NEW YORK, Aug. 28, 2002 - Cendant Corporation (NYSE: CD) today announced it will expense future stock option grants beginning January 1, 2003.
    
The Company anticipates that it will reduce the issuance of stock options for employees in the future and instead utilize grants of restricted stock.  The Company estimates the prospective per share expense of its equity compensation programs will be $0.03 to $0.04 in 2003, and gradually increase over time.
    
In addition, Cendant's Board has approved amending and extending the employment agreement with its Chairman, President and CEO, Henry R. Silverman.  Mr. Silverman's prior agreement was approved by the Board of Directors in 1996 and by shareholders in 1997. The amended agreement has been extended through 2012 and eliminates Mr. Silverman's contractual right to a mandatory annual stock option grant; instead it provides for an incentive bonus tied to Cendant's pre-tax earnings. Mr. Silverman will not receive restricted stock.
    
In 2002, Mr. Silverman's reported compensation is expected to be reduced by more than 50 percent and is estimated to be approximately $15 million as compared to a reported amount of $36 million in 2001.  Mr. Silverman, who voluntarily forfeited his annual stock option grant in 2002, is one of Cendant's largest stockholders. He directly owns 8 million shares of Cendant common stock and has options to purchase 36.4 million shares of Cendant common stock, which were granted between 1993 and 2001 at an average exercise price of approximately $13.
    
Cendant Corporation is primarily a provider of travel and residential real estate services. With approximately 70,000 employees, New York City-based Cendant provides these services to business and consumers in over 100 countries. 

Statements about future results made in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.