Skills and Qualifications: Mr. Silva brings to the Board extensive executive leadership experience in franchise operations and business strategy. His deep knowledge of operational, financial and legal matters, including with respect to risk management, also led the Board to consider him well-qualified to serve as a Director of the Company.
Sherry M. SmithDirector since December 2014
| | | | | | | | | | | Standing Committees:
▪Audit (since Dec. 2014) ▪Compensation & Talent Management (since May 2022) Additional Public Directorships (current):
| Business Experience and Biographical Information:Ms. Smith, age 62, served as Chief Financial Officer and Executive Vice President of SuperValu Inc., a grocery retailer and food distributor, from December 2010 until August 2013. She previously served as Senior Vice President of Finance from 2006 until 2010, and before that as Senior Vice President of Finance and Treasurer from 2002 until 2005, and in various other capacities with SuperValu from 1987 to 2001, including accounting, audit, controller, compensation, mergers and acquisitions, strategic planning and treasury. Ms. Smith was a member of the Board of Directors of Tuesday Morning Corporation from 2014 to 2022. ▪Skills and Qualifications: Ms. Smith is well qualified to serve as a member of the Board based on her leadership qualities developed from her experience while serving as a senior executive and as Chief Financial Officer of Supervalu Inc., the breadth of her experiences in auditing, finance, accounting, compensation and strategic planning, and her subject matter knowledge in the areas of finance and accounting.
Public Directorships: Ms. Smith currently serves on the boards of Deere & Company ▪ and Piper Sandler Companies
|
Business Experience and Biographical Information:
Ms. Smith, age 61, served as Chief Financial Officer and Executive Vice President of SuperValu Inc., a grocery retailer and food distributor, from December 2010 until August 2013. She previously served as Senior Vice President of Finance from 2006 until 2010, and before that as Senior Vice President of Finance and Treasurer from 2002 until 2005, and in various other capacities with SuperValu from 1987 to 2001, including accounting, audit, controller, compensation, mergers and acquisitions, strategic planning and treasury. Ms. Smith was a member of the Board of Directors of Tuesday Morning Corporation from 2014 to 2022.
Skills and Qualifications: Ms. Smith is well qualified to serve as a member of the Board based on her leadership qualities developed from her experience while serving as a senior executive and as Chief Financial Officer of Supervalu Inc., the breadth of her experiences in auditing, finance, accounting, compensation and strategic planning, and her subject matter knowledge in the areas of finance and accounting.
| | | | | | | Christopher S. Terrill Chair of the Product & Technology Committee | | | | | | | | | | | | | 31 | | | | |
Christopher S. TerrillDirector since July 2016
| | | | | | | | | | | Standing Committees:
▪Product & Technology Chair (since Aug. 2018) ▪Nominating and Corporate Governance (since May 2022) Additional Public Directorships (current):
| ▪Business Experience and Biographical Information: Vacasa,Mr. Terrill, age 56, served as the Chief Executive Officer and a director of ANGI Homeservices, an international digital marketplace for home services that helps connect consumers with home professionals in the United States and other countries under various brands, including HomeAdvisor® and Angie's List, among others, from September 2017 to November 8, 2018. Prior to assuming that role in September 2017, Mr. Terrill served as Chief Executive Officer of HomeAdvisor.com, then a wholly-owned subsidiary of IAC, from May 2011. For two years prior thereto, he held senior e-commerce marketing positions at Nutrisystem.com, a leader in the direct-to-consumer diet space. For one year prior to joining Nutrisystem.com, he served as Vice President of Product and Marketing for Blockbuster.com, the online division of Blockbuster Inc. Additionally, he spent six years with Match.com where he held several senior e-commerce marketing roles. From September 2020 until December 2022, he served as Executive Co-Chairman of Z-Work Acquisition Corp. Mr. Terrill also was a member of the Board of Directors of Terminix Global Holdings Inc. (from 2021 to 2022) and Porch Group, Inc. (from 2020 to 2022).
▪Skills and Qualifications: Mr. Terrill brings to the Board relevant experience in the areas of executive leadership, strategic planning and marketing and managing consumer behavior, including direct to consumer brands in the real estate services industry. Mr. Terrill is a seasoned Internet veteran who has specialized in consumer online subscription and marketplace business models.
Public Directorships: He currently serves on the boards of Vacasa, Inc. and Yelp, Inc. |
Business Experience and Biographical Information: Mr. Terrill, age 55, served as the Chief Executive Officer and a director of ANGI Homeservices, an international digital marketplace for home services that helps connect consumers with home professionals in the United States and other countries under various brands, including HomeAdvisor® and Angie's List, among others, from September 2017 to November 8, 2018. Prior to assuming that role in September 2017, Mr. Terrill served as Chief Executive Officer of HomeAdvisor.com, a wholly owned subsidiary of IAC, from May 2011. Prior thereto, he held senior marketing positions at Nutrisystem.com, a leader in the direct-to-consumer diet space, serving as its Chief Marketing Officer and Executive Vice President of eCommerce from June 2009 to May 2011 and Senior Vice President of e-commerce from January 2007 to June 2009. For one year prior to joining Nutrisystem.com, he served as Vice President of Product and Marketing for Blockbuster.com, the online division of Blockbuster Inc. Additionally, he spent six years with Match.com where he held several senior marketing roles, his last being Vice President of New Brands & Verticals, where he developed and launched new online brands, including Chemistry.com. From September 2020 until December 2022, he served as Executive Co-Chairman of Z-Work Acquisition Corp., a special purpose acquisition company (or SPAC) that ceased operations in December 2022. Mr. Terrill also was a member of the Board of Directors of Terminix Global Holdings Inc. (from 2021 to 2022) and Porch Group, Inc. (from 2020 to 2022).
