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DAN GILBERT Founder and Chairman of the Board | ||||||
| | | | To elect to our Board of Directors two Class | | |
| | | | To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, | | |
| | | | To approve an amendment to the Amended & Restated Rocket Companies, Inc. | | |
| | | | To transact any other business that may properly come before the meeting or any postponement or adjournment of the meeting. | | |
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| NAMED EXECUTIVE OFFICER COMPENSATION TABLES | | | | | 60 | | |
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| SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | | | | | 88 | | |
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| PROPOSAL NO. 2 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2023 | | | | | 94 | | |
| PROPOSAL NO. 3 – APPROVAL OF AMENDMENT TO THE TEAM MEMBER STOCK PURCHASE PLAN | | | | | 96 | | |
| QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND 2023 ANNUAL MEETING | | | | | 101 | | |
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| | | | TIME:1:00 P.M., Eastern Daylight Time | | |
| | | | LOCATION (VIRTUAL ONLY):www.VirtualShareholderMeeting.com/RKT2023 | | |
| | | | RECORD DATE: Monday, April 17, 2023 | | |
| | | | 24 hours a day to transmit your voting instructions. | | |
| | | | You can use any touch-tone telephone. | | |
| | | | and return your proxy card or voting instruction card in the enclosed envelope in accordance with the instructions provided in this Proxy Statement. | | |
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| | | | BOARD RECOMMENDATION:FOR each nominee | | | |
| | | | REQUIRED VOTE:Plurality of the votes cast | | |
| | | | BOARD RECOMMENDATION:FOR | | | |
| | | | REQUIRED VOTE:Majority of the voting power of shares of stock present and entitled to vote | | |
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| | | | REQUIRED VOTE:Majority of the voting power of shares of stock present and entitled to vote | | |
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| | DIRECTOR SINCE*:March 2020 | | |
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| | DIRECTOR SINCE*:August 2020 PRIMARY OCCUPATION:President, Chief Executive Officer and CMS Energy and Consumer’s Energy (NYSE: | | |
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| Compensation Element | | | | Brief Description | | | | Performance/Vesting Period | | | | Objectives | |
| Base Salary | | | | Fixed cash compensation | | | | One Year | | | | Attract and retain | |
| Annual Discretionary Cash Bonus | | | | Earned based on an assessment of individual and Company performance | | | | One Year | | | | Retain and motivate | |
| Equity Awards | | | | RSU grants | | | | RSUs generally vest on each of the first three anniversaries of the grant date | | | | Retain and motivate executives. Reward achievement of long-term strategic business objectives. Enhance alignment with stockholders | |
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| Maintained base salaries in 2022, except for increases in connection with promotions | | | | No cash bonuses earned for 2022, except bonuses for promoted persons for time in prior roles | | | | Awarded RSUs to executive officers serving in March 2022; no equity awards were granted in 2021 | |
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WHAT WE DO
WHAT WE DON’T DO
CORPORATE GOVERNANCE HIGHLIGHTS – REASONABLE GOVERNANCE WITH A CONTROLLING STOCKHOLDER Key elements of our governance are set forth below.
On February 8, 2023, Jay Farner provided notice to our Board that he would retire as Chief Executive Officer, effective June 1, 2023, and as Vice Chairman and member of our Board, effective immediately. On February 9, 2023, our Board appointed Bill Emerson as the Company’s interim Chief Executive Officer, effective on June 1, 2023. Our Board has commenced a search for a permanent Chief Executive Officer and has retained a leading firm to support its evaluation of internal and external candidates. In addition, on February 9, 2023, upon recommendation of our Nominating and Governance Committee, our Board elected Bill as a Class I director, to fill the seat on our Board vacated by Jay and to serve for a term expiring at the Company’s annual meeting of stockholders in 2024. PROPOSAL NO. 2 – RATIFICATION OF APPOINTMENT OF ERNST & YOUNG AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2023 Our Board is seeking stockholder support of our Audit Committee’s appointment of Ernst & Young as the Company’s independent registered public accounting firm for 2023. Ernst & Young has served as the independent auditor of the Company or RHI and its subsidiaries since 1999. Our Audit Committee reappointed Ernst & Young as the Company’s independent registered public accounting firm for 2023 primarily based upon the factors set forth below. • Performance assessment by our Audit Committee and management • Expertise and industry knowledge • Independence, objectivity and professional skepticism • External data on audit quality and performance • Reasonableness of fees
• Efficiencies in performing services, including use of technology • Quality of communications • Significant institutional knowledge from long tenure ENVIRONMENTAL, SOCIAL AND GOVERNANCE As part of our ongoing evolution and focus on the elements of sustainability, human capital management, social responsibility and governance, we enhanced our efforts in 2022 by formally engaging with our Board on these important topics and We HUMAN CAPITAL MANAGEMENT Being All-In Rocket Companies invests for the long term and places tremendous value in supporting our team members, clients and hometowns. Dan Gilbert, our founder and Chairman, purposefully created a strong cultural foundation of core principles, or “ISMs”, as a cultural operating system to guide decision making by all of our team members. These ISMs are our DNA, compass and foundation. At the heart of the ISMs is a simple, yet powerful, concept: “Love our team members. Love our clients.” Our team members put the ISMs into action every day. The result is an empowered and passionate team aligned in a common mission. • In 2022, 92% of Team Member Support And Engagement • In 2022, approximately 90% of our team members support the the community
In 2022, 73% of our team members participated in community volunteering or giving events Diversity, Equity And Inclusion – DEI In Our DNA Our Diversity, Equity and Inclusion (DEI) mission is weaving DEI into our DNA with an intentional commitment to fostering an inclusive environment built on open doors, open minds and an open culture rooted in trust. DEI is at the heart of our values and sustainability. We
in our Team Member Resource Networks. Total membership in 2022 was approximately 10,200 team members across our 13 networks. • Rocket Companies ranked #7 on Fortune Magazine’s list of 100 Best Companies to Work For in 2022 and has ranked in the top-30 companies on the list for 19 consecutive years • Rocket Companies also ranked #1 on Fortune’s list of the Best Workplaces in Financial Services & Insurance in both 2021 and 2022 • In 2022, 86% of our team members feel they can be their authentic self at work INDEX OF FREQUENTLY REQUESTED INFORMATION
ADDITIONAL RESOURCES ANNUAL MEETING Proxy Statement. Annual Report. Voting Website. www.proxyvote.com BOARD AND MANAGEMENT Board of Directors.https://www.rocketcompanies.com/our-team/board-of-directors/ Management.https://www.rocketcompanies.com/our-team/leadership/ GOVERNANCE DOCUMENTS Code of Conduct and Ethics. Corporate Governance Guidelines. Committee Charters. ir.rocketcompanies.com/governance/governance-documents OTHER Investor Relations.ir.rocketcompanies.com Diversity, Equity & Inclusion.https://www.rocketcompanies.com/our-team/diversity-equity-and-inclusion/ 2022 ESG Report.https://www.rocketcompanies.com/social-impact/
Upon the unanimous recommendation of our Nominating and Governance Committee, our Board has unanimously nominated OUR BOARD In accordance with our certificate of incorporation and bylaws, the number of directors on our Board will be determined from time to time by our Board. Our certificate of incorporation provides that our Board is divided into three classes of directors, with staggered three-year terms. Approximately one-third of our Board will be elected each year. Information regarding each director nominee and continuing director is set forth below as of the record date. As detailed further in this proxy statement, our Board, including the two director nominees, reflects a broad array of knowledge, experience, skills, backgrounds and other attributes, including diversity.
Our Board Although we remain a controlled company that is not subject to In February 2023, Bill was appointed to our Board The individuals named as proxies in the form of proxy solicited by our Board intend to vote the represented shares for such nominees, unless otherwise instructed on the form of proxy. The individuals named as proxies cannot vote for more than two nominees for election as directors at the Each of the nominees has consented to be named in this proxy statement and to serve if elected. If one or more of the nominees confirm before the election that they are unable
DIRECTOR NOMINATIONS AND APPOINTMENTS Our Nominating and Governance Committee is responsible for recommending director candidates to • Age, skills, diversity of experience and other background (including gender and race/ethnicity) • Demonstration of leadership • Possession of high ethical standards and integrity; • Ability to exercise sound judgment and be accountable; • Ability to interact with others in a manner which encourages responsible, open, challenging and inspired discussion; and • Independence, as Our Board, taking into account the recommendations of our Nominating and Governance Committee, selects nominees for election as directors at each annual meeting of stockholders. Our Nominating and Governance Committee and Board evaluate candidates to fill any vacancies during the year on a similar basis. Our Nominating and Governance Committee considers candidates for our Board from any reasonable source, including recommendations from our existing directors, management, stockholders and any third-party search firms engaged, and does not evaluate candidates differently based on the source of the recommendation. Our Nominating and Governance Committee’s charter provides it with the authority to retain and terminate search firms to identify director candidates, consultants and any other advisors to assist it in carrying out its duties. Stockholders may recommend director candidates for consideration by our Nominating and Governance Committee by giving written notice of the recommendation to the Chair of our Nominating and Governance Committee, in care of the Company, at the Company’s principal executive offices at 1050 Woodward Avenue, Detroit, MI 48226. All of our directors are in compliance with the overboarding restrictions in our Corporate Governance Guidelines, which provides that no director should serve on more than three other public company boards, no member of our Audit Committee should serve on more than two other public company audit committees and no director who is the Chief Executive Officer of another public company should serve on more than two other public company boards, aside from the board of his or her own company.
DIRECTOR INDEPENDENCE AND IMPACT OF CONTROLLED COMPANY STATUS Our shares of Class A common stock are listed on the NYSE. As RHI controls more than 50% of our combined voting power, we are considered a controlled company for the purposes of the rules and corporate governance standards of the NYSE. As a controlled company, we will continue not to comply with certain corporate governance requirements, including (1) that our Board have a majority of independent directors, (2) that we establish a compensation committee composed entirely of independent directors and (3) that we have a nominating and governance committee comprised entirely of independent directors, or otherwise ensure that the nominees for directors are determined or recommended to our Board by the independent members of our Board. However, we are subject to and comply with the requirement that we have an audit committee composed entirely of independent members. If at any time we cease to be a controlled company under the rules of the NYSE, our Board will take all action necessary to comply with the applicable rules of the NYSE, including appointing a majority of independent directors to our Board and establishing certain committees composed entirely of independent directors, subject to a permitted phase-in period. Our Board recently undertook its annual review of director independence in accordance with the applicable rules of the NYSE. The independence rules include a series of objective tests, including that the director is not employed by us and has not engaged in various types of business dealings with us. In addition, our Board must make a subjective determination as to each independent director that no relationship exists which, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our Nominating and Governance Committee made recommendations to Our Board has determined that each of Jonathan Mariner, Suzanne Shank and Nancy Tellem are independent directors as such term is defined by the applicable rules and regulations of the NYSE. In addition, after considering all of the relevant facts and circumstances, our Board has determined that each of: (1) Jonathan Mariner, Suzanne Shank and Nancy Tellem, for purposes of service on our Audit Committee, and (2) Nancy Tellem, for purposes of service on our Compensation Committee, qualifies as independent in accordance with the additional independence rules established by the SEC and the NYSE for such Committees.
DIRECTOR BACKGROUND AND QUALIFICATIONS
2023 CLASS III DIRECTOR NOMINEES, CONTINUED
CLASS I DIRECTORS WITH TERMS EXPIRING IN 2024, CONTINUED
CLASS I DIRECTORS WITH TERMS EXPIRING IN 2024, CONTINUED
CLASS II DIRECTORS WITH TERMS EXPIRING IN 2025
CLASS II DIRECTORS WITH TERMS EXPIRING IN 2025, CONTINUED
OVERSIGHT BY OUR BOARD OF DIRECTORS Our Board has general oversight responsibility for the business and affairs of the Company. The directors, in exercising their duties, represent and act on behalf of the stockholders. Our Board serves as the ultimate decision-making body of the Company, except for those matters reserved to (or shared with) our stockholders. Our Board is responsible for overseeing senior management, which is, in turn, responsible for the operations of the Company. Although our Board does not have responsibility for our day-to-day management, it stays regularly informed about our business and provides guidance to senior management through periodic meetings and other informal Our Board’s primary areas of focus include strategy, finance, capital markets and capital Our Board operates under the leadership of our Chairman, Dan Gilbert. Our Board believes Dan is best suited to serve as Chairman and guide the strategic priorities of the Company in light of his substantial industry knowledge and experience as founder, current Chairman and former Chief Executive Officer of Rocket Mortgage, one of our key operating subsidiaries. In addition, Dan Gilbert and RHI, our principal stockholder, which is controlled by Dan Gilbert, hold all of our issued and outstanding Class D common stock and control 79% of the combined voting power of our common stock as of the record date. Accordingly, RHI and Dan Gilbert control our business, policies and affairs. RHI and Dan Gilbert also can control any action requiring the general approval of our stockholders, including the election of our Board, the adoption of amendments to our certificate of incorporation and bylaws and the approval of any merger or sale of substantially all of our assets. Our Board believes that, by separating the positions of Chairman and Company while providing more time for the Chief Executive Officer to manage the business and develop and implement strategies. Our Board also believes that the Company and its stockholders are best served by maintaining flexibility to have any director serve as Chairman or Vice Chairman and periodically evaluate whether to have an independent lead director. Our Board recognizes the increasing utilization of non-executive chairmen and independent lead directors in many public companies. However, our Board believes its current leadership structure is most appropriate for us as a controlled company and best serves the stockholders of the Company at this time. The Corporate Governance Guidelines require us to have an independent lead director if we are no longer a controlled company under the rules of the NYSE and the Chairman is not an independent director. There is no “one size fits all” approach to ensuring independent leadership. Our Board believes that its three independent directors are deeply engaged and provide significant independent leadership and direction given their executive and Board experience. The independent directors are sole members of our Audit Committee, and one independent director serves on the Compensation
independent advisors as they deem appropriate. Management supports this oversight role through its tone-at-the-top and open communication. BOARD OVERLAP WITH RHI Jay Farner, our Chief Executive Officer, certain of our other executive officers and the directors affiliated with RHI own equity interests in RHI. Furthermore, four members of our board of directors Our certificate of incorporation provides that none of the RHI Affiliated Entities nor any officer, director, member, partner or team member of any RHI Affiliated Entity (each, an “RHI Party”) has any duty to refrain from engaging in the same or similar business activities or lines of business, doing business with any of our clients or suppliers or employing or otherwise engaging or soliciting for employment any of our directors, officers or team members. None of our directors or officers will be liable to us or to any of our subsidiaries or stockholders for breach of any fiduciary or other duty under statutory or common law, as a director or officer or controlling stockholder or otherwise, by reason of any such activities, or for the presentation or direction to, or participation in, any such activities by any RHI Party. In our certificate of incorporation, to the fullest extent permitted by applicable law, we renounce any interest or expectancy that we have in any business opportunity, transaction or other matter in which any RHI Party participates or desires or seeks to participate in. This applies even if the opportunity is one that we might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so. To the fullest extent permitted by applicable law, each such RHI Party has no duty to communicate or offer such business opportunity to us. Further, each such RHI Party is not liable to us or any of our stockholders for breach of any fiduciary or other duty under statutory or common law, as a director or officer or controlling stockholder, or otherwise, by reason of the fact that such RHI Party pursues or acquires such business opportunity, directs such business opportunity to another person, or fails to present such business opportunity, or information regarding such business opportunity, to us. The Exchange Agreement (defined below) specifies that we will not amend the provisions of our certificate of incorporation renouncing corporate opportunities without the consent of RHI as long as RHI holds any Holdings Units. See “Certain Relationships and Related Person Transactions – Related Person Transactions – Exchange Agreement.” Notwithstanding the above, our certificate of incorporation does not renounce any interest or expectancy we may have in any business opportunity, transaction or other matter that is offered to an RHI Party who is one of our directors or officers and who is offered such opportunity solely in his or her capacity as one of our directors or officers, as reasonably determined by such RHI Party.
