FILED PURSUANT TO RULE 424(b)(3)
S.E.C. FILE NUMBER 333-23063
FIFTH SUPPLEMENT TO PROSPECTUS
July 17, 1999
(TO PROSPECTUS DATED SEPTEMBER 18, 1997)
The Prospectus dated September 18, 1997, as supplemented through the date hereof
(the "Prospectus"), relating to the offer and sale, from time to time, by the
Selling Securityholders listed therein of up to $550,000,000 aggregate principal
amount of 3% Convertible Subordinated Notes Due February 15, 2002 (the "Notes")
of Cendant Corporation (the "Company") and up to 17,959,205 shares of common
stock, $.01 par value of the Company, issuable upon conversion of the Notes, is
hereby supplemented as follows:
We urge you to carefully read the "Risk Factor" section appearing on page S-2 ,
where we describe specific risks associated with the Notes.
The following entities are hereby named as Selling Securityholders as
contemplated on page 29 of the Prospectus:
PRINCIPAL AMOUNT NUMBER OF
OF NOTES COVERED SHARES COVERED
SELLING SECURITYHOLDER BY THIS PROSPECTUS BY THIS PROSPECTUS
- -------------------------------- -------------------- -------------------
McMahan Securities Company, L.P. $ 608,000 19,853
1 World Financial Center
New York, NY 10281
Merrill Lynch Pierce Fenner and $ 5,000a 163a
Smith Inc.
101 Hudson Street, 10th Floor
Jersey City, NJ 07302-3997
- -------------------------------------------------------------------------------
a Principal Amount of Notes and Number of Shares represented in this Supplement
by this Selling Securityholder is in addition to those Notes and Shares set
forth with respect to this Selling Securityholder in the Prospectus, as
supplemented through the date hereof.
<PAGE>
RISK FACTOR
You should carefully read the following risk factor before purchasing
any Notes.
Discovery of Accounting Irregularities and Related Litigation and SEC
Investigation
On April 15, 1998, we announced that in the course of transferring
responsibility for the Company's accounting functions from the former CUC
International Inc. ("CUC") personnel to former HFS Incorporated ("HFS")
accounting personnel and preparing for the reporting of first quarter 1998
financial results, we discovered accounting irregularities in certain CUC
business units. As a result, upon discovering such accounting irregularities in
certain former CUC business units, the Audit Committee of our Board of Directors
and its counsel, assisted by auditors, immediately began an intensive
investigation that resulted, in part, in us restating our previously reported
financial results for 1997, 1996 and 1995.
As a result of these accounting irregularities, more than 70 lawsuits
claiming to be class action lawsuits, two lawsuits claiming to be brought
derivatively on our behalf and several individual lawsuits have been filed in
various courts against us and other defendants, asserting various claims under
the federal securities laws and certain state statutory and common laws,
including claims that our previously issued financial statements allegedly were
false and misleading and that we allegedly know or should have known that they
caused the price of our securities to be artificially inflated. In addition, the
staff of the SEC and the United States Attorney for the District of New Jersey
are conducting investigations relating to the accounting issues. The SEC Staff
has advised the Company that its inquiry should not be construed as an
indication by the SEC or its staff that any violations of law have occurred.
Please see the Company's Annual Report on Form 10-K/A for the fiscal year ending
December 31, 1998.
We do not believe that it is feasible to predict or determine the
final outcome of these proceedings or investigations or to estimate the amounts
or potential range of loss with respect to the resolution of these proceedings
or investigations. In addition, the timing of the final resolution of the
proceedings is uncertain. The possible outcome or resolution of the proceedings
could include a judgment against us or a settlement and could require
substantial payments by us. In addition, the timing of the final resolution of
the proceedings or investigations is uncertain. We believe that material adverse
outcomes with respect to such proceedings or investigations could have a
material impact on our financial condition, results of operations and cash
flows.
