit Committee shall meet at least six times per year, or more frequently as circumstances require.

     The Audit Committee shall report regularly to the Board regarding the execution of its duties and responsibilities, at a minimum, after each scheduled meeting of the Audit Committee, and shall keep written minutes of its meetings, which minutes shall be maintained with the books and records of the Board of Directors of the Company.

     The members of the Audit Committee shall select a chair who will preside at each meeting of the Audit Committee and, in consultation with the other members of the Audit Committee, shall set the frequency and length of each meeting and the agenda of items to be addressed at each upcoming meeting. A majority of the members of the Audit Committee present in person or by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other shall constitute a quorum.

     Periodically, the Audit Committee shall meet with the Company’s management, members of the Company’s internal Corporate Audit Staff and with the independent auditor in separate sessions.

V.   Resources of the Audit Committee

     The Audit Committee shall have the authority to retain and compensate legal, accounting or other advisors to advise the Audit Committee and assist it in fulfilling its duties and responsibilities. The Audit Committee may request any officer or employee of the Company, or the Company’s outside counsel or independent auditor, to attend a meeting of the Audit Committee or to meet with any members of, or advisors to, the Audit Committee.

VI.   Other

     While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits, or to determine that the Company’s financial statements are materially accurate and in accordance with generally accepted accounting principles. This is the responsibility of the Company’s management and the independent auditor.

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ANNEX C

CENDANT CORPORATION
1999 NON-EMPLOYEE DIRECTORS
DEFERRED COMPENSATION PLAN

AMENDED AND RESTATED AS OF JANUARY 22, 2005

     1. Purpose. The purpose of the Cendant Corporation 1999 Non-Employee Directors Deferred Compensation Plan (the “Plan”) is to align the interests of non-employee directors of Cendant Corporation (“Cendant”) with the interests of Cendant stockholders by requiring and/or permitting such directors to defer certain of their fees received for providing services to Cendant in the form of Cendant stock equivalents.

     2. Eligibility. Directors of Cendant who are not also employees of Cendant (“Directors”) are (i) with respect to elective deferrals, eligible to participate in the Plan (subject to their irrevocable election to defer receipt of eligible compensation) and (ii) with respect to required deferrals, required to participate in the Plan.

     3. Administration. The Plan will be administered by the Compensation Committee of the Board of Directors of Cendant, or such other committee of the Board of Directors designated by the Board of Directors from time to time (the “Committee”).

     4. Deferral of Compensation. Subject to such rules, regulations and procedures that Cendant may establish from time to time, and subject to the execution by a Director of a valid deferral election, Directors may elect to defer all, but not less than all, of their annual retainer fees, as well as such other fees and payments determined by the Board of Directors or the Committee to be either mandatory or eligible for deferral from time to time (collectively, “Fees”) into the Plan. All Fees deferred into the Plan will be converted into a number of Cendant Share Units. The number of Cendant Share Units allocated to a Director’s account will equal the amount of Fees deferred into the Plan as of any given date (an “Allocation Date”), divided by the fair market value of Cendant common stock, par value $0.01 per share (“Cendant Stock”) as of the Allocation Date. For purposes of the Plan, fair market value shall equal the closing price per share of Cendant Stock as of the applicable Allocation Date, or such other reasonable formula determined by the Committee. An Allocation Date will occur on each date upon which any Director would otherwise become entitled to receive all or any portion of any Fee, or as otherwise determined by the Committee. Each Cendant Share Unit will be the equivalent of one share of Cendant Stock.

     5. Election. With respect to elective deferrals, in order to participate in the Plan, a Director must complete a deferral election in such form, and at such time, as determined by Cendant in its sole discretion, but in accordance with IRS regulations applicable to the deferral of income. Once an election is made, it may not be revoked; provided, however, that a Director may, no later than sixty (60) days prior to the beginning of any calendar year, revoke an election to the extent applicable to such calendar year. No deferral election form is required with respect to Fees which are required to be deferred into the Plan.