Our Board and Committees meet throughout the year at regularly scheduled meetings and informational sessions, and also hold special meetings and act by written consent as appropriate. The non-management directors hold executive sessions to meet without management present, generally at regularly scheduled Board meetings as well as other times that such directors deem Strong Meeting Our Board met Our Board has delegated various responsibilities and authority to Committees, which include our Audit Committee, Compensation Committee and Nominating and Governance Committee. Each Committee operates under a written charter approved by our Board, which is reviewed annually by the respective Committee and is available on the Governance tab of our investor relations website located at ir.rocketcompanies.com. The table below sets forth the current membership for our Committees and the number of meetings held by each Committee in
(1) Bill replaced Jay as a member of our Board in February 2023. (2) Jennifer replaced Jay as a member of our Nominating and Governance Committee in January 2023. |
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| Full Board | | | | • Review of • Address emerging issues, risks and innovation. • Approval of key operating policies, including liquidity risk management, cash management and MSR investment policies. • Key strategic acquisitions, mergers and • Review of capital allocation strategy, including share repurchase program and dividends. • Oversight of management’s response to crises, including our response to recent macroeconomic issues and the COVID-19 pandemic • Oversight of human capital management, including corporate culture and diversity, equity and • Regular engagement on ESG matters important to our stakeholders. • General oversight of stockholder engagement. • Succession planning for the CEO and other executive officers, as well as Board leadership. • Executive sessions consisting solely of the non-management and independent directors. | |
| Audit | | | | • Oversight of our major financial risk exposures (including liquidity, capital spending, credit, financings, interest rate management (hedging), tax matters and, on a shared basis with • Review of financial statements and SEC reports, including the adequacy of our internal control over financial reporting, disclosure controls and procedures, and any mitigating activities adopted in response to material weaknesses or significant control deficiencies. • Oversight of the Company’s policies on risk assessment and risk management, including enterprise risk management. • Monitor legal matters and regulatory compliance including compliance with the Company’s Code of Conduct and Ethics. • Regular oversight and consultations with the independent registered public accounting firm. • Direct oversight of the internal audit • Oversight of the whistleblower hotline processes for accounting and auditing matters. • Review and approval of related person transactions in accordance with our Related Person Transaction | |
| | | Rocket Companies • 2023 Proxy Statement | | | 30 of 120 | |
| Compensation | | | | • Review and approval (or recommendation to our Board for approval) of compensation, as well as severance, termination and change in control, policies and agreements for the executive officers. • Compare benchmarking and survey data to evaluate executive officer compensation programs. • Consider whether and how our executive compensation philosophy, policies and programs support our overall business and risk management strategy. • Review the material risks associated with our compensation structure, policies and programs for all team members to determine whether they encourage excessive risk-taking. • Evaluate compensation policies and practices to mitigate risk. • Direct oversight of stockholder engagement related to compensation matters. | |
| Nominating And Governance | | | | • Review of qualifications, expertise, experience and characteristics of Board members and oversight of director nominations and appointments. • Oversight of Board structure and composition, and review of director succession planning. • Leadership of management succession planning, including in the event of an unexpected occurrence. • Compare benchmarking and survey data to evaluate director compensation programs. • Review and approval of the Corporate Governance Guidelines and other key governance policies, and monitoring compliance. • Manage the • Oversight of the Company’s onboarding and continuing education programs for directors. | |
| Human Capital Management | | | | Our Board understands the importance of supporting our team members’ growth and mobility within the organization and receives | |
| Market and Industry Trends | | | | Our Board substantively engages with management on our strategic planning process as we navigate an evolving economic environment and assess our strategy in response to shifting industry trends. | |
| | | Rocket Companies • 2023 Proxy Statement | | | 31 of 120 | |
| Cybersecurity Risk And Oversight | | | | We prioritize digital safety for our clients, team members and stakeholders. We are dependent on information technology networks and systems, including the internet, to securely collect, process, transmit and store electronic information, and networks of third-party vendors that receive, process, retain and transmit electronic information on our behalf. Further, we are dependent on the secure, efficient and uninterrupted operation of our technology infrastructure, including computer systems, related software applications and data centers, as well as those of certain third parties and affiliates. | |
| Management Succession Planning | | | | Our Nominating and Governance Committee oversees the Company’s executive officer succession planning. Our Nominating and Governance Committee generally will discuss and recommend to our Board for approval a CEO and executive officer succession plan as well as an interim CEO succession plan in the event of an unexpected occurrence, which is intended to provide leadership continuity in the event of unexpected vacancies, including those from a major catastrophe. Our Nominating and Governance Committee reviews such matters and makes recommendations to In 2022, through discussions regarding management succession planning in executive session at regularly scheduled meetings, our Nominating and Governance Committee and Board closely oversaw the transition considerations and process for our Chief Financial Officer and Treasurer as well as General Counsel and Secretary, both of which were filled through internal promotions effective in the fourth quarter 2022. On February 8, 2023, Jay Farner provided notice to our Board that he would retire as Chief Executive Officer, effective June 1, 2023, and as Vice Chairman and member of our Board, effective immediately. On February 9, 2023, our Board appointed Bill Emerson as the Company’s interim Chief Executive Officer, effective on June 1, 2023. Our Board has commenced a search for a permanent Chief Executive Officer and has retained a leading firm to support its evaluation of internal and external candidates. In addition, on February 9, 2023, upon recommendation of our Nominating and Governance Committee, our Board elected Bill as a Class I director, to fill the seat on our Board vacated by Jay and to serve for a term expiring at the Company’s annual meeting of stockholders in 2024. | |
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| | | Rocket Companies • 2023 Proxy Statement | | | 36 of 120 | |
| | | | equitable leadership promotions. | | |
| | | | engagement and inclusion indices. | | |
| | | | Increase the number of new homes purchased by racially/ethically diverse clients to bridge the racial homeownership gap. | | |
| | | Rocket Companies • 2023 Proxy Statement | | | 37 of 120 | |
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| WHO WE ENGAGE WITH: Equity Stockholders Bond Investors Equity And Debt Research Analysts ESG Ratings Firms | | | HOW WE COMMUNICATE: Annual Report SEC Filings Proxy Statement ESG Report Investor Relations Website Investor Presentations Press Releases | | | HOW WE ENGAGE: Quarterly Earnings Calls Investor Conferences 1:1 And Group Meetings With Investors Annual Stockholder Meeting | |
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| | | Rocket Companies • 2023 Proxy Statement | | | 41 of 120 | |
| Name | | | | Fees Earned Or Paid In Cash ($)(1) | | | | Stock Awards ($)(2) | | | | All Other Compensation ($) | | | | Total ($) | | Name | | | | Fees Earned Or Paid In Cash ($)(1) | | | | Stock Awards ($)(2) | | | | All Other Compensation ($) | | | | Total ($) | |
| Dan Gilbert | | | | — | | | | — | | | | — | | | | — | | Dan Gilbert | | | | — | | | | — | | | | — | | | | — | |
| Jennifer Gilbert | | | | — | | | | — | | | | — | | | | — | | Jennifer Gilbert | | | | — | | | | — | | | | — | | | | — | |
| Jonathan Mariner | | | | 92,000 | | | | 109,584 | | | | — | | | | 201,584 | | Jonathan Mariner | | | | 80,000 | | | | 199,998 | | | | — | | | | 279,998 | |
| Matthew Rizik(3) | | | | — | | | | — | | | | 346,000 | | | | 346,000 | | Matthew Rizik(3) | | | | — | | | | 2,164,233 | | | | 346,000 | | | | 2,510,233 | |
| Suzanne Shank | | | | 92,000 | | | | 160,552 | | | | — | | | | 252,552 | | Suzanne Shank | | | | 80,000 | | | | 199,998 | | | | — | | | | 279,998 | |
| Nancy Tellem | | | | 98,000 | | | | 160,552 | | | | — | | | | 258,552 | | Nancy Tellem | | | | 92,000 | | | | 199,998 | | | | — | | | | 291,998 | |
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| | | JAY FARNER, Chief Executive Officer AGE: 50 JAY FARNER is our Chief Executive Officer. He previously served as Vice Chairman of our Board from March 2020 to February 2023. He also currently serves as the CEO of our subsidiary Rocket Central (previously Rock Central), a position he has held since January 2022. Effective June 1, 2023, Jay will retire from all positions with us and our subsidiaries. Prior to that, Jay was with Rocket Mortgage from 1996 until January 2022, and served as a senior leader since 1999. Immediately prior to his promotion to CEO of Rocket Mortgage in 2017, Jay served as President and Chief Marketing Officer of Rocket Mortgage. Jay also served as Chief Executive Officer of RHI until March 27, 2023, and as a director of RHI until March 24, 2023. Jay has also served as a board member or officer of certain of its affiliates including Rock Ventures. Jay serves as a board member of Detroit Labs, LLC, StockX, Bedrock Manufacturing, the Metropolitan Detroit YMCA, Bizdom Fund and the Rocket Giving Fund. Jay earned a bachelor’s degree in finance from Michigan State University. FAVORITE ISM: Every Client. Every Time. No Exceptions. No Excuses. | |
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| BOB WALTERS, President and Chief Operating Officer | FAVORITE ISM: Innovation Is Rewarded. Execution Is Worshipped. | | |
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| BRIAN BROWN, Chief Financial Officer and Treasurer | FAVORITE ISM: Numbers and Money follow; They Do Not Lead. | | |
| | | | TINA V. JOHN, General Counsel and Secretary AGE: 42 TINA V. JOHN is our General Counsel and Secretary. Tina has held these positions since October 2022. In these positions, Tina is responsible for the Company’s legal and compliance functions with a focus on securities and corporate governance matters. Previously, Tina served as our Deputy General Counsel and Assistant Secretary since September 2020. Before joining Rocket, Tina served as Senior Legal Counsel and then as Director, Assistant Corporate Secretary of a publicly-traded Ohio-based American lifestyle retailer from 2014 to September 2020. Tina began her legal career in private practice in 2007, beginning at Shearman & Sterling LLP and then at Vorys, Sater, Seymour and Pease LLP. Tina earned her bachelor’s degree from Barnard College, Columbia University, and a J.D. degree from the University of FAVORITE ISM: You’ll See It When You Believe It. |
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| Name | | | | | |
| Jay Farner(1) | | | | Chief Executive Officer and Vice Chairman of our Board | |
| Bob Walters | | | | President and Chief Operating Officer | |
| Brian Brown | | | | Chief Financial Officer and Treasurer (effective November 2022); Former Chief Accounting Officer | |
| Tina V. John | | | | General Counsel and Secretary (effective October 2022); Former Deputy General Counsel and Assistant Secretary | |
| Julie Booth | | | | Strategic Advisor (effective November 2022); Former Chief Financial Officer and Treasurer | |
| Angelo Vitale | | | | Of Counsel (effective October 2022); Former General Counsel and Secretary | |
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| | | Rocket Companies • 2023 Proxy Statement | | | 47 of 120 | |
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| Maintained base salaries in 2022, except for increases in connection with promotions | | | | No cash bonuses earned for 2022, except bonuses for promoted persons for time in prior roles | | | | Awarded RSUs to executive officers serving in March 2022; no equity awards were granted in 2021 Vest on each of the first three anniversaries of the grant date | |
| | | Rocket Companies • | | | |
WHAT WE DO
WHAT WE DON’T DO
COMPENSATION OBJECTIVES AND PHILOSOPHY The objective of our named executive officer compensation and benefits program is to establish and maintain a competitive total compensation program that will attract, motivate and retain the qualified and skilled talent necessary for our continued success. Our compensation structure for named executive officers is designed to give equity stakes, motivate them to achieve or exceed discretionary objectives and reward them for their achievements when those objectives are met. The overall level of total compensation for our named executive officers is intended to be reasonable and competitive, taking into account factors such as the individual’s experience, performance, duties and scope of responsibilities, prior contributions and future potential contributions to our business. Our compensation plans are designed to align with business strategies, taking into account external market conditions and internal equity issues. With these principles in mind, we structured our compensation programs to offer competitive total pay packages that we believe enable us to retain and motivate executives with the requisite skill and knowledge and to ensure the stability of the management team, which is vital to the success of our business. Brief descriptions of each principal element of our 2022 named executive officer compensation program are summarized in the following table and described in more detail below.
In addition, each of our named executive officers is party to an employment agreement that addresses specified compensation matters and, in certain cases, severance and change in control benefits. See “Named Executive Officer Compensation Tables” for additional information on such agreements.
In the first quarter of 2022, our Compensation Committee approved the continuation of base salaries and target bonuses in 2022, without change, for our then-named executive officers and Brian. In addition, our Board, upon recommendation from our Compensation Committee, approved the grant of RSUs to In connection with the promotions of Brian and Tina in 2022, our Compensation Committee approved increases in various elements of their compensation in the fourth quarter of 2022 and first quarter of 2023, as specified below. In the fourth quarter of 2022, our Compensation Committee approved new annual base salaries of $100,000 for Julie and Angelo, and confirmed their eligibility to participate in the Company’s discretionary Drive bonus program, in connection with their respective transitions to their new roles. CONTINUATION OF BASE SALARIES IN 2022; IMPACT OF MANAGEMENT TRANSITIONS We establish base salaries at levels intended to provide a stable level of minimum compensation to each named executive officer commensurate with each named executive officer’s role, experience and duties. In the first quarter of 2022, our Compensation Committee approved the same base salaries for the then-named executive officers and Brian for 2021 and 2022. Tina’s base salary also remained the same from 2021 until our Compensation Committee increased her base salary in connection with her promotion. Each of Julie and Angelo’s base salary was reduced by our The 2021 and 2022 base salaries of our named executive officers
(1) Effective Julie and Angelo’s annual base salaries were reduced to $100,000 effective November 15, 2022 and October 3, 2022, respectively.
CONTINUATION OF DISCRETIONARY BONUS PROGRAM; NO 2022 BONUSES PAID TO NAMED EXECUTIVE OFFICERS, EXCEPT LIMITED BONUSES FOR PRIOR ROLES Consistent with For Our Compensation Committee performed an evaluation of Company and individual performance for The target and earned cash bonus amounts for our named executive officers for
(1) Reflects a prorated target bonus for service as executive officer. (2) Prior to their promotions in 2022, Brian and Tina were participants in the Company’s discretionary Drive bonus utilized for many non-executive officer team members. Our Compensation Committee determined to pay them prorated bonuses in 2022 of $141,500 and $45,000, respectively, for performance prior to their promotions since Drive bonuses were paid in 2022. (3) Reflects prorated target bonuses for the portion of 2022 for which Julie served as Chief Financial Officer and Treasurer (until November 15, 2022) and the portion of 2022 for which Angelo served as General Counsel and Secretary (until October 3, 2022). ONE-TIME PROMOTION BONUS In October 2022, our Compensation Committee approved a one-time $325,000 cash bonus for Brian in connection with his promotion.
We use long-term incentives as a component of our named executive officers’ compensation by granting shares of our Class A common stock, RSUs and/or options to purchase shares of our Class A common stock. In connection with our IPO, we granted equity awards under the 2020 Omnibus Incentive Plan to our named executive officers consisting of RSUs and stock options. Due to the significant value of the IPO equity awards granted to our named executive officers, our Compensation Committee determined not to grant any equity awards to our named executive officers in 2021. In March 2022, our Compensation Committee recommended and our Board approved the following award of RSUs to
Tina was not serving as a named executive officer in March 2022 (2) Outstanding equity awards held by Julie and Angelo continue to vest as long as such officer remains employed by the Company or one of its subsidiaries. All RSUs are credited with dividend equivalent rights that are accrued and paid in cash at settlement following the vesting date. To the extent the RSUs vest, the cash amount paid is equal to the dividends declared per share of our 2022 EQUITY AWARDS – AMENDMENTS TO PRIOR AWARDS In January 2022, RHI RSUs that were granted to Brian on December 20, 2019 under the Rock Holdings Inc. 2015 Equity Compensation Plan (the “2019 RHI RSUs”) were amended to allow for cash settlement of the portion of such RHI RSUs that vested on October 31, 2021 but were not previously settled. The cash settlement amount of $1,340,000 was equal to the fair market value as of the vesting date of such RHI RSUs. In August 2022, Brian received 173,489 additional RSUs of the Company, which vest in equal installments on October 31, 2022 and 2023, in exchange for the cancelation of the 2019 RHI RSUs that would have vested on such dates. It was an economically neutral transaction, but allowed Brian to receive an award that would settle in shares of our Class A common stock, which was not available at the original time of issuance. The Company recorded no additional compensation expense in connection with such cancellation and issuance in accordance with accounting standards.
REASONABLE BENEFITS AND PERQUISITES We provide a number of benefit plans to all eligible team members, including our named executive officers. These benefits include programs such as medical, dental, life insurance, business travel accident insurance, short- and long-term disability coverage and a 401(k) defined contribution plan with matching contributions. While perquisites help to provide our named executive officers a benefit with a high perceived value at a relatively low cost, we do not generally view perquisites as a material component of our named executive officer compensation program. Role Of Compensation Committee And Management. Our Compensation Committee determines the compensation of our named executive For
Based on such considerations, we determined that the following companies were appropriate for purposes of benchmarking evaluating the competitiveness and reasonableness of our 2022 executive officer compensation program.
The changes to the peer group from 2021 to 2022 were made to align closer to our revenue base, to add new publicly traded companies and to remove companies that were no longer publicly traded. The new companies added to our 2022 peer group are noted in bold. The following companies were removed from our 2021 peer group: ANGI Homeservices Inc., CoreLogic, Inc., Frontdoor, Inc. and LendingTree, Inc. Our Compensation Committee intends to review and update the peer group periodically. Our Compensation In March 2021, we adopted stock ownership guidelines to further future alignment of the long-term interests of our executive officers and Non-Affiliated Directors with those of our stockholders. Our stock ownership guidelines generally require that Shares that count for purposes of ownership under the stock ownership guidelines include vested shares or units. Generally, each officer will have five years from the date he or she becomes subject to the guidelines to achieve compliance. Timing and Pricing of Equity Awards Our Compensation Committee does not coordinate the timing of equity grants with the release of material non-public information. Our Compensation Committee generally grants equity awards for executive officers on an annual basis in the first quarter of the year based upon a pre-determined schedule approximately a year in advance, and for new hires on an ad hoc basis around the hire date. Prohibition on Hedging and Pledging We prohibit or provide guidelines and limitations on our officers, directors and team members from engaging in certain securities transactions with respect to our securities. See “Board Matters – Insider Trading Policy – Addressing Pledging And Hedging Guidance” for discussion related to our Pledging and Hedging Guidance. Clawback Guideline Our Clawback Guideline allows the Company to seek recovery from executive officers if the Company must prepare an accounting restatement due to the material noncompliance with any financial reporting requirement under securities law as a result of any erroneously awarded incentive-based compensation. See “Board Matters – Oversight By Our Board Of Directors” for further discussion related to our Clawback Guideline.