Skills and Qualifications: Mr. Terrill brings to the Board relevant experience in the areas of executive leadership, strategic planning and marketing and managing consumer behavior, including direct to consumer brands in the real estate services industry. Mr. Terrill is a seasoned Internet veteran who has specialized in consumer online subscription and marketplace business models.
| | | | | | | Felicia Williams Chair of the Audit Committee | | Director since March 2021 | | | | | | | | | | | Standing Committees:
▪Audit Chair (since(Chair since May 2022, member since March 2021) Additional Public Directorships (current):
▪
| Business Experience and Biographical Information: Ms. Williams, age 58, served in senior finance leadership roles at Macy’s, Inc. for 19 years, including Interim Chief Financial Officer from June 2020 to November 2020, Senior Vice President, Controller and Enterprise Risk Officer, including oversight of the company's information security and data privacy functions, from June 2016 to June 2020, Senior Vice President, Finance and Risk Management from February 2011 to June 2016 and other roles across key corporate finance functions at Macy’s, including treasury, investor relations, risk management, financial services, financial planning and analysis, and internal audit. Ms. Williams most recently served as Macy’s Fellow for CEO Action for Racial Equity, the first business-led coalition of its kind with a mission to advance racial equity through public policy from November 2020 to October 2023. Prior to her time at Macy’s, Ms. Williams served in various financial positions at the Coca-Cola Hellenic Bottling Company in Athens, Greece, and The Coca-Cola Company in Atlanta, Georgia, from June 1994 to June 2004; at Bristol-Myers Squibb in New York City from May 1990 to June 1994; and at Arthur Andersen & Company in Washington, D.C., from June 1987 to May 1990. Ms. Williams was a member of the Board of Directors of Meridian Bioscience, Inc. from 2018 to January 2023. Skills and Qualifications: Ms. Williams has extensive leadership experience and broad-based knowledge of the financial and operational issues affecting complex organizations based on the breadth of her experience in finance, accounting, auditing, and enterprise risk management. Public Directorships: She serves as a Director and Chair of the Audit Committee of Paycom Software, Inc. |
Business Experience and Biographical Information:
Ms. Williams, age 57, has served in senior finance leadership roles at Macy’s, Inc., a premier omni-channel fashion retailer, for the past 17 years, including as an executive officer of Macy’s from 2016 to 2020 in the roles of Interim Chief Financial Officer from June 2020 to November 2020 and Senior Vice President, Controller and Enterprise Risk Officer, including oversight of the company's information security and data privacy functions, from June 2016 to June 2020. She served as Senior Vice President, Finance and Risk Management from February 2011 to June 2016 and prior thereto across key corporate finance functions at Macy’s, including treasury, investor relations, risk management, financial services, financial planning and analysis, and internal audit. Ms. Williams is currently serving as Macy’s Fellow for CEO Action for Racial Equity, the first business-led coalition of its kind with a mission to advance racial equity through public policy. Prior to her time at Macy’s, Ms. Williams served in various financial positions at the Coca-Cola Hellenic Bottling Company, The Coca-Cola Company, Bristol-Myers Squibb, and Arthur Andersen & Company. Ms. Williams was a member of the Board of Directors of Meridian Bioscience, Inc. from 2018 to January 2023.
Skills and Qualifications: Ms. Williams is well-qualified to serve as a member of the Board based on the breadth of her experience in finance, accounting, auditing and enterprise risk management. She brings to the Board extensive leadership experience and broad-based knowledge of the financial and operational issues affecting complex organizations.
| | | | | | | Michael J. Williams Chairman of the Board | | | | | | | | | | | | | 32 | | | | |
Michael J. WilliamsDirector since November 2012
| | | | | | | | | | | Standing Committees:
▪Audit (since Nov. 2012) ▪Nominating & Corporate Governance (since Nov. 2012, Chair (sincefrom Aug. 2013; member since Nov. 2012)2013 to May 2023) Additional Public Directorships (current):
▪None
|
Business Experience and Biographical Information: Mr. Williams, age 65,Business Experience and Biographical Information: Mr. Williams, age 66, has served as our Independent Chairman of the Board since December 31, 2017, having previously served as our Lead Independent Director (or Presiding Director) since November 2013. Mr. Williams served as a senior advisor to Sterling Partners, a private equity firm, and as non-executive chairman of Prospect Mortgage, one of its portfolio companies, from November 2012 to June 2014. He acted as the Chairman and Chief Executive Officer of Prospect Mortgage, from June 2014 until the sale of that company in February 2017. Mr. Williams spent more than 20 years at Fannie Mae, most recently as our Independent Chairman of the Board since December 31, 2017 having previously served as our Lead Independent Director (or Presiding Director) since November 2013. Mr. Williams served as a senior advisor to Sterling Partners, a private equity firm, and as non-executive chairman of Prospect Mortgage, one of its portfolio companies, from November 2012 to June 2014. He acted as the Chairman and Chief Executive Officer of Prospect Mortgage, from June 2014 until the sale of that company in February 2017. He was President and Chief Executive Officer of Fannie Mae, and a member of its Board of Directors and executive committee, from April 2009 to June 2012. He previously served as Fannie Mae's Executive Vice President and Chief Operating Officer from November 2005 to April 2009. Mr. Williams also served as Fannie Mae's Executive Vice President for Regulatory Agreements and Restatement from February 2005 to November 2005, as President, Fannie Mae eBusiness from July 2000 to February 2005 and as Senior Vice President, e-commerce from July 1999 to July 2000. Prior to this, Mr. Williams served in various roles in the Single-Family and Corporate Information Systems divisions of Fannie Mae. Mr. Williams joined Fannie Mae in 1991.