     6. Dividends. Additional Cendant Share Units will be credited to a Director’s account in respect of cash dividends and/or special dividends and distributions, if any, on Cendant Stock, based on the number of Cendant Share Units credited to such Director’s account as of the record date for such dividend or distribution. Such additional units shall be credited on the next Allocation Date following the payment date for such dividend or distribution. The number of Cendant Share Units to be so credited shall be equal to the quotient obtained by dividing (A) the product of (i) the number of Cendant Share Units credited to such account on the dividend or distribution record date and (ii) the dividend (or distribution value as determined by the Committee in its sole discretion) per share of Cendant Stock, by (B) the closing price of a share of Cendant Stock as of such dividend payment date or distribution date.

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     7. Adjustments. If at any time the number of shares of Cendant Stock is increased or decreased as the result of any stock dividend or distribution, stock split, combination or reclassification of shares or any similar transaction, the number of Cendant Share Units in a Director’s account will be equitably adjusted, as determined by the Committee in its sole discretion, to the extent necessary to preserve, but not increase, the value of each Director’s account.

     8. Vesting. Each Director will be fully and immediately vested in his or her account under the Plan.

     9. Distribution of Deferred Compensation . Each Director (or his or her beneficiary) will receive a distribution of his or her account (including units deferred prior to the date of any amendment to the Plan), in the form of shares of Cendant Stock, on the date which is seven months immediately following the date upon which such Director is no longer a member of Cendant’s Board of Directors for any reason. Distributions shall not occur prior to or following such date under any circumstances. The number of shares of Cendant Stock payable to a Director upon distribution will equal the number of Cendant Share Units held in such Director’s account as of the date of such distribution.

     10. Authorized Shares. Subject to the approval of the stockholders of the Cendant, a total of 500,000 shares of Cendant Stock shall be authorized and available to be issued under the Plan. In the absence of such approval, a total of 80,000 shares of Cendant Stock shall be authorized and available to be issued under the Plan.

     11. Successors in Interest. The obligations of Cendant under the Plan shall be binding upon any successor or successors of Cendant, whether by merger, consolidation, sale of assets or otherwise, and for this purpose reference herein to Cendant shall be deemed to include any such successor or successors. The right of Directors or that of any other person, to the payment of deferred compensation or other benefits under this Plan may not be assigned, transferred, pledged or encumbered except by will or by the laws of descent and distribution.

     10. Miscellaneous. A Director shall have only the interest of an unsecured general creditor of Cendant in respect of Cendant Share Units allocated to his or her account. All amounts deferred under the Plan shall remain the sole property of Cendant, subject to the claims of its general creditors and available for Cendant’s use until actually distributed to the Director. With respect to amounts deferred under the Plan, the obligation of Cendant hereunder is purely contractual and shall not be funded or secured in any way. The Committee shall have the authority to adopt rules and regulations for carrying out the Plan and to interpret, construe and implement the provisions thereof. The distribution of deferred amounts under the Plan to Directors shall be subject to applicable withholding taxes.

     11. Governing Laws. This Plan shall be construed and enforced in accordance with, and governed by, the laws of the State of New Jersey.

     12. Termination and Amendment of the Plan. The Board of Directors of Cendant may terminate this Plan at any time. The Board of Directors of Cendant may, without the consent of any Director or beneficiary, amend the Plan at any time and from time to time; provided, however, that no such amendment shall adversely affect the rights of any such Director or beneficiary with respect to amounts previously deferred under the Plan (as determined by the Committee in its sole discretion).

     13. Interpretation. Cendant intends that transactions under this Plan will be exempt under amended Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934, as amended, unless otherwise determined by Cendant.

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ANNEX D

TRUST DEED AND RULES

of the

CENDANT 2005 UK SHARE INCENTIVE PLAN

DATED
January 22, 2005

APPROVED BY THE
INLAND REVENUE ON
                    2005

under reference         

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TRUST DEED

THIS TRUST DEED is made the                day of                2005

BETWEEN

together the “Original Parties’

WHEREAS

NOW THIS DEED WITNESSETH as follows:

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SCHEDULE 1:

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