PRELIMINARY 2023 COMPENSATION MATTERS In December 2022, our Compensation Committee approved base salaries and target bonuses as a percentage of base salary for our named executive officers for 2023. Our Compensation Committee determined to maintain base salaries and target bonuses for Jay and Bob and, effective January 1, 2023, to increase Brian’s and Tina’s base salaries to $500,000 and $450,000, respectively, and to increase Brian’s target bonus to 75%, effective January 1, 2023, in connection with Brian’s and Tina’s recent promotions. Our Compensation Committee also confirmed its intent to have long-term equity be a material component of future compensation. Our Compensation Committee recommended and, in March 2023, our Board approved the award of RSUs to each of our named executive officers that vest in equal installments on each of the first three anniversaries of the grant date. The grant values for the 2023 awards of $3,000,000 for Bob, $2,250,000 for Brian and $1,750,000 for Tina were determined based on benchmarking long-term equity incentive awards between the 25th and 50th percentiles of our peer group. For Bob, such amount is equal to the grant value he received in 2022. Due to Jay’s announced retirement, he did not receive a 2023 award. In February 2023, our Compensation Committee approved a base salary for Bill as our interim Chief Executive Officer in the amount of $600,000, effective June 1, 2023. Bill also will be eligible for a target bonus of 100% of his base salary for 2023. In addition, Bill received a grant of RSUs with a grant value of $6,000,000 on March 3, 2023, which will vest in equal installments on each of the first three anniversaries of the date of the grant. Bill entered into an employment agreement and indemnification agreement with the Company, each substantially in the form used with other Company executives. Our Compensation Committee intends to periodically re-evaluate the design of its equity awards after the Company has additional experience as a public company in setting strategic financial and operating metrics for incentive purposes, adapting to the volatility of stock price performance and evaluating the perspective of key long-term stockholders.
TAX CONSIDERATIONS For income tax purposes, public companies may not deduct any portion of compensation that is in excess of $1 million paid in a taxable year to certain covered employees, including our named executive officers, under Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code). Even if Section 162(m) of the Code were to apply to compensation paid to our named executive officers, our Board believes that it should not be constrained by the requirements of Section 162(m) of the Code if those requirements would impair flexibility in compensating our named executive officers in a manner that can best promote our corporate objectives. We intend to continue to compensate our executive officers in a manner consistent with the best interests of our stockholders and reserve the right to award compensation that may not be deductible under Section 162(m) where the Company believes it is appropriate to do so. Section 409A of the Code requires that nonqualified deferred compensation be deferred and paid under plans or arrangements that satisfy the requirements of the statute with respect to the timing of deferral elections, timing of payments and certain other matters. Failure to satisfy these requirements can expose team members and other service providers to accelerated income tax liabilities, penalty taxes and interest on their vested compensation under such plans. Accordingly, as a general matter, it is our intention to design and administer our compensation and benefits plans and arrangements for all of our team members and other service providers, including our named executive officers, so that they are either exempt from, or satisfy the requirements of, Section 409A.
Our Compensation Committee has reviewed and discussed the CD&A in this proxy statement with management. Based on such review and discussion, our Compensation Committee recommended to our Board that the CD&A be included in the Company’s annual report on Form 10-K for the year ended December 31, Compensation Committee Dan Gilbert Matthew Rizik, Chair Nancy Tellem
During Dan, Bill, Matthew and Jay have served, and Dan, Bill and Matthew are currently serving, in various director, executive and employment roles for RHI and certain of its affiliates. See “Board Matters – Director Background And Qualifications” and “Executive Officers” for additional biographical information. Dan and RHI, our principal stockholder that is controlled by Dan, hold all of our issued and outstanding Class D common stock and control 79% of the combined voting power of our common stock as of the record date. Accordingly, RHI and Dan Gilbert control our business, policies and affairs and can control any action requiring the general approval of our stockholders. Dan, Bill and Matthew are not independent directors, and Jay was not an independent director, as such term is defined by the applicable rules and regulations of the NYSE and do not qualify as independent in accordance with the additional independence rules established by the SEC and the NYSE for our Compensation Committee. As a controlled company, we are not required to establish a compensation committee composed entirely of independent directors. See “Certain Relationships and Related Person Transactions” for more information on the transactions and relationships between the Company, Dan and the RHI Affiliated Entities.
SUMMARY COMPENSATION TABLE FOR 2022, 2021 The following table shows the compensation earned by our named executive officers for the years ended December 31, 2022, 2021
(1) (2) The dollar values shown reflect the grant date fair value of RSU awards granted under our 2020 Omnibus Incentive Plan in accordance with ASC Topic 718. The grant date fair value is calculated as of the closing price of our Class A common stock as quoted on NYSE on the grant date (plus $1.01 per share for the special dividend effective shortly following the grant date) multiplied by the number of shares subject to the award. For Brian, the dollar value also includes the incremental fair value recognized as accounting expense by the Company in its consolidated financial statements under ASC 718 in connection with the January 2022 amendment to the 2019 RHI RSUs (the “January 2022 Amendment”), which equaled $880,000 and was calculated based on the settlement value less the initial grant date value. (3) The amounts reported in this column for all named executive officers for
GRANTS OF PLAN-BASED AWARDS IN
(1) Represents grants of RSUs that vest in equal installments on each of the first three anniversaries of the grant date. (2) Represents the incremental fair value recognized as accounting expense by the Company in 2022 in the Company’s consolidated financial statements under ASC 718 in connection with the January 2022 Amendment to allow for cash settlement of the portion of RHI RSUs that vested in October 2021 but were not previously settled. The January 2022 Amendment was approved by the Board of Directors of RHI. (3) This RSU award vests in two equal installments on each of October 31, 2022 and October 31, 2023. The RSUs were granted in exchange for the cancellation of the 2019 RHI RSUs that would have vested on such dates. The Company recorded no additional compensation expense in connection with the cancellation and issuance in accordance with ASC 718. (4) The grant date fair value per share was $12.30 on March 7, 2022 (the closing price per share of the Company’s Class A common stock on the NYSE on such dates), plus $1.01 per share for the special dividend effective shortly following the grant date. NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE As a newly formed company immediately prior to our IPO on August 10, 2020, we did not have executive officers for In connection with our IPO in 2020, Jay, Julie, Brian and Angelo entered into employment agreements with Holdings, and Bob entered into an employment agreement with Rocket Mortgage. In each case, these agreements were effective as of the
In connection with their promotions in 2022, Brian entered into an amendment to his employment agreement with Holdings to reflect his appointment as Chief Financial Officer and Treasurer effective November 15, 2022, and Tina entered into an employment agreement with Holdings effective October 3, 2022. Pursuant to each employment agreement, such named executive officers are paid an annual base salary and are eligible to receive an annual bonus based on the satisfaction of business objectives and/or other criteria as determined in the sole discretion of our Compensation Committee. The employment agreements also include post-termination restrictive covenant provisions, including perpetual non-disclosure of confidential information, non-competition for 18 months, non-solicitation of employees’ customers, clients and vendors for 18 months and perpetual non-disparagement covenants. See “– Potential Payments Upon Termination of Employment or Change in Control of the Company” for a description of the potential payments and benefits payable to our named executive officers following a termination under their employment agreements and otherwise. ANNUAL DISCRETIONARY CASH BONUSES For the annual discretionary cash bonus, there were no pre-set performance goals that were required to be satisfied. Therefore, such amounts are included in the Bonus column of the Summary Compensation Table. For 2022, there were no annual discretionary bonuses that were earned in connection with service as an executive officer. The milestone payment and gift for Bob was paid in January 2022. Brian and Tina earned discretionary Drive bonuses in connection with their service prior to their 2022 promotions, prorated for the time spent in such prior roles in 2022; such bonuses were paid in February 2023. The one-time promotion bonus for Brian was paid in October 2022. For 2021, the amounts reported in the Bonus column represent annual discretionary cash bonuses for such year, paid in the first quarter of 2022. For 2020, the amounts reported in the Bonus column represent annual discretionary cash bonuses for such year, paid in the first quarter of 2021. In addition, for Jay Farner, the Bonus column also includes $28,938,378, reflecting cash payments in the first half of 2020 (before our IPO) equal to withholding taxes payable by him in connection with the vesting and settlement of the final tranches of a 2017 RSU award from RHI (the Company’s principal stockholder), which payment RHI had agreed to make in 2017. The tax withholding payment is reported in the Summary Compensation Table because such payment is compensation for services to our business, as reflected in our audited financial statements. No further payments are due under this agreement. EQUITY AWARDS For
For 2020, the amounts reported in the Stock Awards and Option Awards columns reflect the grant date fair value of RSU awards and option awards granted on August 5, 2020, the effective date of the registration statement for our IPO, under our 2020 Omnibus Incentive Plan. With respect to such IPO equity awards, the RSUs vest in three equal installments on each of the first three anniversaries of the grant date, and the stock options vest as to 33.33% on the first anniversary of the grant date and monthly thereafter over the next 24 months, subject in all cases to continued employment on the applicable vesting date.
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, The following table provides information about the outstanding Company equity awards held by our named executive officers as of December 31,
(1) Each of these stock option awards vests as to 33.33% on the first anniversary of the grant date and monthly thereafter over the next 24 months. (2) Each of these RSU awards vests in three equal installments on each of the first three anniversaries of the grant date. (3) (4) Represents the sum of (a) the product of (i) $7.00 (which was the closing price of the Company’s Class A common stock on the NYSE on December 30, 2022, the last trading day of 2022) and (ii) the number of shares of Class A common stock underlying the RSUs, and (b) the cash dividend equivalents related to such RSUs. As of December 31, (5) Outstanding equity awards held by Julie and Angelo continue to vest as long as such officer remains employed by the Company or one of its subsidiaries.
OPTION EXERCISES AND STOCK VESTED IN The following table sets forth information regarding the value realized by each of our named executive officers on the vesting of stock awards in
(1) Based on the number of RSUs vested multiplied by the closing price of the Company’s Class A common stock on the NYSE on the vesting
POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL OF THE COMPANY The award agreements for the RSU and option awards granted in connection with our IPO and the award agreements for the RSU awards granted in 2022 provide that in the event of a Change in Control, the awards will, to the extent unvested, become immediately vested and settled or exercisable, respectively, if either (a) the officer’s employment is terminated by the Company without Cause or by the officer for Good Reason within 18 months following the effective date of the Change in Control or (b) if the RSU or option awards are not continued, assumed or substituted. The award agreements also include restrictive covenants (non-competition and non-solicitation) and confidentiality protections for specified periods, and the awards will be immediately forfeited if any such provision is violated. The August 2022 RSU award agreements also provide that in the event of a Change in Control of RHI (as defined in the Rock Holdings Inc. 2015 Equity Compensation Plan), the awards will, to the extent unvested, become immediately vested and settled. In December 2020, upon recommendation of our Compensation Committee, our Board determined to modify the equity awards granted in connection with our IPO, including the awards to our named executive officers, to provide for immediate vesting of the unvested portion of the RSU or stock option award at the time of termination of employment due to death or disability, with the stock option award remaining exercisable until the earlier of one year following such termination and the expiration date of the stock option. The RSUs granted in 2022 also provide for immediate vesting of the unvested portion of the RSU at the time of termination of employment due to death or disability. All RSUs are credited with dividend equivalent rights that are accrued and paid in cash at settlement following the vesting date. To the extent the RSUs vest, the cash amount paid is equal to the dividends declared per share of our Class A common stock over the vesting period, multiplied by the number of vested RSUs. No dividends are paid on unvested RSUs. Cause means: • The officer’s conviction of, or entry of a plea of no contest to a felony; • The officer’s gross negligence or willful misconduct, or a willful failure to attempt in good faith to substantially perform his or her duties; • The officer’s material breach of a material provision of an employment agreement or offer letter or any non-competition, non-disclosure or non-solicitation agreement; • The officer’s material violation of the Company’s material written policies; • The officer’s fraud or misappropriation, embezzlement or material misuse of the Company’s funds or property; or • Willful or reckless misconduct in respect of the officer’s obligations to the Company or its affiliates or other acts of misconduct by the officer occurring during the course of the officer’s employment or service that results in or could reasonably be expected to result in material damage to the Company’s property, business or reputation.
Good Reason means, absent the officer’s written consent: • A material diminution in the officer’s authority, duties or responsibilities; • A material diminution in the officer’s base salary other than a general reduction in base salary that affects all similarly situated team members; or • A relocation of the officer’s principal place of employment by more than 50 miles from the officer’s current principal place of employment, unless the new principal place of employment is closer to the officer’s home address or the position is virtual. Change in Control means the first to occur of any of the following events: • The acquisition by any person or group, or persons acting jointly or in concert, of beneficial ownership of 50% or more of the combined voting power of the outstanding voting securities of the Company entitled to vote in the election of directors (the “Outstanding Company Voting Securities”), excluding any acquisition by the Company or any of its affiliates, Permitted Holders • A change in the composition of our Board such that members of our Board during any consecutive • The approval by the stockholders of the Company of a plan of complete dissolution or liquidation of the Company; and • The consummation of a reorganization, recapitalization, merger, amalgamation, consolidation, statutory share exchange or similar form of corporate transaction involving the Company, or sale, transfer or other disposition of all or substantially all of the business or assets of the Company to an entity that is not an affiliate of the Company or Permitted Holders, unless immediately following such business combination or sale: (A) The Outstanding Company Voting Securities that were outstanding immediately prior to such business combination or sale (or Shares into which the Outstanding Company Voting Securities were converted) represent more than 50% of the total voting power of the entity resulting from such business combination or the acquiring entity in such sale (in either case, the “Surviving Company”), or the ultimate parent entity that has beneficial ownership of sufficient voting power to elect a majority of our board of directors of the Surviving Company (the “Parent Company”), and such voting power among the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to such business combination or sale; and (B) No Permitted Holders means each of: • Dan Gilbert, his spouse, children, lineal descendants or the estates, heirs, executors, personal representatives, successors or administrators, or any trust established for the benefit of (or any charitable trust or non-profit entity established by) any such Gilbert family member, or any trustee, protector or similar person of such trust or non-profit entity or any person controlling, controlled by or under common control with any such person;
• Jay Farner, his • RHI and any of its subsidiaries; • Any person who is acting solely as an underwriter in connection with a public or private offering of equity interests of the Company or any of its direct or indirect parent companies, acting in such capacity; and • Any group the members of which include any of the Permitted Holders specified in clauses (i), (ii) and (iii) that hold or acquire beneficial ownership of the voting stock of the Company so long as (1) each member has voting rights proportional to the percentage of ownership interests held or acquired by such member (or more favorable voting rights, in the case of any Permitted Holders specified in clauses (i), (ii) and (iii)) and (2) no person or other group beneficially owns more than 50% on a fully diluted basis of the voting stock held by the Permitted Holder group. EMPLOYMENT AGREEMENTS In connection with our IPO in 2020, Jay, Julie, Brian and Angelo entered into employment agreements with Holdings, and Bob entered into an employment agreement with Rocket Mortgage. In each case, these agreements were effective as of the Effective Date of our IPO. In connection with their promotions in 2022, Brian entered into an amendment to his employment agreement with Holdings to reflect his appointment as Chief Financial Officer and Treasurer effective as of November 15, 2022, and Tina entered into an employment agreement with Holdings effective October 3, 2022. In the fourth quarter of 2022, Julie and Angelo entered into amendments to their employment agreements with Holdings reflecting their strategic advisor and of counsel roles. Other than as set forth below, such employment agreements do not include severance or change in control benefits. Tina’s employment agreement provides for a severance payment equal to 75% of the sum of her base salary and target bonus, subject to signing a general release of claims, in the event of her termination without Cause, elimination of her role or her resignation for Good Reason, in each case, within 18 months following a Change in Control or a take-private transaction that results in our Class A common stock no longer being publicly traded. The following table estimates the total value of unvested equity awards held by our named executive officers that will be accelerated upon the following events, in each case, assuming such events occur on December 31, • Termination of employment due to death or disability; or • A Change in Control in which the RSU and option awards are not continued, assumed or substituted, or a Change in Control within 18 months of termination of the officer’s employment by the Company without Cause or by the officer for Good Reason. These estimates do not reflect the actual amounts that would be paid to such persons, which would only be known at the time that they become eligible for payment and would only be payable if the specified event occurs. For purposes of the table, we calculated the intrinsic value of acceleration of the vesting of equity awards as follows: • For RSUs, the number of RSUs accelerated multiplied by the closing price of the Class A common stock on the NYSE on December
• For stock options, the number of stock options accelerated multiplied by the difference between (A) the closing price of the Class A common stock on the NYSE on December
The value of the RSUs also include the dividend equivalent rights that are settled in cash upon the vesting and settlement of the RSUs.