Skills and Qualifications: Mr. Williams' extensive experience in business, finance, accounting, mortgage lending, real estate and the regulation of financial institutions, which he gained during his tenure at Fannie Mae, make him well qualified to serve on the Board. | |
EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSISCompensation Discussion and Analysis
The Compensation Discussion and Analysis, or the CD&A, focuses on the compensation of our named executive officers (NEOs) for 20222023: ▪Ryan M. Schneider, Chief Executive Officer and President ▪Charlotte C. Simonelli, Executive Vice President, Chief Financial Officer and Treasurer ▪Melissa K. McSherry, Executive Vice President and Chief Operating Officer(1) ▪Marilyn J. Wasser, Executive Vice President, General Counsel and Corporate Secretary ▪Susan Yannaccone, President and Chief Executive Officer, Anywhere Brands and Anywhere Advisors (1) Ms. McSherry served as set forth below. We referChief Operating Officer until February 26, 2024, when she transitioned to this groupa non-officer role as our "named executive officers" or "NEOs."strategic advisor to the Company until April 1, 2024. Executive Summary 2023 Strategic Highlights The challenges in the residential real estate market continued in 2023, with sales of existing homes continuing to fall (sales have declined 33% since the beginning of 2022, according to Fannie Mae). Despite these challenges, we maintained focus on our strategic priorities. Specifically, we reduced debt, realized substantial cost savings and mitigated substantial litigation uncertainties (avoiding a devastating, multi-billion dollar judgment in our sell-side antitrust class action litigation) while still generating $200 million of Operating EBITDA. Management continued to focus on improving the Company's debt profile in 2023, reducing the principal amount of debt by $308 million through a combination of debt exchange transactions, open market repurchases and reduction of our outstanding revolver balance. The debt exchange transactions reduced our total principal amount of debt by approximately $160 million while incurring minimal incremental interest expense and retaining our flexibility and long-dated maturities. Our Named Executive Officersopportunistic open market repurchases of Senior Notes due 2029 and Senior Notes due 2030 allowed us to capture approximately $20 million of discount, further reducing the principal amount of our debt by approximately $70 million. We also reduced the amount outstanding under our revolving credit facility by $65 million. These achievements were in addition to our debt profile improvements between 2020 and 2022, when we reduced the principal amount of our debt by $600 million, extended our maturities, shifted our debt from mostly secured debt to unsecured debt and reduced our interest expense.  Finally, the Company was the first to reach a nationwide settlement of the sell-side antitrust class actions against it and other industry participants. The $83.5 million settlement releases the Company, and all its subsidiaries, brands, affiliated agents, and franchisees. Subsequent to our settlement, the non-settling defendants received a $1.785 billion (before trebling) judgment based on claims representing a small fraction of the potential nationwide claims. In addition, the non-settling defendants and other industry participants now face a significant number of additional cases brought in other jurisdictions on similar grounds. The Company’s settlement, which was driven by our management team in close collaboration with our Board, avoided a devastating monetary judgment, provided a defense against the additional sell-side antitrust cases being brought around the country, removed significant future uncertainty for the Company, its employees, agents and franchisee, greatly reduced ongoing legal expenses and management distraction, and served the best interests of the Company, our affiliated agents and franchisees, and stockholders.
Executive Summary
2022 Strategic Execution
Despite a challenging 2022, Anywhere Real Estate generated Operating EBITDA throughout the year.
At the Company's Investor Day in May 2022, we announced our rebranding and articulated a five-year strategic plan designed to deliver an improved homesale transaction experience to customers and capitalize on our existing strengths, including:
▪Best-in-class franchisor
▪Luxury leadership
▪National scale, fully integrated owned brokerage, title and mortgage
▪Best network of trusted independent sales agents
| | | | | | | | | | | | | | | | | | | | Independent sales agents affiliated with our company owned brokerages grew ~4% on a like-for-like basis in 2022 over 2021 | | | |
Management continued its work to improve the Company's debt profile throughout 2022 as well, including extending its revolving credit facility to July 2027 (subject to certain earlier springing maturity dates) in the third quarter, strategically repurchasing senior notes at a discount in the second2023 Financial Results amid Industry Downturn and third quarters, and redeeming the balance of our 4.875% senior notes due 2023 during the fourth quarter of 2022.Uncertainty
As the residential real estate market worsened during the year, we boosted our commitment to execute against cost savings initiatives, increasing our initial target of $70 million to $150 million of realizable cost savings in 2022.
2022 Financial Results
Weakening market conditions in the residential real estate industry accelerated during the second half of
2022, with rapidly rising mortgage rates, high inflation, reduced affordability and broader macroeconomic concerns driving significant declines in homesale transaction volume, as well as purchase and refinancing unit and mortgage origination volume. While the low inventory environment further contributed to declines in closed homesale sides, insufficient inventory levels also strongly contributed to a higher average homesale price in the first three quarters of 2022.
From March to December 2022, the Federal Reserve Board increased interest rates by over 400 basis points. On December 31, 2022, mortgage rates on a 30-year fixed-rate mortgage were 6.36% - more than double the rate of 3.10% on December 31, 2021, according to Freddie Mac.
Combined homesale transaction volume (transaction sides multiplied by average sale price) for our Company-owned and franchised brokerages declined 14% compared with 2021. Likewise, at our title operations, refinancing title and closing units declined 67%, purchase title and closing units declined 18%, and equity in earnings from our mortgage origination joint venture declined $71 million in 2022, in each case as compared to the prior year.
▪Revenue of $6.9$5.6 billion declined 13%18% year-over year, with a net loss of $287$97 million (which included $470$25 million and $25 million in non-cash goodwill and intangible asset impairments)impairments, respectively) ▪Operating EBITDA* of $449$200 million decreased 50%55% over 20212022 ▪Free Cash Flow* of $(159)$67 million vs. $553up from negative $159 million in 20212022 * See Annex A for definition & reconciliation of the non-GAAP measures referenced in this section.
According to Freddie Mac, average mortgage rates for a 30-year, conventional, fixed-rate mortgage more than doubled in 2022 and in the fourth quarter of 2023 reached the highest levels in more than two decades. Federal interest rates are one of the factors that contribute to mortgage rates, and the Federal Reserve aggressively raised the target federal funds rate by over 400 basis points during 2022 and by an additional 100 basis points during 2023. The rapidly rising mortgage rates combined with high inflation, reduced affordability, low inventory levels and broader macroeconomic concerns have driven significant declines in homesale transactions since mid-2022 such that the industry is now at the lowest transaction levels since 1995. Additionally, the residential real estate industry has been under margin pressure as brokers' share of homesale commissions has dramatically decreased in recent years (Anywhere's average share of homesale broker commissions, commonly referred to as our "split", declined over 1000 basis points between 2016 and 2022). In addition to these economic pressures, there is unprecedented uncertainty about the future structure of the residential real estate industry, with significant litigation and regulatory headwinds with particular focus on antitrust and competition. While we have settled our sell-side antitrust case and are not subject to the large verdict entered against the other defendant's in those cases, the overall industry will continue to be impacted by the enormity of the verdict and the dozens of new copycat cases filed across the country. Given the combination of the prospect of years of new copycat litigation and appeals of the initial verdict, there is substantial pressure for industry change. There is considerable uncertainty about potential changes to industry rules that may adversely impact commissions. Such industry structure changes could arise from litigation and injunctive relief. The industry also still faces regulatory or governmental actions, market forces, changing competitive dynamics and changes in consumer preferences. Moreover, we believe certain industry participants, including listing aggregators and participants pursuing non-traditional methods of marketing real estate, are pursuing changes to the rules and regulations of MLSs and NAR that are intended to benefit their competitive position to the disadvantage of historical real estate brokerage models. | | | 2022 Key Leadership Changes |
We recruited new talent2023 Compensation Decisions in Light of Industry Downturn and restructured core roles to leverage strengths and accelerate our long-term strategy:
▪Susan Yannaccone as our CEO & President of both Anywhere Advisors and Anywhere Brands, leading both our company owned brokerage and franchise operationsUncertainty
▪Donald CaseyThe cyclical nature of the real estate industry has always posed certain challenges in an expanded operational roledesigning compensation programs that meet each of the components of our compensation philosophy of pay-for-performance, rewarding our NEOs for their achievements and reinforcing ethical behavior. However, the current downturn, now entering its third year, is historic in both its magnitude and duration and has dramatically reduced or eliminated the retentive value of outstanding awards in our incentive compensation programs for reasons outside of our control.
Specifically, the downturn had a significant impact on the attainability of our CFCF goals for our Company-owned brokerage2021-2023 and title businesses and2022-2024 PSU award cycles. Performance goals for these cycles assumed a pre-March 2022 macroeconomic environment. As illustrated in assuming leadershipthe tables below, the downturn since the grant of Cartus relocation ▪Melissa McSherrythose awards has had a significant impact on the realized value or expected realized value for these cycles (table as our Chief Operating Officer, leading our strategic initiatives to modernize the manner in which we deliver our products and services and create an easier and integrated experience for a consumer’s next move
▪Tony Kueh as our Chief Product Officer
2022 Investor Outreach Program
At our 2022 Annual Meeting of Stockholders, our say-on-pay proposal received support from 71.8% of the votes cast—a lower level of support than we received at our last several meetings where support ranged from 88.6% to 96%.
In the spring of 2022, in advance of our 2022 Annual Meeting of Stockholders, and in the fall of 2022, we reached out to stockholders representing over 80% in the aggregate of our outstanding shares and met with holders of approximately 75% of our outstanding shares.
Michael Williams, Chairman of the Board, met with substantially all of our stockholders who accepted our invitation. Mr. Williams was joined by either Enrique Silva (who serves as our Compensation Committee Chair since May 2022) or Duncan Niederauer (who served as our Compensation Committee Chair until May 2022) at substantially all of such meetings.
The feedback from these important sessions with our investors was reviewed and discussed with the full Board as well as with the Compensation Committee.
A key objective of our 2022 Investor Outreach was to listen to our stockholders and better understand their perspectives on our executive compensation program and, with respect to the fall investor outreach, any concerns that motivated the lower level of support for our 2022 “say-on-pay” vote.
Many of our stockholders noted their support for our executive compensation program, including the high levels of "at-risk" and performance-based compensation granted, in particular to the CEO—as well as our use of three-year performance share units for at least a majority of long-term incentive awards.
Responsive action to specific investor feedback relating to our executive compensation program is noted below.
| | | | | | | | | | | | | | | | Topic | Stockholder Feedback | Board Action | | | | | | | A significant number our investors noted their support for our executive compensation program design as articulated in the 2022 proxy statement | The Compensation Committee reaffirmed its commitment to a pay-for-performance compensation program that aligns the interests of our executive officers with our stockholders through an emphasis on the use of rigorous pre-established goals and long-term equity awards
| | | | | | | Certain investors noted the volatility in award payouts under the annual cash incentive plan and suggested design and/or metric considerations, including those that might moderate extreme variations such as metrics that take into account key Company objectives, including cost reductions | The 2023 annual cash incentive plan has been designed to reduce payout volatility by:AUDIT MATTERS | ▪funding 30% of the plan based on the achievement of strategic and business objectives related to operational excellence (including cost savings), consumer experience and talent
▪funding the remaining 70% of the plan based on achievement of a budget-aligned Plan Operating EBITDA target
▪requiring a higher multiple of Plan Operating EBITDA to achieve maximum funding and a lower multiple to obtain threshold funding, while remaining in line with the Company's peers
▪reducing Compensation Committee discretion with respect to individual payouts to +/-25% of the amount funded under the plan
▪retaining the requirement that total payouts under the plan may not exceed aggregate plan funding
See2023 Annual Incentive Plan—page49FAQ |
| | | | | | | | | | | | | | | | | | PSU Award Cycle
and Metric | | | | 2021 | 2022 | 2023 | 2024 | 2025 | 2021-2023 PSU Award(1) | Completed in 2023 (Aggregate Realized Value: 23%) | | | RTSR(2) | No Payout | | | | CFCF | Below Target Payout (77%) | | | 2022-2024 PSU Award(3) | | 66% Completed | | RTSR(2) | | Tracking Below Threshold | | | CFCF | | Tracking Below Threshold | | 2023-2025 PSU Award(3) | | | 33% Complete | RTSR(2) | | | Tracking at or around Target | | CFCF | | | Tracking at or around Target |
RTSR for completed and outstanding RTSR PSU award cycles is measured against S&P MidCap 400. Strategic Alignment with Compensation(3)Actual results to be determined based upon results under the applicable metric at the conclusion of the applicable 3-year cycle.
OurBeginning in 2022 and continuing through 2023, the Board and Compensation and Talent Management Committee which we refer(referred to in this CD&A as the "Committee," ties a"Committee") had robust discussions regarding how to address the increased retention risk resulting from the significant portiondecline in realizable value of target direct compensation to performance against the annual and long-term metrics that the Committee believes are most directly linked to the successful execution of our strategy and shareholder value, including Operating EBITDA, Free Cash Flowoutstanding equity awards and the generationlow realized value of stockholder returns relative to a general market index. The remaining portion of target direct compensation is paidincentive award payouts in fixed base salary.
In 2022, CEO target direct compensation was:recent years, despite:
▪90% at-riskthe Company's stock performing well compared to its direct competitors (as shown in the following chart), including short- and long-term incentives ▪71%the Company's generation of $200M of operating EBITDA and $67M of free cash flow in equity-based compensation2023 (for comparison, four of the Company's five direct competitors reported either lower or negative operating EBITDA for 2023), of which 60% was granted in the form of performance share units tied to either Cumulative Free Cash Flow (the "CFCF PSUs") or Relative Total Stockholder Return (the "RTSR PSUs")and ▪61% tiedmanagement's exceptional performance during difficult and unexpected market conditions, including, for example, continuing to performance-based metrics, includingimprove the CFCFCompany's debt profile, continuing to realize substantial cost savings, and RTSR PSUs, as well as an annual cash incentive opportunity under the Executive Incentive Plan (the "EIP")reaching a nationwide settlement of its sell-side antitrust class actions.