In addition to the amounts noted above, Tina would have received an additional severance payment of $393,750, representing 75% of the sum of her base salary and target bonus, in the event of the following terminations as of December 31, 2022: her termination without Cause, elimination of her role or her resignation for Good Reason, in each case, within 18 months following a Change in Control or a take-private transaction that results in our Class A common stock no longer being publicly traded. The lump sum severance benefit in Angelo’s employment agreement was no longer applicable as of December 31, 2022.
PAY VERSUS PERFORMANCE The following information about the relationship between executive compensation actually paid (CAP) and certain financial performance of the Company is required by Item 402(v) of Regulation S-K. The disclosure in this “Pay Versus Performance” section does not reflect our Compensation Committee’s process for compensation setting and should be read in connection with the “Compensation Discussion And Analysis” section of this proxy statement, which contains important information regarding our compensation philosophy, objectives and design, compensation-setting process and named executive officer compensation program components. The SEC-defined CAP data set forth in the table below also does not reflect amounts actually realized by our named executive officers, and our Compensation Committee has not used or considered CAP previously in establishing the named executive officer compensation program. A significant portion of the CAP amounts shown relate to changes in values of unvested awards over the course of the reporting year. These unvested awards remain subject to forfeiture conditions and possible future declines in value based on changes in our stock price during the vesting period. The ultimate values actually realized by our named executive officers from unvested equity awards, if any, will not be determined until the awards fully vest. PAY VERSUS PERFORMANCE TABLE
(1) The amounts reported in this column represent the amounts reported in the “Total” column of the Summary Compensation Table for Jay for each corresponding year. See “Named Executive Officer Compensation Tables – Summary Compensation Table for 2022, 2021 and 2020”. (2) The amounts reported in this column represent CAP for Jay for each corresponding year computed as required by Item 402(v) of Regulation S-K. The reported amounts do not reflect the actual compensation earned by or paid to Jay during any applicable year. To determine CAP, the adjustments below were made to Jay’s total compensation. Defined benefit and actuarial pension plan adjustments were not relevant for any applicable year.
(a) The amounts reported in this column represent the grant date fair value of all equity awards granted in the applicable year, which is the sum of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for such year. No equity awards were granted to Jay in 2021. (b) The amounts reported in this column represent the equity award adjustments required by Item 402(v) of Regulation S-K, which include: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted in the applicable year and vest in the same year, the fair value
as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change in fair value from the end of the prior year to the vesting date; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The fair values of RSUs included in the CAP for our PEO and the Average CAP for our other NEOs are calculated at the required measurement dates, consistent with the approach used to value the awards at the grant date as described in our Annual Report on Form 10-K for 2022. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. Any changes to the RSU fair values from the grant date (for current year grants) and from prior year-end (for prior year grants) are based on our updated stock price at the respective measurement dates. Accordingly, the amounts deducted or added in calculating the equity award adjustments for Jay are as follows:
(3) The amounts reported in this column represent the average of the amounts reported for the Company’s named executive officers as a group (excluding Jay) in the “Total” column of the Summary Compensation Table in each applicable year. Our named executive officers (excluding Jay) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2022, Bob Walters, Brian Brown, Tina V. John, Julie Booth and Angelo Vitale; and (ii) for 2021 and 2020, Bob, Julie and Angelo. (4) The dollar amounts reported in this column represent the average CAP for the named executive officers as a group (excluding Jay), for each corresponding year computed as required by Item 402(v) of Regulation S-K. The reported amounts do not reflect the actual compensation earned by or paid to the named executive officers as a group (excluding Jay) during any applicable year. To determine CAP, the adjustments below were made to the average total compensation for the named executive officers as a group (excluding Jay), using the same methodology described above in Note 2. Defined benefit and actuarial pension plan adjustments were not relevant for any applicable year, and no equity awards were granted to our named executive officers in 2021.
(a) The amounts deducted or added in calculating the total average equity award adjustments are as follows:
(i) For 2022, includes for Brian Brown, the fair value of the modified 2019 RHI RSU at the date of modification less the fair value of the original 2019 RHI RSU on December 31, 2021. (5) The cumulative TSR depicts a hypothetical $100 investment in our common stock. The amounts reported in this column represent the Company’s cumulative TSR, which is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end of the measurement period by the Company’s share price at the beginning of the measurement period (the closing price as of initial post-IPO trading date). (6) The cumulative TSR depicts a hypothetical $100 investment in our common stock. For 2020 and 2021, the Company utilized the Dow Jones U.S. Mortgage Finance Index (DJSUMF), and the dollar value in this column for such years reflect the TSR for such index. For 2022, the Company utilized a selected peer group for purposes of its TSR benchmarking (the “PVP Peer Group”). The PVP Peer Group TSR for 2020 and 2021 was $177.44 and $63.89, respectively. We changed the presentation of our performance graph from the DJSUMF to our selected peer group because we believe that the companies included in our selected peer group are more comparable to us by industry, size and market capitalization, and we intend to continue to utilize a selected peer group on a go-forward basis. Our PVP Peer Group is comprised of PennyMac Financial Services Inc, Rithm Capital Corp, Mr Cooper Group Inc, Anywhere Real Estate Inc., Zillow Group Inc Class C, Redfin Corp, Stewart Information Services Corp, SoFi Technologies Inc, Guild Holdings Company, Compass, Inc. loanDepot, Inc., UWM Holdings Corporation, Home Point Capital Inc., and Blend Labs, Inc. Certain companies were not publicly traded companies at inception date, and these companies were added and reweighted to the peer group to the most recent quarter subsequent to their respective IPO dates. (7) The amounts reported in this column represent net income reflected in the Company’s audited financial statements for the applicable year.
NO FINANCIAL PERFORMANCE MEASURES As described in more detail under “Compensation Discussion And Analysis,” the Company’s executive compensation program consists of base salary, an annual discretionary cash bonus, equity-linked compensation that vests based on continued service and broad-based team member health and welfare programs and retirement benefits. The Company did not use any financial performance measures as part of its cash bonus program or equity awards for 2022 since the 2022 cash bonus program was fully discretionary and the equity awards granted to our named executive officers in 2022 were comprised entirely of time-based RSUs. In setting compensation for each of our named executive officers, our Compensation Committee considers such officer’s annual performance (assessed by our Compensation Committee for Jay and presented by Jay to our Compensation Committee for our other named executive officers), which takes into account overall Company performance. Also, annual cash bonuses are earned and paid in the discretion of our Compensation Committee following an evaluation of Company and individual performance for the year. While such assessments consider overall Company financial performance for the year, the Company does not use or consider any specific financial performance measure to link executive CAP to Company performance and, therefore, has not disclosed a Company-Selected Measure in the Pay Versus Performance Table above, presented the relationship of such Company-Selected Measure to CAP or presented a tabular list of the most important of such financial performance measures, in each case, as permitted by Item 402(v) of Regulation S-K. ANALYSIS OF THE INFORMATION PRESENTED IN THE PAY VERSUS PERFORMANCE TABLE Our Compensation Committee believes that our named executive officer compensation program is designed to give equity stakes, motivate our named executive officers to achieve or exceed discretionary objectives and reward them for their achievements when those objectives are met through the use of a discretionary cash bonus program and equity awards. Our Compensation Committee has not used or considered CAP previously in establishing the named executive officer compensation program. The Company is providing the following graphs of the relationships between the information presented in the Pay Versus Performance Table in accordance with Item 402(v) of Regulation S-K. CAP for our PEO and other named executive officers were significantly impacted by our equity grant practices to such persons – in 2020, there were significant IPO-related equity awards; in 2021, there were no equity awards; and in 2022, there were our initial annual equity awards.
CAP and Cumulative TSR The CAP for our PEO and the average CAP for the other named executive officers as a group for 2020, 2021 and 2022 is presented in comparison to our cumulative TSR for such years in the table below.
CAP and Net Income The CAP for our PEO and the average CAP for the other named executive officers as a group for 2020, 2021 and 2022 is presented in comparison to our net income for such years in the table below.
Cumulative TSR of the Company and Cumulative TSR of the Peer Groups The following graph shows the relationship of the Company’s cumulative TSR compared to the PVP Peer Group. The DJUSMF Index was utilized as a peer group prior to 2022 and is included here for reference purposes as required. This Pay Versus Performance section is not “soliciting material,” is not deemed filed with the SEC and is not to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this proxy statement and irrespective of any general incorporation language therein.
CEO PAY RATIO We are required to calculate and disclose the annual total compensation paid to our median employee, as well as the ratio of the annual total compensation paid to the median employee as compared to the annual total compensation paid to our CEO. The following describes our methodology for identifying and calculating the total compensation paid to our median employee and the resulting CEO pay ratio. After applying the methodology described below, we concluded that our median employee in This information is being provided for compliance purposes only. Neither During 2022, there were changes in our employee population or employee compensation arrangements that we believed would significantly impact our pay ratio disclosure. Consequently, we identified a new median employee for 2022. We identified the median employee using a measurement date of December 31, The applicable rules require us to identify the median employee by use of a “consistently applied compensation measure,” or CACM. For
POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS We have adopted a written Related Person Transaction Policy (the “RPT policy”), which addresses the review, approval, ratification and disclosure of all related person transactions by our Audit Committee (or other specified persons). In accordance with the RPT policy, our Audit Committee has overall responsibility for the implementation of, and compliance with, the RPT policy. Our Audit Committee approved updates to the RPT policy in 2021 to revise certain pre-approval categories and dollar thresholds and to conform to revised NYSE requirements. For purposes of the RPT policy, a related person transaction is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we were, are or will be a participant and in which any related person (as defined in the RPT policy) had, has or will have a direct or indirect material interest. A related person transaction does not include any employment relationship or transaction involving an executive officer and any related compensation resulting solely from such employment relationship or transaction that has been disclosed pursuant to Item 402 of Regulation S-K of the Exchange Act. The RPT policy requires that notice of a proposed related person transaction be provided to our legal department prior to entry into such transaction. If our legal team determines that such transaction is a related person transaction (and not subject to the specified pre-approved exceptions approved by our Audit Committee, as discussed below), the proposed transaction will be submitted for consideration (a) to our Audit Committee at its next meeting, (b) if not practicable or desirable to wait until the next Audit Committee meeting, to the Chair of our Audit Committee, or (c) to a different group of independent directors as determined by our Board (each, an “RPT Approval Person”). An RPT Approval Person may approve only those related person transactions that are in, or not inconsistent with, our best interests and the best interests of our stockholders. In the event that we become aware of a related person transaction that has not been previously reviewed, approved or ratified under the RPT policy and that is ongoing or is completed (including any transaction that was not considered a related person transaction at the time it was entered into, but subsequently is), the transaction will be submitted to an RPT Approval Person so that it may determine whether to continue, modify or terminate the related person transaction. The RPT policy also provides that our Audit Committee/an RPT Approval Person review certain previously approved or ratified related person transactions that are ongoing and have a remaining term of more than twelve months to determine whether the related person transaction remains in our best interests and the best interests of our stockholders. Additionally, we will make periodic inquiries of directors and executive officers with respect to any potential related person transaction of which they may be a party or of which they may be aware. The RPT policy provides that any related person transactions that do not exceed $120,000 in the aggregate in any fiscal year will be deemed pre-approved. In addition, each of the following related person transactions will be deemed pre-approved or ratified by our Audit Committee under the terms of the RPT policy, even if the aggregate amount involved will exceed $120,000, which are reported to • Any transaction where the related person’s interest derives solely from his or her position as a director of another corporation or organization that is a party to the transaction; • Any transaction involving a related person or associated entity where the rates or charges involved are determined by competitive bids;
• If previously approved by our Board or a Committee, any transaction or decision that involves providing compensation or benefits to a director or executive officer of the Company or any of its subsidiaries in connection with such director’s or executive officer’s duties with the Company or its subsidiaries or the hiring, promotion or retention of any such director or executive officer; • Any transaction where the related person’s interest arises solely from the ownership of the Company’s common stock and all holders of the Company’s common stock received the same benefit on a pro rata basis (e.g. dividends, stock repurchases, rights offerings); • Any indemnification payments or advancement of expenses made to a related person pursuant to the Company’s certificate of incorporation, bylaws or an agreement approved by our Board; • Transactions involving a related person that (i) occur in the ordinary course of business, (ii) are on terms that are comparable to the terms available to an unrelated third party or to team members generally, (iii) have fees (or revenue, as applicable) for any single related person transaction that will not exceed $1,000,000 annually; and (iv) can be generally categorized into one or more of the following descriptions of services or goods: ◦ Professional services provided by Company subsidiaries to related persons, including technology services, information security services and support, human resources services, legal services, data governance and analytics, advisory services, the procurement of goods, services and materials, including vendor engagement and risk management, accounting and finance services, marketing services and telemarketing services, and associated third-party costs, deliverables fees and special event charges; ◦ Transactions involving the receipt of professional services including, consultant and advisory services, physical security services, design services and video production services; ◦ Transactions involving the receipt of technology services, including website and application development, use of technology platforms, technology training and training products, data protection services, discover analytics and data strategy services, data source support and technical support services; ◦ Transactions pertaining to advertising, marketing placement services, online contest and events sweepstakes, sponsorships and naming rights with related persons; ◦ Transactions involving the purchase of meals and catering services, event venue rental, hotel guest rooms and venue rental, purchase of branded or luxury goods for Company team members, and the procurement of goods associated with services provided to the Company; ◦ The Company may provide or facilitate elective benefits involving related persons for team members including such benefit resources as childcare, wellness centers and virtual tutoring programs; ◦ The Company may share team members between related persons as necessary to perform business operations, with the fees to be equivalent to the allocated cost of the team members involved; and ◦ Any real estate related transaction involving a related person where the transaction can be generally categorized into the following transaction types: (i) direct leases of space for operations; (ii) subleasing of the Company’s space to related persons; (iii) construction management or consulting services; (iv) procurement of parking spaces; and (v) other landlord services and fees including building utilities, HVAC, common area maintenance, maintenance fees including landlord labor and direct pass-through expenses, and other landlord service fees in coordination with existing lease agreements. In addition to requirements under the RPT policy, the Company has internal related person transaction identification and assessment procedures to ensure appropriate monitoring and reporting of related person transactions. These procedures are managed by team members in our finance and legal departments.