The Compensation Committee believes that the outcomes for awards with performance periods ended in 2022 demonstrate that our pay-for-performance executive compensation program worked as designed:
▪No payout was made under the 2022 annual cash-based incentive plan tied to Plan Operating EBITDA
▪No payout was made in respect of the three-year performance share units tied to Relative Total Stockholder Return
▪Consistent with our significant generation of Free Cash Flow in 2020 and 2021, the performance share units tied to Cumulative Free Cash Flow paid out at 200%
The aggregate realized value for our NEOs was 71% of target for the 2020-2022 performance share unit cycle (based on our stock price on December 30, 2022).
Additionally, no payout was made under the one-time Market Share Award for the two-year performance period ending September 30, 2022.
| | | CEO Target Direct Compensation (2022) | |
The graphic above is based on value assigned by the Committee to 2022 long-term incentive (equity) awards, rather than the grant date fair value of such awards.
In 2022, target direct compensation for our NEOs (other than our CEO) was on average approximately 70% at-risk and 50% tied to performance metrics. Overall NEO compensation was comprised, on average, of approximately 30% base salary, 30% annual incentive (cash), and 40% long-term incentive (equity)—with half of the equity granted in the form of performance share units and half granted in the form of time-vested restricted stock units.
Target direct compensation does not include the value of the one-time Market Share Performance Award granted in 2020 (see page 49) - which was not earned for the initial performance period; Ms. McSherry's make-whole inducement RSU award granted in connection with her hiring (see page 48); or the amounts vested in 2022 pursuant to a time-vested cash award granted to Ms. Yannaccone in 2019, prior to her being promoted to her current executive position (see page 48), none of which are part of the regular target direct compensation program for executive officers.
Against the backdrop of the historic industry downturn and uncertainty, and the exceptional performance shown by our CEO and management team, the Board considered two compensation actions for our CEO.
The first action was to reward Mr. Schneider for his extraordinary achievements over the past several years under the incredibly challenging and difficult circumstances facing the Company (see "Proxy Summary—Key Business Highlights"on page Table of Contents1 for more details) with a $5 million cash Exceptional Achievements Awards paid in late 2023 but subject to clawback if Mr. Schneider resigns without Good Reason prior to March 1, 2025.Elements of 2022 Target Direct CompensationThe second action was to motivate Mr. Schneider moving forward to strategically position the Company for the eventual anticipated housing market recovery and to steer us through the industry changes that may follow from ongoing industry litigation and potential related injunctive relief, and regulatory actions.
The following table describes each elementBoard believes Mr. Schneider will continue to add exceptional value to the Company. He has become an industry leader, earning the number one ranking as ‘most powerful leader in the residential real estate industry’ by the Swanepoel Power 200. In addition, stockholders have expressed their appreciation and support for his leadership, vision and performance. Given the market challenges going forward, and in consideration of 2022 target direct compensation and describes whythe depressed values of outstanding PSU awards, the Board, on the recommendation of the Committee, has incorporated that element into Anywhere’s executive compensation program.granted a Performance Award to Mr. Schneider consisting of two $5 million tranches which will be payable in cash based on achievement of metrics set by the Committee, as described below. | | | | | | | | | | | | | | | | Award | Performance Period | What Is It?Performance Metric | Why Do We Pay It? |
Base Salary
| | Annual cash salary
| To attract and retain top-tier talent by providing market-competitive fixed pay reflective of the executive’s position, experience, scope of responsibility and contributionSubject to our performance
|
Annual
Incentive
(Cash)
| | Annual performance-based incentive plan, called the Executive Incentive Plan, or EIP, that was funded by results under a Plan Operating EBITDA metric, with payouts determined by each executive's "Relative Individual Performance"
| To drive short-term financial performance, specifically by measuring results under our primary operating metric and the strength of each executive's individual performance (taking into consideration achievement of key strategic and operational objectives, execution of key initiatives and other factors)
|
Long-Term
Incentive
(Equity)
| | Performance share units, or PSUs, are earned based on the achievement of the following pre-established metrics over rolling 3-year cycles:
▪Cumulative Free Cash Flow
▪Relative Total Stockholder Return
| To align compensation with stockholders,
PSUs constitute at least half of the long-term incentive award in 2022 and are designed to incentivize long-term value creation through stock and critical operating performance objectives over rolling 3-year periods
Time-based RSUs serve a retention objective and further align executive interests with those of our stockholders, as the value of the grants increase or decrease with our stock price
| Restricted Stock Units, or RSUs, vesting over a 3-year period$5M 2024 cash performance award | FY 2024 | Cost savings goal established in late 2023 | Early 2025 | March 1, 2026 | | $5M 2025 cash performance award | FY 2025 | To be established by early 2025(1) | Early 2026 | March 1, 2027 |
(1)The Board deferred setting a specific metric for the 2025 performance period to retain flexibility to ensure alignment with the Company's 2025 strategic priorities. For a full description of the Exceptional Achievements Award and the 2024 and 2025 Performance Awards, see "Executive Compensation—CD&A—Summary of CEO 2023 Compensation" on page 45. Compensation Philosophy & Commitment to Pay-for-Performance Strong Commitment to Compensation Best Practices: | | | | | | | | | | | | | | | | 61% of CEO target direct compensation opportunity is performance-based | | | Multiple performance metrics (relative & absolute and annual & long-term) | | At least 50% of regular long-term incentive program tied to performance goals over a three-year performance period | | | RTSR PSUs capped at target when the absolute total stockholder returns are negative | | Clawback Policy provides for the recoupment
of both cash and equity compensation | | | Annual cash incentive program funded substantially on achievement of a financial objective | | No option repricing without stockholder approval | | | No "golden parachute" excise tax gross-up arrangements | | Responsive to investor feedback | | | Prohibition against hedging & pledging | | Strong stock ownership requirements | | | Annual risk assessment of compensation programs | | Double triggerDouble-trigger change in control provisions | | | Independent compensation consultant | | Strict restrictive covenant agreements | | | No significant executive-only perquisites |
Compensation Philosophy & Commitment to Pay-for-Performance As part of our 2022 Investor Outreach, many investors noted their support for our executive compensation program as articulated in the 2022 proxy statement - with substantially all investors supporting a pay program that includes rigorous performance metrics.
Following its review of investor feedback (and incorporating investor feedback as discussed above under "2022 Investor Outreach Program"), the Committee reaffirmed its commitment to a pay-for-performance compensation program that aligns the interests of our executive officers with our stockholders through an emphasis on the use of rigorous pre-established goals and long-term equity awards.