RELATED PERSON TRANSACTIONS The following is a description of related party transactions in existence since the beginning of RHI, our principal stockholder, is the controlling majority stockholder of several other businesses, including a technology services provider (Detroit Labs) and the preeminent online dictionary (Dictionary.com). Our executive officers and directors who are affiliated with RHI own common equity interests in RHI. Dan Gilbert, our founder and Chairman, is the majority stockholder of RHI and serves as the CEO and President of RHI and as the chairman of RHI’s board of directors. Jay Farner, our Chief Executive Officer and former Vice Chairman of our Board In addition to RHI, Dan is the majority or controlling shareholder of a number of other entities with which we have historically entered into transactions and agreements, including the NBA’s Cleveland Cavaliers, the real estate investment firm Bedrock and the unicorn online startup StockX. For more information on Dan, see “Board Matters – Director Background And Qualifications.” In connection with the reorganization transactions, the Company, Holdings, RHI and Dan Gilbert entered into the Amended and Restated RKT Holdings Operating Agreement (the “Holdings Operating Agreement”). In accordance with the terms of the Holdings Operating Agreement, we operate our business through Holdings and its subsidiaries. Pursuant to the terms of the Holdings Operating Agreement, so long as affiliates of RHI and its related parties continue to own any Holdings Units, shares of our Class A common stock or securities exchangeable or convertible into shares of our Class A common stock, we will not, without the prior written consent of such holders, (i) engage in any business activity other than the management and ownership of Holdings and its subsidiaries or (ii) own any assets other than securities of Holdings and its subsidiaries and/or any cash or other property or assets distributed by or otherwise received from Holdings and its subsidiaries, unless we determine in good faith that such actions or ownership are in the best interest of Holdings. As the sole managing member of Holdings, we have control over all of the affairs and decision making of Holdings. As such, through our officers and directors, we are responsible for all operational and administrative decisions of Holdings and the The holders of Holdings Units will generally incur U.S. federal, state and local income taxes on their proportionate share of any net taxable income of Holdings. Net profits and net losses of Holdings will generally be allocated to its members pro rata in accordance with the percentages of their respective ownership of Holdings Units, though certain non-pro rata adjustments will be made to reflect tax depreciation, amortization and other allocations. The
Holdings Operating Agreement provides for cash distributions to the holders of Holdings Units for purposes of funding their tax obligations in respect of the taxable income of Holdings that is allocated to them. Under the Holdings Operating Agreement, these tax distributions will be computed based on Holdings’ estimate of the net taxable income of Holdings allocable per Holdings Units multiplied by an assumed tax rate equal to the highest effective marginal combined U.S. federal, state and local income tax rate prescribed for an individual or corporate resident in Michigan, New York City or California (taking into account the non-deductibility of certain expenses and the character of our income). Future tax distribution calculations may be adjusted based on changes in relevant tax laws. The Holdings Operating Agreement provides that, except as otherwise determined by us, if at any time we issue a share of our Class A common stock or Class B common stock, other than pursuant to an issuance and distribution to holders of shares of our common stock of rights to purchase our equity securities under a “poison pill” or similar stockholders rights plan or pursuant to an employee benefit plan, the net proceeds received by us with respect to such share, if any, will be concurrently invested in Holdings (unless such shares were issued by us solely to fund (i) our ongoing operations or pay our expenses or other obligations or (ii) the purchase Holdings Units from a member of Holdings (in which case such net proceeds will instead be transferred to the selling member as consideration for such purchase)) and Holdings will issue to us Holdings Units. Similarly, except as otherwise determined by us, Holdings will not issue any additional Holdings Units to us unless we issue or sell an equal number of shares of our Class A common stock or Class B common stock. Conversely, if at any time any shares of our Class A common stock or Class B common stock are redeemed, repurchased or otherwise acquired, Holdings will redeem, repurchase or otherwise acquire an equal number of Holdings Units held by us, upon the same terms and for the same price per security, as the shares of our Class A common stock or Class B common stock are redeemed, repurchased or otherwise acquired. In addition, Holdings will not affect any subdivision (by any unit split, unit distribution, reclassification, reorganization, recapitalization or otherwise) or combination (by reverse unit split, reclassification, reorganization, recapitalization or otherwise) of the Holdings Units unless it is accompanied by substantively identical subdivision or combination, as applicable, of each class of our common stock, and we will not affect any subdivision or combination of any class of our common stock unless it is accompanied by a substantively identical subdivision or combination, as applicable, of the Holdings Units. Subject to certain exceptions, Holdings will indemnify all of its members, and their officers and other related parties, against all losses or expenses arising from claims or other legal proceedings in which such person (in its capacity as such) may be involved or become subject to in connection with Holdings’ business or affairs or the Holdings Operating Agreement or any related document. Holdings may be dissolved only upon the first to occur of (i) the sale of substantially all of its assets or (ii) as determined by us. Upon dissolution, Holdings will be liquidated and the proceeds from any liquidation will be applied and distributed as follows: (a) first, to creditors (including creditors who are members or affiliates of members) in satisfaction of all of Holdings’ liabilities (whether by payment or by making reasonable provision for payment of such liabilities, including the setting up of any reasonably necessary reserves); and (b) second, to its members in proportion to their Holdings Units (after giving effect to any obligations of Holdings to make tax distributions). At the closing of our IPO, we entered into an Exchange Agreement (the “Exchange Agreement”) with RHI and Dan Gilbert, pursuant to which each of RHI and Dan Gilbert (or certain transferees thereof) has the right to exchange its or his Holdings Units (along with corresponding shares of our Class D common stock or Class C common stock),
for, at our option (as the sole managing member of Holdings), (i) shares of our Class B common stock or Class A common stock, as applicable, on a one-for-one basis or (ii) cash from a substantially concurrent public offering or private sale (based on the price of our Class A common stock in such public offering or private sale), subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. The Exchange Agreement provides that, in the event that a tender offer, share exchange offer, issuer bid, take-over bid, recapitalization or similar transaction with respect to our Class A common stock is proposed by us or to us or our stockholders and approved by our board of directors or is otherwise consented to or approved by our board of directors, RHI and Dan Gilbert will be permitted to participate in such offer by delivery of a notice of exchange that is effective immediately prior to the consummation of such offer. In the case of any such offer proposed by us, we must use our reasonable best efforts to enable and permit RHI and Dan Gilbert to participate in such offer to the same extent or on an economically equivalent basis as the holders of shares of our Class A common stock without discrimination. In addition, we must use our reasonable best efforts to ensure that RHI and Dan Gilbert may participate in each such offer without being required to exchange Holdings Units and corresponding shares of our Class D common stock. The Exchange Agreement further provides that RHI and Dan Gilbert are not required to participate in any such offer that would be tax-free to holders of shares of our Class A common stock without their prior consent. The Exchange Agreement also sets forth certain information rights granted to RHI and specifies that we will not amend the provisions of our certificate of incorporation renouncing corporate opportunities without the consent of RHI for so long as RHI holds any Holdings Units. Prior to the consummation of our IPO, we entered into a registration rights agreement (the “Registration Rights Agreement”) with RHI, Dan Gilbert and certain of his affiliates (each, a “Registration Party”), pursuant to which each Registration Party is entitled to demand the registration of the sale of certain or all of our Class A common stock that it beneficially owns. Among other things, under the terms of the Registration Rights Agreement: • If we propose to file certain types of registration statements under the Securities Act of 1933, as amended (the “Securities Act”), with respect to an offering of equity securities, we must use our reasonable best efforts to offer each Registration Party the opportunity to register the sale of all or part of its shares on the terms and conditions set forth in the Registration Rights Agreement (customarily known as “piggyback rights”); and • Each Registration Party has the right, subject to certain conditions and exceptions, to request that we file (i) registration statements with the SEC for one or more underwritten offerings of all or part of our shares of Class A common stock that it beneficially owns and/or (ii) a shelf registration statement that includes all or part of our shares of Class A common stock that it beneficially owns as soon as we become eligible to register the sale of our securities on Form S-3 under the Securities Act. We are required to cause any such registration statements to be filed with the SEC, and to become effective, as promptly as reasonably practicable. All expenses of registration under the Registration Rights Agreement, including the legal fees of one counsel retained by or on behalf of the Registration Parties, will be paid by us. The registration rights granted in the Registration Rights Agreement are subject to customary restrictions such as minimums, blackout periods and, if a registration is underwritten, any limitations on the number of shares to be included in the underwritten offering as reasonably advised by the managing underwriter. The Registration Rights Agreement also contains customary indemnification and contribution provisions and is governed by New York law.
The purchase of Holdings Units (along with corresponding shares of our Class D common stock) from RHI using the net proceeds from our IPO, future exchanges by RHI or Dan Gilbert (or its transferees or other assignees) of Holdings Units and corresponding shares of Class D common stock or Class C common stock for shares of our Class B common stock or Class A common stock, and future purchases of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) from RHI or Dan Gilbert (or its transferees or other assignees) are expected to produce favorable tax attributes for us. These tax attributes would not be available to us in the absence of those transactions. We expect both the existing and anticipated tax basis adjustments to reduce the amount of tax that we would otherwise be required to pay in the future. We entered into a tax receivable agreement with RHI and Dan Gilbert that provides for the payment by us to RHI and Dan Gilbert (or their transferees of Holdings Units or other assignees) of 90% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize (computed using simplifying assumptions to address the impact of state and local taxes) as a result of: • Certain increases in our allocable share of the tax basis in Holdings’ assets resulting from (a) the purchases of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) from RHI and Dan Gilbert (or their transferees or other assignees) using the net proceeds from our IPO, or in any future offering, (b) exchanges by RHI and Dan Gilbert (or their transferees or other assignees) of Holdings Units (along with the corresponding shares of our Class D common stock or Class C common stock) for cash or shares of our Class B common stock or Class A common stock, as applicable, or (c) payments under the tax receivable agreements; • Tax benefits related to imputed interest deemed arising as a result of payments made under the tax receivable agreement; and • Any disproportionate allocations of tax benefits to Holdings as a result of section 704(c) of the Code that relate to the reorganization transactions. The tax receivable agreement makes certain simplifying assumptions regarding the determination of the cash savings that we realize or are deemed to realize from the covered tax attributes, which may result in payments pursuant to the tax receivable agreement in excess of those that would result if such assumptions were not made. The actual tax benefit, as well as the amount and timing of any payments under the tax receivable agreement, will vary depending upon a number of factors. These factors include, among others, the timing of exchanges by or purchases from RHI and Dan Gilbert, the price of our Class A common stock at the time of the exchanges or purchases, the extent to which such exchanges are taxable, the amount and timing of the taxable income we generate in the future and the tax rate then applicable and the portion of our payments under the tax receivable agreement constituting imputed interest. There is a possibility that under certain circumstances not all of the 90% of the applicable cash savings will be paid to the selling or exchanging holder of Holdings Units at the time described above. If we determine that such circumstances apply and all or a portion of such applicable tax savings is in doubt, we will pay to the holders of such Holdings Units the amount attributable to the portion of the applicable tax savings that we determine is not in doubt and pay the remainder at such time as we reasonably determine the actual tax savings or that the amount is no longer in doubt. Future payments under the tax receivable agreement could be substantial. We estimate that, as a result of the amount of the increases in the tax basis in Holdings’ assets from the purchase of Holdings Units (along with the corresponding shares of our Class D common stock) in connection with the initial public offering, the over-allotment
option (Greenshoe), and the March, 2021 paired interest exchange, assuming no material changes in the relevant tax law and that we will have sufficient taxable income to utilize all of the tax attributes covered by the tax receivable agreement when they are first available to be utilized under applicable law, we estimate that payments to RHI and Dan Gilbert under the tax receivable agreement would aggregate to approximately $685.7 million over the next 20 years and for yearly payments over that time to range between approximately $2.1 million to $53 million per year. Future payments under the In addition, RHI and Dan Gilbert (or its transferees or other assignees) will not reimburse us for any payments previously made if any covered tax benefits are subsequently disallowed. However, any excess payments made to RHI and Dan Gilbert (or such holder’s transferees or assignees) will be netted against future payments that would otherwise be made under the tax receivable agreement with RHI and Dan Gilbert, if any, after our determination of such excess. We could make payments to RHI and Dan Gilbert under the tax receivable agreement that are greater than our actual cash tax savings and may not be able to recoup those payments, which could negatively impact our liquidity. In addition, the tax receivable agreement provides that in the case of a change in control of the Company or a material breach of our obligations under the tax receivable agreement, we will be required to make a payment to RHI and Dan Gilbert in an amount equal to the present value of future payments (calculated using a discount rate equal to the lesser of 6.50% or LIBOR plus 100 basis points, or the applicable successor benchmark should LIBOR be discontinued, which may differ from our, or a potential acquirer’s, then current cost of capital) under the tax receivable agreement, which payment would be based on certain assumptions, including those relating to our future taxable income. In these situations, our obligations under the tax receivable agreement could have a substantial negative impact on our, or a potential acquirer’s, liquidity and could have the effect of delaying, deferring, modifying or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. These provisions of the tax receivable agreement may result in situations where RHI and Dan Gilbert have interests that differ from or are in addition to those of our other stockholders. In addition, we could be required to make payments under the tax receivable agreement that are substantial, significantly in advance of any potential actual realization of such further tax benefits, and in excess of our, or a potential acquirer’s, actual cash savings in income tax. Decisions we make in the course of running our business, such as with respect to mergers, asset sales, other forms of business combinations or other changes in control, may influence the timing and amount of payments made under the tax receivable agreement. For example, the earlier disposition of assets following an exchange or purchase of Holdings Units and the corresponding Class D common stock or Class C common stock may accelerate payments under the tax receivable agreement and increase the present value of such payments, and the disposition of assets before such an exchange or purchase may increase the tax liability of RHI and Dan Gilbert without giving rise to any rights to receive payments under the tax receivable agreement. Such effects may result in differences or conflicts of interest between the interests of RHI and Dan Gilbert and the interests of other stockholders. Finally, because we are a holding company with no operations of our own, our ability to make payments under the tax receivable agreement is dependent on the ability of our subsidiaries to make distributions to us. Our debt agreements restrict the ability of our subsidiaries to make distributions to us, which could affect our ability to make payments under the tax receivable agreement. To the extent that we are unable to make payments under the tax receivable agreement as a result of restrictions in our debt agreements, such payments will be deferred and will
accrue interest until paid, which could negatively impact our results of operations and could also affect our liquidity in periods in which such payments are made. We entered into an indemnification agreement with each of our executive officers and directors that provides, in general, that we will indemnify them to the fullest extent permitted by law in connection with their service to us or on our behalf. TRANSACTIONS WITH RHI AND OTHER RELATED PARTIES We have entered into transactions and agreements to provide certain support services to RHI, its subsidiaries and certain other affiliates of Dan Gilbert and Jennifer Gilbert, including Bedrock, StockX LLC and Cavaliers Operating Company LLC at fees that reflect the cost of services provided by us plus, in certain circumstances, a reasonable margin. These services primarily include technology services (e.g., infrastructure, platform interface, data and server support), information security services and support, human resources services (e.g., providing skilled recruiters and recruiting support, payroll and benefits administration and support), legal services (e.g., support and advice on transactional matters, employment law, and litigation), data governance and analytics, advisory services (e.g., strategic consulting, tax services and advice, and security services), the procurement of goods, services and materials, including vendor engagement and risk management (e.g., technology development and data acquisition services), accounting and finance services (e.g., providing accounting and financial reporting services), marketing services, and telemarketing services (collectively, the “Provided Services”). We intend to continue providing the Provided Services and our subsidiaries Rocket Mortgage and Rocket Central have entered into agreements for Provided Services with certain affiliates. Fees for the Provided Services amounted to We also charge the recipient of the Provided Services for all documented out of pocket third party costs and expenses we incur for such services, which in some cases are net settled against passthrough costs these related parties have charged us. In the year ended December 31, We have entered into transactions and agreements to receive certain services from certain subsidiaries of RHI and affiliates of Dan Gilbert and Jennifer Gilbert, including Rock Ventures LLC, Detroit Labs LLC, Sift LLC, Rock Security LLC, dPOP LLC, and Bedrock at fees that reflect the cost of services acquired by us plus, in certain circumstances, a reasonable margin. These services primarily include consultant services, data protection services, data source support and technical support services, physical security services, professional services to assist customers in customizing software, discovery analytics and data strategy services, business consulting, design and process improvement consulting services, and catering and event services (the “Received Services”). We intend to continue
receiving the Received Services. In connection with the Received Services, we paid fees and out of pocket costs and expenses incurred by the service providers for such services in an amount of Certain of our subsidiaries, including Rocket Mortgage and RockLoans Marketplace LLC, are parties to lease agreements for certain of our offices, including our headquarters in Detroit, with various affiliates of Bedrock and other affiliates of Dan Gilbert. The lease agreements have terms ranging between common area maintenance fees, costs for office services (e.g. for consumed electricity) and property maintenance costs. Additionally, we paid for the renovation and expansion of certain of the properties subject to these agreements. During the year ended December 31, In addition to the parking spaces we obtain under our lease agreements, we also acquire additional parking rights from Bedrock or through an agent of Bedrock at properties owned by Bedrock. During the year ended December 31, We also sublease office space and data center operations to certain of our affiliates, including On July 1, 2017, we entered into an agreement with Cleveland Cavaliers Holdings, LLC and certain of its affiliates (collectively, the “Cavaliers”), to obtain the naming rights for a professional sports arena. The agreement terminates in 2034. Dan Gilbert is the majority owner of the Cavaliers. Under the terms of the agreement, the Cavaliers must place signage on and in the arena in agreed upon locations and provide for advertising spots on radio and television broadcasts as well as certain other advertising benefits. We paid the Cavaliers Rocket Mortgage has provided a guaranty for three rental agreements entered into by affiliates of Dan Gilbert which relate to the cafeteria, gym and daycare facilities at 1000 Woodward Avenue in Detroit. Rocket Mortgage is obligated to pay for up to 50% of the basic rental and operating expenses under each of these agreements if the tenant does not make such payments. If these guarantees were required to be paid, Rocket Mortgage may be required to fund up to $5.2 million in total for the three guarantees. We have not recorded a liability for these guarantees because we believe it is not probable that we would be required to make any payments thereunder. Rocket Mortgage has entered into a Master Commercial Card Agreement with JPMorgan Chase Bank, N.A. (“JPM”) pursuant to which Rocket Mortgage and its affiliates may use cards issued by JPM. Rocket Mortgage is responsible as a primary obligor for all obligations of these affiliates under this agreement. At December 31, During the year ended December 31,
RHI/RM Line Of Credit. RHI and Rocket Mortgage are parties to an agreement for an uncommitted unsecured line of credit, dated June 9, 2017, as further amended and restated on September 16, 2021 (the “RHI/RM Line of Credit”), which provides for financing from RHI to Rocket Mortgage of up to $2.0 billion. The RHI/RM Line of Credit matures on July Borrowings under the RHI/RM Line of Credit bear interest at a rate per annum of one-month LIBOR (as quoted in the Wall Street Journal) plus 1.25%. At December 31, RHI/ATIC Debenture. RHI and Amrock Title Insurance Company (“ATIC”) are parties to a surplus debenture, effective as of December 28, 2015, as further amended and restated on December 31, 2019 (the “RHI/ATIC Debenture”), pursuant to which ATIC is indebted to RHI for an aggregate principal amount of $21.5 million. The RHI/ATIC Debenture matures on December 31, 2030. Interest under the RHI/ATIC Debenture accrues at an annual rate of 8.0%. Principal and interest under the RHI/ATIC Debenture are due and payable quarterly, in each case subject to ATIC achieving a certain amount of surplus and payments of all interest before principal payments begin. Any unpaid amounts of principal and interest will be due and payable upon the maturity of the RHI/ATIC Debenture. In connection with the amendment and restatement of the RHI/ATIC Debenture in 2017, RHI decreased the aggregate principal amount outstanding thereunder by $3.5 million (from $25 million to $21.5 million) and contributed such amount to the equity capital of ATIC. At December 31, We have historically entered into secondment agreements with Bedrock, Rock Ventures and Rocket Community Fund pursuant to which we have provided the affiliates with personnel necessary to perform its operations. In the year ended December 31, Affiliates of Dan Gilbert own or owned the Shinola Hotel in Detroit, the Ritz Carlton in Cleveland, the watch manufacturer Shinola Detroit, and event venue facilities in Detroit. From time to time, we buy products and services from these companies in the ordinary course of our business. The amounts involved in such transactions for the year ended December 31, Two immediate family members of our directors
The following table sets forth the beneficial ownership of our Class A common stock as of April • Each person, or group of affiliated persons, who we know to beneficially own more than 5% of any class or series of our capital stock; • Each of our named executive officers; • Each of our • All of our executive officers and directors as a group. In connection with our IPO, we entered into the Exchange Agreement with RHI and Dan Gilbert, pursuant to which each of RHI and Dan Gilbert (or certain transferees thereof) will have the right to exchange its or his Holdings Units (along with corresponding shares of our Class D common stock or Class C common stock), for, at our option (as the sole managing member of Holdings), (i) shares of our Class B common stock or Class A common stock, as applicable, on a one-for-one basis or (ii) cash from a substantially concurrent public offering or private sale (based on the price of our Class A common stock in such public offering or private sale), subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. The percentages of ownership and combined voting power set forth below are based on The amounts of Class A common stock beneficially owned are reported on the basis of the regulations of the SEC governing the determination of beneficial ownership of securities. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days of April As of the record date, only shares of Class A common stock and Class D common stock are outstanding. However, because each of RHI and Dan Gilbert has the right at any time to (a) exchange any Holdings Units (together with a corresponding number of shares of Class D common stock) for, at our option (as the sole managing member of Holdings), (i) shares of our Class B common stock on a one-for-one basis or (ii) cash from a substantially concurrent public offering or private sale (based on the price of our Class A common stock in such public offering or private sale), subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications and (b) convert shares of Class D common stock into a shares of Class C common stock on a one-for-one basis, our Class B common stock and Class C common stock is currently beneficially owned by each of RHI and Dan Gilbert. The number of shares of Class B common stock and Class C common stock and the percentage beneficially owned by each of RHI and Dan Gilbert are equal to the amounts reported for the Class D common stock in the following table, assuming that all Holdings Units (together with the corresponding shares of Class D common stock) have been exchanged for shares of Class B common stock on a one-for-one basis or shares of Class D common stock have been converted into shares of Class C common stock on a one-for-one basis, as applicable.