Our compensation philosophy has the following key objectives: ▪The attraction, motivation and retention of high-performing executives; ▪A pay-for-performance focus that ties a significant portion of pay to business performance, both short- and long-term; ▪Alignment of compensation with stockholder interests in both short-term performance and long-term value creation; ▪Reinforcement of ethical behavior and practices; ▪Discouragement of excessive risk; and ▪Flexibility to respond to the necessities of a cyclical industry. With regard to pay levels, our philosophy is that: ▪Target direct compensation should be set at the outset of the compensation period by taking into account compensation paid to similarly-situated executives of comparable proficiency, with flexibility to vary individual executive compensation tobased on specific factors such as tenure, experience, proficiency in role, criticality to the organization and other business needs; and ▪All actual payments on incentive components should be linked to Company operating, financial, and stock performance during the performance period. Setting Target Direct Compensation In setting target direct compensation, we consider our compensation philosophy, each NEO’s individual performance assessment, the scope of the role’s responsibilities and the extent of the role’s impact on financial and strategic goals, expectations with respect to future performance and future leadership potential, internal pay equity, relative positioning to the peer group and other market comparables, and the period of time since last increase in total target compensation. The CEO annually reviews the performance of, and makes recommendations regarding, each of our NEOs (other than himself). The CEO’s performance is annually reviewed by the Committee with input from the Board. The conclusions reached and recommendations based upon these reviews, including with respect to base salary adjustment and annual and long-term incentive compensation targets and actual payout amounts, are presented to the Committee, which has the discretion to modify any recommended adjustments or awards to our executives. The Committee, comprised entirely of independent directors, reviews management's recommendations, taking into account any relevant guidance from their independent compensation consultant, and approves the form, timing, and amount of compensation for all of our executive officers, including those who are NEOs. Compensation Consultants The Committee continued their engagement of Meridian Compensation Partners, LLC (Meridian) as independent compensation consultants in 2023. Meridian provided the Committee with analyses and advice on executive and director compensation matters, including: ▪Competitive market pay analyses utilizing peer group and survey data ▪Short- and long-term incentive program designs ▪Recommendations with respect to the compensation peer group Meridian also reviews compensation materials presented by management to the Committee, participates in one or more pre-meeting calls with the Committee Chair and attends all regularly scheduled meetings of the Committee. In 2023, the Committee’s independent compensation consultant solely provided services related to executive or director compensation, and the Committee assessed and confirmed Meridian’s independence.
Peer Group In setting target compensation, the Committee annually reviews a detailed and comprehensive analysis of peer group information and general industry surveycompensation data designed to educate the Committee on current compensation ranges by executive position together with plan design and component weighting information. Specifically, the Committee utilizes our peer group data for all of our NEOs except for Ms. Wasser, for which they utilized general industry survey data for similar executive function roles. Peer group and survey data are used as a reference point in making compensation decisions, but the Committee does not target a particular competitive level or utilize peer data in a formulaic manner. For additional information on our Our peer group see "Our Peer Group" belowis made up of both direct peers, and given the limited size of that group, peers in this CD&A.industries that resemble the Company’s cyclicality, business model and financial performance or that are influenced by the housing market or share traits of our other business units. The Committee targets revenue of between $1 billion and $25 billion for each member of the peer group. As discussed in more detail below, individual pay levels varyFor 2023, the Committee approved the peer group listed opposite. For 2024 planning, the Committee did not make any changes to the peer group. Revenue and market cap data is based on individual experience, scopepublicly available information from the S&P Capital IQ database as of responsibilities, past performanceDecember 31, 2023. Based upon data as of and expectations with respect to future performancefor the year ended December 31, 2023, Anywhere’s revenues were at the 42nd percentile and future leadership potential.its market capitalization was the lowest of its peers.
Components | | | | | | | | | | Revenue (in millions)
($) | Market Cap (in millions)
($) | | Direct Real Estate Competitors | | Redfin Corporation | 977 | 1,189 | | Zillow Group, Inc. | 1,945 | 13,446 | | eXp World Holdings, Inc. | 4,281 | 2,387 | | Compass, Inc. | 4,885 | 1,816 | | Opendoor Technologies Inc. | 6,946 | 3,002 | | | | | Real Estate Related or Influenced by Housing Market | | Fortune Brands Innovations, Inc. | 4,626 | 9,601 | | Leggett & Platt, Incorporated | 4,725 | 3,489 | | First American Financial Corporation | 6,004 | 6,649 | | KB Home | 6,411 | 4,954 | | Hyatt Hotels Corporation | 6,667 | 13,450 | | Cushman & Wakefield plc | 9,494 | 2,454 | | Arthur J. Gallagher & Co. | 9,559 | 48,554 | | Toll Brothers, Inc. | 9,995 | 10,701 | | PulteGroup, Inc. | 16,062 | 22,254 | | Jones Lang LaSalle Incorporated | 20,761 | 8,985 |
Consideration of Executive Compensation Each named executive officer has a “target direct compensation” opportunity comprised in 2022 of both fixed (base salary)Stockholder Feedback and “at-risk” (short- and long- term incentives) compensation.2023 Say on Pay Vote
The Committee considersand the Board value the input of our stockholders and strive to foster a wide variety of factors when reviewing each elementconstructive dialogue with stockholders, including on matters of executive compensation, including those set forth below.compensation. | | | | | | | | | | | | | | | How the Committee sets elements of
Total Direct Compensation | Review
Process
| •Annual (but changes may be less frequent and are not guaranteed); or
•Upon a promotion or material change in responsibilities
| Factors |
•Individual performance assessment, including input from our CEO*
•Extent of role’s impact on financial and strategic goals
•Internal pay equity
•Relative positioning to the peer group and other market comparables
•Period since last increase
•Retention concerns
•Expected future contributions
|
* CEO does not participateAs disclosed in discussions or decisions regarding his own compensation
A significant portion of “at-risk” compensation is tiedour 2022 proxy statement, incorporating feedback from the Board's 2022 Investor Outreach Program as well as management's recommendations, the Committee included the following changes to pre-established objective performance metrics, including anits 2023 annual cash incentive opportunityplan:
▪Incorporated strategic and operational metrics to comprise 30% of the plan and, for the remaining 70%, maintained the existing financial performance share units granted as partmetric; ▪Flattened the performance scale to better align pay outcomes with management's performance during the ongoing unprecedented industry uncertainty, with the minimum performance threshold decreased from 85% to 75% of each NEO’s long-termthe target goal and maximum performance threshold increased from 120% to 125%; and ▪Reduced the Committee’s potential discretion (+/- 25%) in making adjustments to the individual performance achievement under the annual cash incentive opportunity.