Except as otherwise indicated and subject to applicable community property laws, each owner has sole voting and investment power with respect to the securities listed. Unless otherwise indicated, the address for each beneficial owner listed below is 1050 Woodward Avenue, Detroit, MI 48226.
* Less than one percent. (1) Except as described by the Voting Limitation, each holder of Class B common stock and Class D common stock is entitled to 10 votes per share and each holder of Class A common stock and Class C common stock is entitled to one vote per share on all matters submitted to our stockholders for a vote. Our Class C common stock and Class D common stock do not have any of the economic rights (including rights to dividends and distributions upon liquidation) associated with our Class A common stock and Class B common stock. Without the Voting Limitation, RHI would have approximately 99% of the combined voting power of our common stock. Each share of our Class B common stock and Class D common stock, as applicable, will automatically convert into one share of Class A common stock or Class C common stock, as applicable, (a) immediately prior to any sale or other transfer of such share by a holder of such share, subject to certain limited exceptions, such as transfers to permitted transferees, or (b) if the RHI Parties own less than 10% of our issued and outstanding common stock. (2) The numbers of shares of Class A common stock beneficially owned and percentages of beneficial ownership reported assume that (a) all Holdings Units (together with the corresponding shares of Class D common stock) have been exchanged for shares of Class B common stock and (b) all shares of Class B common stock have been converted into shares of Class A common stock.
(3) Percentage of voting power represents voting power with respect to all shares of our Class A common stock, Class B common stock, Class C common stock and Class D common stock voting together as a single class. (4) Based on a Schedule 13G/A (Amendment No. 1) filed with the SEC on February 10, 2022. RHI beneficially owns 1,847,777,661 Holdings Units and an equal number of shares of Class D common stock. The address for RHI is 1090 Woodward Avenue, Detroit, Michigan 48226. (5) Based on a Schedule (6) Based on a Schedule 13G/A (Amendment No. 1) filed with the SEC on February 14, (7) Based on a Schedule 13G/A (Amendment No. 1) filed with the SEC on February 1, 2023. This report includes holdings of various subsidiaries of the holding company and states that Invesco Ltd., in its capacity as a parent holding company to its investment advisers, may be deemed to beneficially own the shares held of record by clients of Invesco Ltd. Invesco Ltd. reported sole voting power for (8) (9) Dan Gilbert holds 1,101,822 Holdings Units and an equal number of shares of Class D common stock. Dan is the majority shareholder of RHI and has shared voting and dispositive control, and beneficial ownership, with respect to the Holdings Units and shares of Class D common stock held of record by RHI. See footnote 4 above. (10) Includes (11) Includes 29,090 shares of Class A common stock that Matthew could acquire through the exercise of stock options within 60 days of April (12) Includes 28,653 shares of Class A common stock that Suzanne could acquire through RSUs scheduled to vest within 60 days of April 17, 2023. (13) Includes (a) (14) Includes (a) 959,959 shares of Class A common stock that Jay could acquire through the exercise of stock options within 60 days of April (15) Includes (16) Includes (17) Such information is based on the Form 4 filing for Julie filed with the SEC on August 8, 2022. Includes 363,621 shares of Class A common stock that Julie could acquire through the exercise of stock options within 60 days of April (18) Such information is based on the Form 4 filing for Angelo filed with the SEC on March 9, 2022. Includes
KEY RESPONSIBILITIES OF OVERSIGHT On behalf of our Board, our Audit Committee provides independent oversight of: • The reliability and integrity of the Company’s accounting policies and financial statements; • The Company’s compliance with legal and regulatory requirements; • The qualifications, scope of work, performance and independence of Ernst & Young LLP, the Company’s independent registered public accounting firm; • The performance of the Company’s internal audit function and its system of internal controls; • Compliance with the Code of Conduct and Ethics and implementation and effectiveness of the Company’s compliance and ethics programs; and • The Company’s major financial risk exposures, and management’s risk assessment and risk management policies. REQUIRED COMMUNICATIONS WITH AUDIT COMMITTEE As part of its oversight of the Company’s Annual Report on Form 10-K for the year ended December 31, Our Audit Committee has discussed with Ernst & Young the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. In addition to the matters noted above, these required communications included Ernst & Young’s perspective on the quality (not merely the acceptability) of the Company’s accounting principles, the reasonableness of significant estimates and judgments made by management, the disclosures in the audited consolidated financial statements, including the disclosures relating to critical audit matters addressed in Ernst & Young’s audit report. Our Audit Committee also received the written disclosures and a letter from Ernst & Young required by the applicable requirements of the PCAOB regarding Ernst & Young’s communications with our Audit Committee concerning independence. Our Audit Committee has discussed and confirmed with Ernst & Young its independence with respect to the Company, which included considering whether Ernst & Young’s provision of non-audit services was compatible with its independence.
AUDIT COMMITTEE RECOMMENDATION Based upon these reviews and discussions, our Audit Committee recommended to our Board that the Company’s audited consolidated financial statements be included in the Annual Report on Form 10-K for the year ended December 31, This report has been furnished by the members of our Audit Committee of our Board: Audit Committee Jonathan Mariner, Chair Suzanne Shank Nancy Tellem
PRE-APPROVAL POLICIES AND PROCEDURES Our Audit Committee has the sole authority to review in advance, and pre-approve (which may be pursuant to pre-approval policies and procedures) all audit and non-audit services to be provided by the Company’s independent auditors and to approve all related fees and other terms of engagement to ensure that the provision of these services do not impair the independence of the Company’s independent audit firm from the Company and its subsidiaries. All of the services rendered by Ernst & Young to the Company and its subsidiaries during INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES Our Audit Committee retained Ernst & Young to audit the Company’s consolidated financial statements as of and for the years ended December 31,
(1) Audit Fees for professional services associated with the annual audit of our consolidated financial statements and the financial statements of certain subsidiaries, the reviews of our quarterly condensed consolidated financial statements and the issuance of consents and comfort letters in connection with registration statement filings with the SEC. (2) (3) Tax Fees consist of fees billed for tax advisory and compliance services provided to certain subsidiaries of the Company.
Our Audit Committee has unanimously reappointed Ernst & Young as the independent registered public accounting firm to audit the Company’s consolidated financial statements as of and for the year ending December 31, Ernst & Young served as the Company’s independent registered public accounting firm during SUPPORT FOR RECOMMENDATION In determining that retaining Ernst & Young for • Ernst & Young’s performance on the Company’s audit and non-audit work for the year ended December 31, • Ernst & Young’s qualifications, independence, capabilities and expertise, evident through its audit planning and reports, industry knowledge, use of technology to improve efficiencies, resources and staffing, objectivity and professional skepticism; • External data on audit quality and performance, including results of recent PCAOB reports on Ernst & Young and peer firms and improvements made from period to period; • The terms of the audit engagement, including the reasonableness of audit and non-audit fees charged taking into account the breadth and complexity of services provided, as well as the efficiency achieved in performing such services; • The quality of Ernst & Young’s communications to and interactions with our Audit Committee at meetings and our Audit Committee Chair between meetings; and • The benefits of having a long-tenured auditor and the institutional knowledge gained from prior years of engagement. In accordance with SEC rules, the maximum number of consecutive years of service for lead and concurring review audit partners for public companies is five years. Our lead audit partner has served in such role since 2020, and therefore has
NON-BINDING VOTE Our Audit Committee is responsible for selecting the Company’s independent registered public accounting firm, and stockholder approval is not required to appoint Ernst & Young as our independent registered public accounting firm. However, our Audit Committee will take the outcome of the vote on this proposal into consideration when appointing our independent registered public accounting firm in the future. Our Audit Committee may retain another independent registered public accounting firm at any time if it concludes that such change would be in the best interest of the Company’s stockholders, even if the stockholders approve this proposal. INQUIRIES OF ERNST & YOUNG AT ANNUAL MEETING Ernst & Young will be present at the
The purpose of the Our stockholders previously approved the As of April SUMMARY OF THE AMENDED The If our stockholders do not approve the proposed
The material terms and conditions of the The The Any full or part time team member of the Company or a subsidiary of the Company who our Compensation Committee determines is eligible may participate during an offering period beginning on an enrollment date. As of For offering periods to date, our Compensation Committee has determined that all regular team members, excluding only our executive officers, temporary and contingent staff and interns, were eligible to participate in the As of April Either authorized and unissued shares or issued shares reacquired by the Company may be made subject to purchases under the For additional information regarding securities authorized for issuance under all of our equity compensation plans as of December 31,
OFFERING PERIODS Offering periods may be established by our Compensation Committee from time to time at its discretion. In fiscal quarter (each, an “enrollment date”) and ended on the day prior to the three month anniversary of such date (each, an “exercise date”). To participate in an offering, a team member must complete a subscription agreement and return it to the Stock Administrator prior to the enrollment date and designate the portion of his or her base pay, regular incentive pay, regular overtime pay or discretionary annual bonus that he or she elects to have withheld during the applicable offering period. During an offering period, a participating team member may discontinue participation in the Our Compensation Committee may, in its sole discretion, permit participating team members to pay the exercise price in a manner different than the payroll deduction procedure described above. In the event of the termination of a participating team member’s continuous service for any reason on or before the exercise date, he or she will be deemed to have elected to withdraw from the On the enrollment date for any offering period, each participating team member shall be granted an option to purchase a maximum number of shares determined by A participating team member’s option will be exercised automatically on the exercise date of such offering period by purchasing the maximum number of shares of our Class A common stock subject to such option that may be purchased at the exercise price with the funds in his or her participant account, unless such team member has withdrawn from the offering period prior to the exercise date. Unless otherwise provided by our Compensation Committee, no participating team member shall be granted an option to purchase shares under the The Stock Administrator shall hold shares issued pursuant to the exercise of the option until any such shares are distributed to the participating team member, transferred or sold in accordance with procedures established from
time to time by the Stock Administrator, including any period established by our Compensation Committee following the exercise dates during which a participating team member is required to hold any shares purchased on his or her behalf pursuant to the our Compensation Committee has not imposed to date. Following any such holding period, shares shall be delivered as soon as reasonably practicable after termination of a participating team member’s continuous service or receipt of a request by the participating team member for delivery of all shares, subject to compliance with all applicable law. In the event of certain changes in corporate structure affecting our Class A common stock or the value thereof (e.g., any merger, reorganization, consolidation, recapitalization, dividend or distribution, stock split, reverse stock split, spin-off or similar transaction), our Compensation Committee shall make any adjustments and other substitutions to the • Provide for either termination of any outstanding option in exchange for (1) an amount of cash, if any, equal to the amount that would have been obtained upon exercise of such option had such option been currently exercisable or (2) the replacement of such outstanding option with other rights or property selected by our Compensation Committee in its sole discretion; • Provide that the outstanding options under the • Make adjustments in the number and class of shares (or other securities or property) subject to outstanding options under the • Shorten the offering period in progress and set a new exercise date, which shall be a date immediately prior to the date of any transaction or event described above and provide for any other necessary procedures to effectuate such actions; and • Provide that all outstanding options shall terminate without being exercised. Our Board may amend the The Neither amounts credited to a participating team member’s participant account nor any option granted to a participating team member under the
CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following summary of tax consequences to the Company and to participating team members is intended to be used solely by stockholders in considering how to vote on this proposal and not as tax guidance to participating team members. It relates only to U.S. federal income tax and does not address state, local, or foreign income tax rules or other U.S. tax provisions, such as estate or gift taxes. Different tax rules may apply to specific participants and transactions under the The NEW PLAN BENEFITS Participation in the In
The annual meeting will be held virtually via a live webcast on You can attend the annual meeting online, vote your shares electronically and submit questions during the annual meeting by visiting www.virtualshareholdermeeting.com/ You may electronically vote your shares and submit questions at the annual meeting by using the 16-digit control number that is printed in the box on your Notice of Internet Availability of Proxy Materials or proxy card (if you received a printed copy of the proxy materials). If you lose your 16-digit control number, you may join the annual meeting as a guest, but you will not be able to vote, ask questions or access the list of stockholders as of the record date. If your shares are held in street name and you did not receive a 16-digit control number, you may be able to gain access to and vote at the annual meeting by logging into your bank or brokerage firm’s website and selecting the stockholder communications mailbox to access the meeting. Instructions should also be provided on the voting instruction card provided by your bank or brokerage firm. We recommend that you log in at least 15 minutes before the annual meeting begins to ensure ample time to complete the check-in procedures. A replay of the annual meeting audio webcast will be available on our website for approximately one year following the annual meeting. We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website, please call the technical support number that will be posted on the annual meeting log-in page. You do not need to attend the annual meeting to vote. Even if you plan to attend the annual meeting, please submit your vote in advance as instructed in this proxy statement. The virtual meeting format for the annual meeting will enable participation by our stockholders from anywhere in the world at little to no cost, which we believe enhances stockholder access to the annual meeting and communication with management and The Company requests that stockholders submit questions in advance of the annual meeting by sending questions to ir@rocketcompanies.com. During the annual meeting, questions relating to stockholder proposals or the Company may be submitted in the field provided on the virtual meeting website at or before the time the questions
are to be discussed. If we receive substantially similar questions, we may group those questions together and provide a single response to avoid repetition. While we will try to answer as many appropriate questions as we can during the time allotted for questions during the annual meeting, we may not have the time to respond to all questions submitted. If we are unable to answer all questions, stockholders may submit questions after the annual meeting to ir@rocketcompanies.com. Additional information regarding the rules and procedures for how the Company will run the annual meeting and stockholder participation in the annual meeting will be provided in our meeting rules of conduct, which stockholders can view during the meeting at the virtual meeting website. The rules of conduct are designed to allow us to conduct an orderly meeting in fairness to all stockholders. You have received this proxy statement and related materials because at the close of business on the record date, you owned shares of the Company’s common stock and our Board is soliciting your proxy to vote your shares of common stock at the annual meeting. This proxy statement summarizes information relevant to your vote. Instead of mailing a printed copy of our proxy materials to each stockholder of record, we are permitted under SEC rules to furnish our proxy materials by providing access to such documents over the internet. Therefore, stockholders generally will not receive printed copies of the proxy materials unless they request them. If you would like to request a copy of the materials for the annual meeting, you may (1) visit www.proxyvote.com, (2) call 1-800-579-1639 or (3) send an email to sendmaterial@proxyvote.com. We encourage you to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of the annual meeting. A Notice of Internet Availability of Proxy Materials provides instructions for accessing our proxy materials over the internet and was mailed directly to stockholders of record. The Notice of Internet Availability of Proxy Materials also provides instructions regarding how stockholders of record may vote their shares over the internet. Stockholders of record who prefer to receive a paper or e-mail copy of our proxy materials must follow the instructions provided in the Notice of Internet Availability of Proxy Materials for requesting such materials. The Notice of Internet Availability of Proxy Materials only identifies the items to be voted on at the annual meeting. You cannot vote by marking the Notice of Internet Availability of Proxy Materials and returning it. The brokerage firm, bank or other holder of record who is considered the stockholder of record will forward a notice that directs beneficial owners of our common stock to the website where they can access our proxy materials to each beneficial stockholder. Such brokerage firm, bank or other holder of record also will provide each beneficial owner with instructions on how to request a paper or e-mail copy of our proxy materials. To enroll in the electronic delivery service for future stockholder meetings, use your Notice of Internet Availability of Proxy Materials (or proxy card or voting instruction card, if you received printed copies of the proxy materials) to register online at www.proxyvote.com and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. All stockholders of record of our common stock on the record date and beneficial owners of our common stock on the record date holding a valid proxy for the annual meeting from their broker, bank or other nominee giving them the right to vote the shares, are entitled to attend and vote at the annual meeting.
Except as described further below, each holder of Class B common stock and Class D common stock is entitled to 10 votes per share and each holder of Class A common stock and Class C common stock is entitled to one vote per share on all matters submitted to our stockholders for a vote. All classes of our common stock with voting rights will vote together as a single class on all matters described in this proxy statement. As of the record date, there were The As a result of the Voting Limitation, as of the record date, (a) each outstanding share of Class D common stock held by RHI is entitled to Holders of a majority of the voting power of all shares of common stock outstanding on the record date and entitled to vote at the meeting must be present at the annual meeting, by remote communication or represented by proxy, to constitute a quorum for the transaction of any business. Proxies marked with abstentions or instructions to withhold votes, as well as broker non-votes (defined below), will be counted as present in determining whether or not there is a quorum. In the absence of a quorum, the holders of a majority of the voting power of the shares of stock present at the meeting may adjourn or postpone such meeting to another time or place. If your shares of common stock are registered directly in your name with the Company’s transfer agent, Computershare Trust Company N.A., you are considered the stockholder of record with respect to those shares and the Notice of Internet Availability of Proxy Materials was sent directly to you. If your shares of common stock are held with a broker, bank or other nominee, you are considered the beneficial owner with respect to those shares. Your broker, bank or other holder of record who is considered the stockholder of record with respect to those shares has forwarded to you a notice directing you to the website where you can access our proxy materials. As the beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote your shares. Your broker, bank or nominee has enclosed voting instructions for you to use in directing the broker, bank or nominee on how to vote your shares. If you are a stockholder of record, you may vote your shares using one of the following methods (please also see the information provided above and below concerning the difference in how to vote if you hold shares beneficially
through a brokerage firm, bank or other nominee instead of as the registered holder – beneficial holders should follow the voting instructions provided by their respective nominees): Over The Internet. Go To www.proxyvote.com. You should review the information that is printed in the box provided in your Notice of Internet Availability of Proxy Materials and visit www.proxyvote.com. You can use the internet 24 hours a day, seven days a week, to submit your voting instructions and for electronic delivery of information up until 11:59 p.m., Eastern Daylight Time, on June By Telephone. Call 1-800-690-6903. You can use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m., Eastern Daylight Time, on June By E-Mail. E-Mail sendmaterial@proxyvote.com. If you request proxy materials by e-mail, please send a blank e-mail including in the subject line the information that is printed in the box provided in your Notice of Internet Availability of Proxy Materials. Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before By Mail. If you received a printed copy of the proxy materials, you may submit your vote by completing, signing and mailing your proxy card and returning it in the postage-paid envelope to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717. Sign your name exactly as it appears on the proxy card. We must receive proxy cards submitted by mail no later than June During The Annual Meeting. Visit www.virtualshareholdermeeting.com/ If, prior to the annual meeting, you vote over the internet or by telephone, your electronic vote authorizes the named proxies in the same manner as if you signed, dated and returned a proxy card. If, prior to the annual meeting, you vote over the internet or by telephone, do not return a proxy card or vote at the annual meeting unless you intend to revoke your previously submitted proxy. As a beneficial owner, you have the right to direct your broker, bank or other nominee how to vote your shares by following the instructions that your broker, bank or other nominee sent to you. You will receive voting instructions for each account that you have with a broker, bank or other nominee. Please instruct your broker, bank or other nominee how to vote your shares using the voting instruction card you received from them. Please return your completed voting instruction card to your broker, bank or other nominee. If your broker, bank or other nominee permits you to provide voting instructions via the internet or by telephone, you may vote that way as well. As a beneficial owner, if you wish to change the directions that you have provided to your broker, bank or other nominee, you should follow the instructions that your broker, bank or other nominee sent to you. If you do not direct your broker, bank or other nominee how to vote your shares, the broker, bank or other nominee will determine if it has the discretionary authority to vote on each applicable matter. Under applicable law, if you
are a beneficial owner, your broker, bank or other nominee only has discretion to vote on certain routine matters without your voting instructions. The proposal to ratify the appointment of Ernst & Young as our independent registered public accounting firm is considered a routine matter. For all other matters at the annual meeting, your broker, bank or other nominee will be unable to vote on your behalf if you do not instruct them how to vote your shares and, if you do not provide voting instructions, your shares will be considered broker non-votes. Therefore, it is very important for you to vote your shares for each proposal. WHAT CAN I DO IF I CHANGE MY MIND AFTER I VOTE? If you are a stockholder of record, you may change your voting instructions and revoke your proxy before it is exercised by doing any one of the following: • Timely written notice of revocation to our General Counsel and Corporate Secretary at 1050 Woodward Avenue, Detroit, MI 48226. • A timely later-dated vote by telephone or on the internet or timely delivery of a valid, later-dated proxy. • Participating in the annual meeting live via the internet and voting again. Only the latest validly executed proxy that you submit will be counted. Your attendance at the annual meeting in person will not cause your previously granted proxy to be revoked unless you vote in person. If you are a beneficial owner of shares but not the stockholder of record, you may submit new voting instructions by contacting your broker, bank or other nominee.
WHAT MATTERS AM I Subject to revocation, all forms of proxy that are properly completed and timely received will be voted in accordance with the instructions you give. If no instructions are given (except in the case of broker non-votes), the persons named as proxies will vote the shares of common stock in accordance with the recommendations of our Board. The following table sets forth each of the proposals you are being asked to vote on, how you may vote on each proposal and how our Board recommends that you vote on each proposal.
Although the advisory vote in Proposal 2 is not binding, our Board and Audit Committee will take your vote into consideration in determining future activities. If any other matter is properly submitted to the stockholders at the annual meeting, its adoption generally will require the affirmative vote of the majority of the voting power of shares of stock present by remote communication or represented by proxy and entitled to vote on the matter. As of the date of this proxy statement, our Board knows of no matter that will be presented for action by the stockholders at the annual meeting other than those discussed in this proxy statement, and we have not received notice of any other matters that may properly be presented at the annual meeting. If any other matter requiring a vote of the stockholders properly comes before the annual meeting, the individuals acting under the proxies solicited by our Board will vote and act as our Board recommends or, if our Board gives no recommendation, according to their best judgments in light of the conditions then prevailing, to the extent permitted under applicable law. WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS, PROXY CARD OR VOTING INSTRUCTION CARD? If you receive more than one Notice of Internet Availability of Proxy Materials, proxy card or voting instruction card, it means that you have multiple accounts with banks, brokers, other nominees and/or our transfer agent. Please take action with respect to each The Inspector of Elections appointed at the annual meeting will tabulate the voting results. We intend to disclose the final voting results in a current report on Form 8-K within four business days of the annual meeting. To the extent
final voting results are not then available, we will report preliminary voting results in a current report on Form 8-K within four business days of the annual meeting and report the final voting results in a current report on Form 8-K as soon as they are available. We will bear the entire cost of solicitation of proxies, including preparation, assembly, printing and mailing of this proxy statement, the proxy card, and any additional information furnished to stockholders. We will furnish copies of solicitation materials to banks, brokers and other nominees holding shares of voting stock beneficially owned by others to forward to such beneficial owners. We may reimburse persons representing beneficial owners of voting stock for their reasonable costs of forwarding solicitation materials to such beneficial owners. Original solicitation of proxies may be supplemented by electronic means, mail, facsimile, telephone or personal solicitation by our directors, officers or other team members. In order to reduce expenses, we are taking advantage of certain SEC rules, commonly known as householding, that permit us to send: (i) a single annual report and/or a single proxy statement or (ii) a single Notice of Internet Availability of Proxy Materials to multiple stockholders of record who share an address, unless we have received contrary instructions from one or more of the stockholders. A stockholder of record at a shared address may call Broadridge, toll free, 1-866-540-7095, or write to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717, to: (i) request additional copies of the annual report, proxy statement or Notice of Internet Availability of Proxy Materials; (ii) notify the Company that such stockholder of record wishes to receive a separate annual report to stockholders, proxy statement or Notice of Internet Availability of Proxy Materials, as applicable, in the future; or (iii) notify the Company that such stockholder of record wishes to receive a single annual report to stockholders, proxy statement or Notice of Internet Availability of Proxy Materials, as applicable, in the future. The Company undertakes to deliver promptly, upon written or oral request, a separate copy of the Internet Notice and, if applicable, copies of such additional proxy materials to a stockholder that previously elected to receive a single copy of materials with one or more other stockholders. If you are a beneficial owner, you may revoke your consent to householding by notifying your broker, bank or other nominee. A list of our stockholders as of the record date will be available for inspection at our corporate headquarters during ordinary business hours throughout the 10-day period prior to the annual meeting. WHO SHOULD I CALL IF I HAVE ANY QUESTIONS? If you have any questions about the annual meeting, please contact our General Counsel and Corporate Secretary by telephone at (313) 373-7990. If you have any questions about your ownership of our common stock, please contact our transfer agent, Computershare Trust Company N.A., at PO Box
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The following sets forth the aggregate information regarding our equity compensation plans in effect as of December 31,
(1) No exercise price is provided for the RSUs or factored into the total weighted average exercise price because they are converted into common stock on a one-for-one basis at no additional cost. (2) Represents shares available for future issuance under the 2020 Omnibus Incentive Plan as of December 31, (3) The number of shares available
PRESENTATION OF STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS AT Stockholders who wish to nominate persons for election to our Board or propose other matters to be considered at our well as the information specified in our bylaws. This notice must be received by the Company’s Secretary at the principal executive offices of the Company no earlier than February The requirements for advance notice of stockholder proposals under our bylaws do not apply to proposals properly submitted under Rule 14a-8 under the Exchange Act. The deadline for stockholders to submit proposals to be included in our proxy statement for our Submitting a stockholder proposal does not guarantee that we will include it in the Company’s proxy statement. We reserve the right to reject, rule out of order or take other appropriate action with respect to any director nomination or stockholder proposal that does not comply with our bylaws, Rule 14a-8 or Rule ACCESS TO REPORTS AND OTHER INFORMATION We file or furnish our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other documents electronically with the SEC under the Exchange Act. You may obtain such reports from the SEC’s website at www.sec.gov. Our website is ir.rocketcompanies.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other documents filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available on our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our Corporate Governance Guidelines, Code of Conduct and Ethics and Committee charters are also available on our website. We will provide, free of charge, a copy of any of our corporate documents listed above upon written request to our General Counsel and Corporate Secretary at 1050 Woodward Avenue, Detroit, MI 48226. Our website or the websites of other third parties noted herein and the information contained on, or that can be accessed through, such websites will not be deemed to be incorporated by reference in, and are not considered part of, this proxy statement.
FORWARD-LOOKING STATEMENTS This proxy statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve risks and uncertainties. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this proxy statement, including statements regarding our future business strategy, those described under the heading “Item 1A. Risk Factors” of our most recent annual report on Form 10-K and subsequent reports that we file with the SEC. Our forward-looking statements made herein are made only as of the date of this proxy statement. We expressly disclaim any intent, obligation or undertaking to update or revise any forward-looking statements made herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this proxy * * * * * Your cooperation in giving this matter your immediate attention and in voting your proxies promptly is appreciated. By Order of our Board of Directors, TINA V. JOHN General Counsel and Secretary Detroit, Michigan April
AMENDED AND RESTATED ROCKET COMPANIES, INC. 2020 1. Purpose. The purpose of the Plan (as defined below) is to facilitate Employee participation in the ownership and economic progress of the Company and its Subsidiaries by providing Employees with an opportunity to purchase Shares of the Company. The Plan is not intended to qualify as an “Employee Stock Purchase Plan,” as set forth in section 423 of the Code. 2. Definitions. As used in the Plan, the following terms shall have the meanings set forth below: (a) “Applicable Holding Period” shall mean any period established by the Committee following the Exercise Dates during which a Participant is required to hold any Shares purchased on his or her behalf pursuant to the Plan; provided, however, in the event of a Participant’s death, the Applicable Holding Period shall be deemed satisfied as of the Participant’s date of death. (b) “Beneficiary” shall mean a Person entitled to receive payments or other benefits or exercise rights that are available under the Plan in the event of the Participant’s death. If no such Person can be named or is named by the Participant, or if no Beneficiary designated by such Participant is eligible to receive payments or other benefits or exercise rights that are available under the Plan at the Participant’s death, such Participant’s Beneficiary shall be such Participant’s estate. (c) “Board” shall mean the board of directors of the Company. (d) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the rules, regulations and guidance thereunder. Any reference to a provision in the Code shall include any successor provision thereto. (e) “Committee” shall mean the Board or such other committee as may be designated by the Board. (f) “Company” shall mean Rocket Companies, Inc., and any and all successor entities. (g) “Continuous Status as an Employee” shall mean the absence of any interruption or termination of service as an Employee. Continuous (h) “Effective Date” shall mean the effective date of the Company’s initial public offering. (i) “Eligible Compensation” for an Offering Period shall mean, unless otherwise determined by the Committee, (i) base pay received during such Offering Period by a Participant for services to the Employer, (ii) regular incentive pay received during such Offering Period by a Participant, (iii) regular overtime pay received during such Offering Period by a Participant and (iv) any discretionary annual bonus received during such Offering Period by a Participant, in each case, as determined by the Company’s Human Resources department (i.e., the “Pulse”). For the avoidance of doubt, Eligible Compensation shall not include non-regular incentive pay for ad-hoc purposes, non-regular overtime pay related to non-regular incentive pay for ad-hoc purposes, non-regular discretionary pay for ad-hoc purposes, severance pay, hiring and relocation bonuses, or any other form of compensation that may be paid from time to time to the Participant from the Employer. (j) “Eligible Employee” shall have the meaning specified in Section 3(a).