During our 2023 Investor Outreach Program, the Committee and the Board gained valuable insight into our investors’ views about the Company, including our executive compensation programs. Investors overall expressed support for our approach to executive compensation and generally agreed that performance metrics currently in use are appropriate for the Company and that pay appears to align with Company performance and encouraged the Company to focus on continued refinement of the program. Specifically, investors recognized the need to retain key executives during the industry downturn and the uncertainties with respect to potential industry changes arising from ongoing antitrust litigation involving other industry players and potential regulatory reform. Investors also suggested that the Company continue to refine the alignment of the Company's incentive award programs with its strategic goals, specifically how to (1) incentivize and reward management based on meeting goals that are within its control in addition to being aligned with Company performance and (2) reduce the impact of the cyclicality of the housing industry and of the macro-economic factors that have contributed to volatile award program payouts. The Committee and the Independent Directors considered these views and feedback in approving year-end incentive awards for 2023 and structuring and approving the 2024 compensation programs for the NEOs, including modifying the design of the 2024 LTI award program: ▪In light of the current challenges forecasting long-term performance goals in an extremely volatile and macro-impacted industry, modified the CFCF PSUs so that free cash flow targets are set annually with actual payout being the average of the payouts of the three separate annual achievements; ▪In order to ensure continued alignment between payouts and long-term performance, changed relative TSR to be a modifier to the CFCF PSUs awards instead of a stand-alone metric; and ▪In order to more accurately measure our success against peers facing the same macroeconomic dynamics, changed our TSR peer group to our compensation peer group and, within that group, weighted our direct real estate peers twice to emphasize outperformance against these companies. For a full description of the forward-looking modifications to the 2024 LTI awards, see "2024 Annual and Long-Term Incentive Programs" on page 58 of this CD&A.
Summary of CEO 2023 Compensation In setting Mr. Schneider's 2023 target direct compensation, the Committee also takes into account thatconsidered Mr. Schneider's confident and decisive leadership in 2022, including his leadership in developing and implementing the Company's long-term strategy, reimagining his senior leadership team, improving the Company's debt profile, and taking actions to realize significant decreasescost savings during 2022. In light of Mr. Schneider's performance, and the other considerations set forth in realizable value for our NEOs could damage Company performance if"Setting Target Direct Compensation" above, the Committee maintained the cash component of Mr. Schneider’s 2023 compensation, increased the equity component and aligned the mix of PSU awards with the other NEOs. | | | | | | | | | | | | | | | 2023 Total Target Compensation: $11 million(1) | | | | Overview of 2023 Changes | | | Base Salary:$1 million
| Mr. Schneider’s base salary has remained unchanged since 2017 | | | Annual Cash Incentive: $2 million
| Mr. Schneider’s annual cash incentive opportunity remained at 200% of his base salary | |
Ryan M. Schneider | | Equity Award Value: $8 million
Award Mix: 40% time-based awards (RSUs) 60% performance-based awards (PSUs) | Mr. Schneider’s equity award value was increased by $0.5 million based upon his record of leadership, particularly with respect to strategy, talent, and realizing significant cost savings during 2022 | |
Chief Executive Officer Joined Anywhere: 2017 | | | | PSU Award Mix: 40% Relative TSR 60% Cumulative FCF | Mr. Schneider’s PSU mix was modified from 50/50 in 2022 in order to align with our other NEOs | | (1)The target direct package established for Mr. Schneider in February 2023 does not include the cash-based Exceptional Achievements Award and Performance Awards approved by the Board in November 2023. | |
This target direct compensation package aligns with our pay program does not offer sufficientfor performance compensation philosophy, with our CEO’s 2023 target direct compensation 91% at-risk (annual cash incentive and retention valueequity-based awards), 73% in equity-based compensation and 61% tied to performance-based metrics (annual cash incentive and PSUs). 2023 CEO Performance In late 2023, the Board, based on recommendations from the Committee, considered the CEO’s extraordinary performance under the incredibly challenging and difficult circumstances facing the Company, especially his leadership in: ▪improving the Company's debt profile in 2023, reducing the principal amount of debt by $308 million through the combination of debt exchange transactions, open market repurchases and reduction of our outstanding revolver balance. The debt exchange transactions reduced total principal amount of debt by approximately $160 million while incurring minimal incremental interest expense and retaining our flexibility and long-dated maturities. Our opportunistic open market debt repurchases of Senior Notes due 2029 and Senior Notes due 2030 allowed us to capture approximately $20 million of discount, further reducing the principal amount of our debt by approximately $70 million. We also reduced the amount outstanding under our revolving credit facility by $65 million. These achievements were in addition to our key executive talent.debt profile improvements between 2020 and 2022, when we reduced the principal amount of our debt by $600 million, extended our maturities, shifted our debt from mostly secured debt to unsecured debt and reduced our interest expense; ▪taking decisive action on our cost savings initiatives, overachieving our 2023 goal by more than 10% and realizing cost savings of approximately $220 million in 2023 and approximately $370 million in the past two years, and prudently managing our cash, even in a historically challenging residential real estate market; and
▪being the first to reach a nationwide settlement of the sell-side antitrust class actions against the Company and other industry participants. The $83.5 million settlement releases the Company, and all its subsidiaries, brands, affiliated agents, and franchisees. Subsequent to our settlement, the non-settling defendants received a $1.785 billion (before trebling) judgment based on claims representing a small fraction of the potential nationwide claims. In exceptional circumstances,addition, the Committee may offer specialnon-settling defendants and other industry participants now face a significant number of additional cases brought in other jurisdictions on similar grounds. The Company’s settlement, which was driven by our management team in close collaboration with our Board, avoided a devastating monetary judgment, provided a defense against the additional sell-side antitrust cases being brought around the country, removed significant future uncertainty for the Company, its employees, agents and franchisees, greatly reduced ongoing legal expenses and management distraction, and served the best interests of the Company, our affiliated agents and franchisees, and stockholders. The Board also considered the unprecedented nature of the challenges Mr. Schneider faced in 2023 and will continue to face in the future, including mortgage rates at 20 year highs, homesale transactions at lows not seen since 1995, the decline of our share of homesale transaction commissions, and an industry facing unprecedented turmoil and uncertainty from industry-wide antitrust litigation, potential regulatory reform and the possibility of significant changes to the structure and functioning of the industry. The Board also noted the decreased retentive and incentive retention or othervalue of outstanding equity incentive awards due to unattainable targets that were set in a residential real estate market where our Operating EBITDA was 3-4 times higher than in 2023. 2023 Payouts and Exceptional Achievements Cash Award ▪Mr. Schneider received 95% of his target annual cash incentive bonus awards if such action is determined byfor 2023, based on a 100% individual performance factor and EIP funding at 95%. ▪The realized value of the Committee to be necessary to achieve its incentive and retention goals. For additional information2021-2023 PSUs was 22% of target PSU award value (total payout of $996,492 based on the one-timeclosing market price of Anywhere common stock on the NYSE on December 29, 2023) based on achievement of 77% for the CFCF PSUs and 0% for the RTSR PSUs. See "Performance Share Unit Awards" in this CD&A for more details regarding the LTI plan and payouts. ▪In addition, the Market Share Performance AwardsAward yielded a 0% payout based on the Committee's determination that the target was not achieved for the CEO's final performance period (the one-year ended September 30, 2023). The Market Share Performance Award was a cash-based performance incentive award tied to growth in market share as measured by homesale transaction value that was originally granted by the Committee in the second half of 2020, see page 49.2020. ▪In addition,late 2023, the Company offers its NEOs severance protection and limited perquisites. 2022 Base Salary
In February 2022, the Committee approved base salaries for 2022 as set forth in the following table. The Committee determined not to increase the base salary for either our CEO or Ms. Wasser.