(k) “Employee” shall mean any officer or other employee of the Employer. (l) “Employer” shall mean, with respect to an Offering Period, the Company and each Subsidiary of the Company during the applicable Offering Period. (m) “Enrollment Date” shall mean the first day of each Offering Period. (n) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time, and the rules, regulations and guidance thereunder. Any reference to a provision in the Exchange Act shall include any successor provision thereto. (o) “Exercise Date” shall mean the last day of each Offering Period. (p) “Exercise Price” shall have the meaning specified in Section 7(b). (q) “Fair Market Value” shall mean (i) with respect to Shares, the closing price of a Share on the date in question (or, if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) on the principal stock market or exchange on which the Shares are quoted or traded, or if Shares are not so quoted or traded, fair market value of a Share as determined by the Committee, and (ii) with respect to any property other than Shares, the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. (r) “Offering Period” shall mean the period described in Section 4. (s) “Participant” shall mean an Eligible Employee who has elected to participate in the Plan. (t) “Participant Account” shall mean that separate account maintained under the Plan to record the amount that a Participant has contributed to the Plan during an Offering Period. (u) “Plan” shall mean the Rocket Companies, Inc. 2020 (v) “Share” shall mean a share of the Company’s Class A common stock, $0.00001 par value per Share. (w) “Stock Administrator” shall mean the administrator appointed by the Board or the Committee pursuant to Section 15 to administer the Plan. (x) “Subscription Agreement” shall have the meaning specified in Section 5. (y) “Subsidiary” shall mean a corporation, domestic or foreign, partnership or other entities, of which at the time of the granting of an option pursuant to Section 7, not less than 50%, or another amount determined by the Committee, of the total combined voting power of all classes of stock or units are held by the Company or a Subsidiary, whether or not such corporation, partnership or entities now exist or are hereafter organized or acquired by the Company or a Subsidiary. 3. Eligibility. (a) General Rule. Any full or part time Employee who satisfies any criteria that the Committee may determine, in its sole discretion, from time to time shall be eligible to participate as an “Eligible Employee” during the Offering Period beginning on such Enrollment Date; provided, however, that an Employee who is a citizen or resident of a foreign jurisdiction shall not be an “Eligible Employee” if the grant of an option under
the Plan to such Employee would be prohibited under the laws of such foreign jurisdiction or as determined by the Committee in its sole discretion. Exceptions. Notwithstanding any provisions of the Plan to the contrary, unless otherwise provided by the Committee, no Employee shall be granted an option to purchase Shares under the Plan if such option would permit such Employee’s right to purchase Shares to accrue at a rate which exceeds $25,000 of the Fair Market Value of the Shares (determined on the Enrollment Date) for each calendar year in which such option is outstanding at any time. 4. Offering Periods. Offering Periods may be established by the Committee from time to time at the Committee’s discretion, with the initial Offering Period expected to be a period of three months. 5. Participation. An Eligible Employee shall become a Participant by completing a subscription agreement in such form as shall be specified by the Company (“Subscription Agreement”), and returning it to the Stock Administrator prior to the Enrollment Date for the applicable Offering Period, unless a later time for filing the Subscription Agreement is set by the Committee for all Eligible Employees with respect to such Offering Period. 6. Payment for Shares. (a) At the time a Participant files his or her Subscription Agreement, such Participant shall designate the portion of his or her Eligible Compensation that he or she elects to have withheld during the applicable Offering Period. Payroll deductions shall be made on each pay date during the Offering Period at a whole percentage rate not to exceed 15%, or such other amount determined by the Committee, of the Eligible Compensation which a Participant receives on each pay date during the Offering Period or such other limitation as the Committee may establish from time to time in its discretion; provided, that no more than $30,000 of a Participant’s Eligible Compensation may be withheld during any calendar year. (b) A Participant may not make any separate cash payment into his or her Participant Account. (c) A Participant may discontinue his or her participation in the Plan as provided in Section 11, but no other change can be made during an Offering Period and, for the avoidance of doubt, a Participant may not alter the amount of his or her Eligible Compensation deductions for that Offering Period, unless otherwise permitted by the Committee. (d) Unless otherwise specified by a Participant prior to the Enrollment Date of any subsequent Offering Period by completing a Committee-specified process, a Participant shall be deemed to have elected to participate in each subsequent Offering Period to the same extent and in the same manner as the prior Offering Period, subject to the terms and conditions of this Plan and the applicable Subscription Agreement. (e) Notwithstanding the foregoing, the Committee may, in its sole discretion, permit Participants to pay the subscription amount under their Subscription Agreements in a manner different than the payroll deduction procedure described above. 7. Grant of Option. (a) On the Enrollment Date for each Offering Period, each Participant shall be granted an option to purchase on the applicable Exercise Date, a maximum number of Shares determined by the Committee in its discretion; provided, however, that the number of Shares subject to such option shall be reduced, if necessary, to a number of Shares that would not exceed the limitations described in Section 3(b), Section 6(a) and Section 13(a) hereof.
(b) The exercise price per Share offered in a given Offering Period (the “Exercise Price”) shall be determined in the discretion of the Committee, and is expected to be 85% of the Fair Market Value on the Exercise Date, unless a different exercise price is established for such Offering Period in the discretion of the Committee. 8. Exercise of Option. The Participant’s option for the purchase of Shares will be exercised automatically on the Exercise Date of such Offering Period by purchasing the maximum number of Shares subject to such option which may be purchased at the Exercise Price with the funds in his or her Participant Account unless, prior to such Exercise Date, the Participant has withdrawn from the Offering Period pursuant to Section 11. During a Participant’s lifetime, a Participant’s option to purchase Shares hereunder is exercisable only by such Participant. 9. Delivery. Unless otherwise provided by the Company, the Stock Administrator shall hold Shares issued pursuant to the exercise of the option until any such Shares are distributed to the Participant, transferred or sold in accordance with procedures established from time to time by the Company or the Stock Administrator, including any Applicable Holding Period. Following any Applicable Holding Period, Shares shall be delivered as soon as reasonably practicable after termination of a Participant’s Continuous Status as an Employee or receipt of such request by the Participant for delivery of all Shares, subject to compliance with all applicable law. 10. Dividends. Shares received upon exercise of an option shall be entitled to receive dividends on the same basis as other outstanding Shares. A Participant will not be entitled to any dividends with respect to options to purchase Shares under the Plan. 11. Withdrawal; Termination of Employment. (a) A Participant may withdraw all, but not less than all, of the payroll deductions credited to his or her Participant Account for the applicable Offering Period by delivery to the Stock Administrator of notice, in the form specified by the Company, on any date up to a certain number of days prior to the Exercise Date to be specified by the Stock Administrator or to be provided for in the applicable Subscription Agreement. All of the Participant’s payroll deductions credited to his or her Participant Account for such Offering Period will be paid to such Participant as soon as reasonably practicable after receipt of his or her notice of withdrawal. Such withdrawal shall permanently terminate the Participant’s participation for the Offering Period in which the withdrawal occurs. (b) In the event of the termination on or before the Exercise Date of the Participant’s Continuous Status as an Employee for any reason, he or she will be deemed to have elected to withdraw from the Plan, and the Participant or his or her Beneficiary (in the event of such Participant’s death) shall receive any funds in his or her Participant Account as soon as reasonably practicable after the date of such withdrawal. A Participant who goes on a leave of absence shall be permitted to remain in the Plan and shall automatically be enrolled in subsequent Offering Periods under the Plan. Eligible Compensation deductions, as applicable, for a Participant who has been on a leave of absence will resume upon return to work at the same rate as in effect prior to such leave. (c) A Participant’s withdrawal from one Offering Period will not have any effect upon his or her eligibility to participate in a different Offering Period or in any similar Plan which may hereafter be adopted by the Company. 12. Interest. No interest shall accrue on the Eligible Compensation deductions of a Participant or on any other amounts in his or her Participant Account.
13. Shares. (a) The maximum number of Shares which shall be made available for sale under the Plan shall be applicable Subscription Agreement may be made available for sale pursuant to a new Subscription Agreement under the Plan. (b) If, on a given Exercise Date, the Shares with respect to which options are to be exercised exceed the Shares then available under the Plan, the Committee shall make a pro rata allocation of the remaining Shares that are available for purchase in as uniform a manner as shall be reasonably practicable and as it shall determine to be equitable. In such event, the Company shall give notice to each Participant of such reduction in the number of Shares which such Participant shall be allowed to purchase. Notwithstanding anything to the contrary herein, the Company shall not be obligated to issue Shares hereunder if, in the opinion of the Company, such issuance would constitute a violation of federal or state securities laws or regulations, the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded or the laws of any country. 14. No Rights as a Shareholder. Neither the Participant nor his or her Beneficiaries will have any interest or other right in, or dividend or voting rights with respect to, Shares covered by his or her option until such option has been exercised and the related Shares have been purchased under the Plan. 15. Administration. (a) The Plan shall be administered by the Committee. All decisions of the Committee shall be final, conclusive and binding upon all parties, including the Company, its shareholders and Participants and any Beneficiaries thereof. The Committee may issue rules and regulations for administration of the Plan. It shall meet at such times and places as it may determine. (b) Subject to the terms of the Plan and applicable law, the Committee (or its delegate) shall have the full power and authority to: (i) designate Participants; (ii) direct the administration of the Plan by the Stock Administrator in accordance with the provisions herein set forth; (iii) adopt rules of procedure and regulations necessary for the administration of the Plan, provided that such rules are not inconsistent with the terms of the Plan; (iv) determine, in its sole discretion, all questions with regard to rights of Employees and Participants under the Plan, including but not limited to, the eligibility of an Employee to participate in the Plan and the range of permissible percentages of Eligible Compensation an Eligible Employee may specify to be withheld and the maximum amount; (v) enforce the terms of the Plan and the rules and regulations it adopts; (vi) direct or cause the Stock Administrator to direct the distribution of the Shares purchased hereunder; (vii) furnish or cause the Stock Administrator to furnish the Employer with information which the Employer may require for tax or other purposes; (viii) engage the service of counsel (who may, if appropriate, be counsel for the Employer) and agents whom it may deem advisable to assist it with the performance of its duties; (ix) prescribe procedures to be followed by Eligible Employees in electing to participate herein; (x) receive from each Employer and from Eligible Employees such information as shall be necessary for the proper administration of the Plan; (xi) maintain, or cause the Stock Administrator to maintain, separate accounts in the name of each Participant to reflect his or her Participant Account under the Plan; (xii) interpret and construe the Plan in its sole discretion; (xiii) correct any defect, supply any omission and reconcile any inconsistency in the Plan in the manner and to the extent it shall deem
desirable to carry the Plan into effect; (xiv) make any changes or modifications necessary to administer and implement the provisions of the Plan in any foreign country to the fullest extent possible; and (xv) delegate any of its duties and authorities under the Plan to such parties or committees as it may determine. Notwithstanding anything to the contrary contained herein, the Board may, in its sole discretion, at any time and from time to time, administer the Plan. In any such case, the Board shall have all of the authority and responsibility granted to the Committee herein. Transferability. Neither any monies credited to a Participant’s Participant Account nor any rights with regard to the exercise of an option to purchase Shares under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way (other than by will or by laws of descent and distribution) by the Participant. Any such attempt at assignment, transfer, pledge, or other disposition shall be without effect, except that the Company shall treat such act as an election to withdraw funds in accordance with Section 11. 17. Use of Funds. All Eligible Compensation deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such funds. 18. Reports. Individual Participant Accounts will be maintained for each Participant, and statements will be made available to Participants promptly following an Exercise Date, which statements will set forth the amount of Eligible Compensation deductions for the applicable Offering Period, the per-Share purchase price, the number of Shares purchased, and the remaining cash balance, if any. 19. Adjustments Upon Changes in Capitalization and Certain Transactions. In the event of (a) any merger, reorganization, consolidation, recapitalization, dividend or distribution (whether in cash, shares or other property, other than a regular cash dividend), stock split (including a stock split in the form of a stock dividend), reverse stock split, spin-off or similar transaction or other change in corporate structure affecting the Shares or the value thereof, such adjustments and other substitutions shall be made to the Plan and to outstanding options as the Committee, in its sole discretion, deems equitable or appropriate taking into consideration any applicable accounting and tax consequences, including such adjustments in the limitations in Section 7(a) and Section 13 and in the class and number of Shares and Exercise Price with respect to outstanding options under the Plan; and (b) any transaction or event described in (a) above, or any unusual or nonrecurring transaction or events affecting the Company or any changes in applicable laws, regulations or accounting principles, the Committee, in its sole discretion and on such terms and conditions as it deems appropriate, is hereby authorized to: (i) provide for either (X) termination of any outstanding option in exchange for an amount of cash, if any, equal to the amount that would have been obtained upon exercise of such option had such option been currently exercisable or (Y) the replacement of such outstanding option with other rights or property selected by the Committee in its sole discretion; (ii) provide that the outstanding options under the Plan shall be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar rights covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and exercise prices; (iii) make adjustments in the number and type of Shares (or other securities or property) subject to outstanding options under the Plan and/or in the terms and conditions of outstanding options and options which may be granted in the future; (iv) shorten the Offering Period then in progress and set a new Exercise Date, which shall be a date immediately prior to the date of any transaction or event described in (a) above and provide for any other necessary procedures to effectuate such actions; and/or (v) provide that all outstanding options shall terminate without being exercised. Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the
number of shares of any class or any dissolution, liquidation, merger or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Committee, no issuance by the Company or shares of stock of any class, or securities convertible into stock of any class, shall affect, and no adjustment by reason thereof, shall be made with respect to, the number of Shares subject to an option or the grant or Exercise Price of any option. 20. Amendment or Termination. (a) The Board may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time and for any reason; provided, however, that the Board (i) shall not, without the approval of the shareholders of the Company, increase the maximum number of Shares which may be issued under the Plan (except pursuant to Section 19) and (ii) shall otherwise obtain shareholder approval of any amendment, alteration, suspension, discontinuance or termination of the Plan, if, and to the extent, required by applicable law. Except as specifically provided in the Plan or as required to obtain a favorable ruling from the Internal Revenue Service, no such amendment, alteration, suspension, discontinuation or termination of the Plan pursuant to this Section 20 may make any change in any option theretofore granted which adversely affects the rights of any Participant without the consent of such Participant. (b) The Plan shall automatically terminate on the Exercise Date that Participants become entitled to purchase a number of Shares greater than the number available for purchase under Section 13. 21. Notices. (a) All notices or other communications by an Eligible Employee or a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. (b) All notices or other communications by the Employer, the Company, the Board or the Committee under or in connection with the Plan shall be deemed to have been duly given when (i) personally delivered, including electronic transmission in such form as the Board or the Committee shall direct, or (ii) placed in the mail of the country of the sender in an envelope addressed to the last known address of the person to whom the notice is given. 22. Shareholder Approval. The effectiveness of the Plan shall be subject to approval by the shareholders of the Company within 12 months before or after the date the Plan is adopted by the Board. Notwithstanding any provision to the contrary, failure to obtain such shareholder approval shall void the Plan, any options granted under the Plan, any Share purchases pursuant to the 23. Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such Shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated under both sets of laws and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.
24. Withholding; Disqualifying Disposition. Notwithstanding any other provision of the Plan, at the time a Participant’s option under the Plan is exercised, in whole or in part, or at the time some or all of the Shares issued under the Plan are disposed of by a Participant, the Participant must make adequate provision for his or her Employer’s federal, state, or other tax withholding obligations, which arise upon the exercise of the option or the disposition of the Shares. At any time, the Company may, but shall not be obligated to, withhold from the Participant’s compensation, the amount necessary for the Company to meet applicable tax withholding obligations, including any withholding required to make available to the Company any tax deductions or benefits attributable to a sale or early disposition of Shares by the Participant. 25. Effective Date of the Plan. The Plan shall be effective as of the Effective Date, subject to its approval by the shareholders of the Company as described in Section 22. 26. Term of Plan. The Plan shall continue in effect until the earliest to occur of (a) the ten year anniversary of the Effective Date; (b) the maximum number of Shares available for issuance under the Plan have been issued in accordance with Section 20(b); or (c) the Board terminates the Plan in accordance with Section 20(a). 27. No Rights Implied. Nothing contained in the Plan, any modification or amendment to the Plan, or the creation of any Participant Account, the execution of any Subscription Agreement, or the issuance of any Shares, shall give any Employee or Participant any right to continue his or her employment, any legal or equitable right against the Employer or Company or any officer, director, or employee of the Employer or the Company, or interfere in any way with the Employer’s or the Company’s right to terminate or otherwise modify an Employee’s employment at any time, except as expressly provided by the Plan. 28. Severability. If any provision of the Plan is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any person or entity, or would disqualify the Plan under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan, such provision shall be stricken as to such jurisdiction, person or entity, and the remainder of the Plan shall remain in full force and effect. 29. Waiver of Notice. Any person entitled to notice under the Plan may waive such notice. 30. Successors and Assigns. The Plan shall be binding upon all persons entitled to purchase Shares under the Plan, their respective heirs, legatees, and legal representatives, including, without limitation, such person’s estate and the executors, any receiver, trustee in bankruptcy or representative of creditors of such person, and upon the Employer, its successors and assigns. 31. Data Privacy. By participating in the Plan, the Participant consents to the holding and processing of personal information provided by the Participant to the Company or any subsidiary, trustee or third-party service provider, for all purposes relating to the operation of the Plan. These include, but are not limited to: (a) administering and maintaining Participant records; (b) providing information to the Company, Subsidiaries, trustees of any employee benefit trust, registrars, brokers or third-party administrators of the Plan; (c) providing information to future purchasers or merger partners of the Company or any subsidiary, or the business in which the Participant works; and (d) transferring information about the Participant to any country or territory that may not provide the same protection for the information as the Participant’s home country.
32. Headings. The titles and headings of the sections are included for convenience of reference only and are not to be considered in construction of the provisions hereof. 33. Governing Law; Venue. The Plan shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of laws thereof, or principles of conflicts of laws of any other jurisdiction that could cause the application of the laws of any jurisdiction other than the State of Delaware. The exclusive venues for all disputes arising out of the Plan shall be the United States District Court for the Eastern District of Michigan and the Third Judicial Circuit, Wayne County, Michigan (the “Agreed-Upon Venues”), and no other venues. The Company and any Participants to the Plan stipulate that participation in the Plan is an arms-length transaction entered into by sophisticated parties, and that the Agreed-Upon Venues are convenient, are not unreasonable, unfair, or unjust, and will not deprive any party of any remedy to which it may be entitled. The Company and any Participants to the Plan further agree to consent to the dismissal of any action arising out of the Plan that may be filed in a venue other than one of the Agreed-Upon Venues; the reasonable legal fees and costs of the party seeking dismissal for improper venue will be paid by the party that filed suit in the improper venue.
ROCKET Companies ROCKET COMPANIES, INC. 1050 WOODWARD AVENUE DETROIT, MI 48226 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on June BLUE OR BLACK INK AS FOLLOWS: V15414-P91595 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The 0001805284 rkt:EquityAwardsAdjustmentsYearEndFairValueOfAwardsGrantedInCurrentYearMember ecd:NonPeoNeoMember 2020-01-01 2020-12-31 |