In approving an increase to base salary for Ms. Simonelli,Board, based on recommendations from the Committee, considered her outstanding performance in strengthening Anywhere’s financial profile, including improvements to the Company's capital structure,CEO’s extraordinary recent accomplishments that truly distinguished the Company's expectations with respect to her contributions in 2022Company from its competitors and her positioning relative to the peer group.
The Committee approved an 8.3% increase in base salary for Ms. Yannaccone in February 2022 based on her contributions to the success of the Company's franchise operations in 2021, the Company's expectations with respect to her contributions to that business in 2022, internal pay equity considerations and her positioning relative to the peer group.
During the fourth quarter of 2022, the Committee approved an additional 15.4% increase in base salary for Ms. Yannaccone in connection with the significant increase of her responsibilities as she assumedhis exemplary leadership of our owned brokerage business in addition to leadership of our franchise business.
The base salary of each NEO as of December 31, 2022 is reflected in the table below.
| | | | | | | | | | | | | | | | Name | Previous Year of
Last Increase | 2021 Annual
Base Salary ($) | 2022 Annual
Base Salary ($) | Base Salary 2022 v. Base Salary 2021
(% Increase) | | Ryan Schneider | n/a | 1,000,000 | 1,000,000 | 0% | | Charlotte Simonelli | 2021 | 900,000 | 950,000 | 6% | | Melissa McSherry | n/a | n/a | 750,000 | n/a | | Susan Yannaccone | 2020 | 600,000 | 750,000 | 25% | | Marilyn Wasser | 2020 | 600,000 | 600,000 | 0% |
2022 Annual Incentive (Cash)
Summary. All of our NEOs participate in an annual cash incentive program called the Executive Incentive Plan, or EIP. The 2022 EIP was entirely funded based on achievement against a Plan Operating EBITDA target.2024-2025 Performance Cash Award
The Committee selected Plan Operating EBITDA as the financial performance metric under the EIP due to its direct link to the success of Anywhere’s business strategy—as this metric is materially aligned and consistent with Operating EBITDA, our key metric for evaluating overall performance of our operating business. Certain adjustments to Operating EBITDA were permitted under the EIP, including adjustments for items that differedBoard, based on recommendations from the 2022 Budget such as pension expense, certain litigation costs,Committee, considered Mr. Schneider's executive management and
leadership expertise, the critical role he plays in setting and executing the Company’s business strategy, and the potential business disruption likely to be caused by a loss of his services and determined to further grant the CEO a performance-based cash incentive grant with two $5 million tranches ("Performance Award").earnings/losses from RealSure as well as adjustments to account for the impact of changes in the expected timingThe performance component of the closePerformance Award has two tranches, the first of our title insurance underwriter, foreign exchange movements and/or natural disasters (net of insurance reimbursements). The Committee also had discretion to adjust for other items, such as extraordinary corporate transactions.
In February 2023, the Committee determined that no funding had been achieved under the 2022 EIP which is based upon the Company's 2022 Operating EBITDA and determined not to make any adjustments permitted under the EIP.
2022 Target Annual Incentive. The Committee approved the following target opportunities (expressed as a percentageachievement of earned base salary)realized cost savings for the NEOs: (i)year ending December 31, 2024, at a level set by the Committee in November 2023. The second tranche will be based upon a metric determined by the Board in February 2025, taking into account, among other things, then market conditions, which will measure financial or operating performance during 2025 (each of calendar year 2024 and 2025, a “Performance Period”). No amount will be earned under a tranche if the performance metric for the CEO, a 200% target award
opportunity (given his overall greater accountability for the performance of the Company), and (ii) for the other NEOs, a 100% target award opportunity.
2022 Target Funding Pool. The potential funding pool for the EIP was determined by aggregating the target opportunity of each of the CEO and the other executive officer members of the Executive Committee.
The 2022 EIP would be funded by multiplying this aggregate target opportunity by the actual level of performance achieved against the Plan Operating EBITDA target - which could range from threshold funding at 25% (for performance achievement at the threshold performance level equal to 85% of the target goal) to maximum funding at 200% (for achievement at the maximum performance level equal to 120% of the target goal).
The aggregate value of awards earned under the EIP could not exceed this funding pool. Accordingly, any adjustments to an award based on consideration of Relative Individual Performance would have been restricted by this overall funding pool limit.
As the Committee determined that the Company had not achieved threshold funding level, no amounts were available for distribution under the 2022 EIP.
| | | | | | | | | | | | | | | 2022 EIP Funding CalculationAward | Performance Period | Performance Metric | Award Payout if Achieved | Subject to clawback if resignation without Good Cause prior to: | Aggregate Participant Target Award Amount
($)$5M 2024 cash performance award | xFY 2024 | Plan Operating EBITDA Results
(%)
Cost savings goal pre-established in late 2023 | =Early 2025 | Funded
EIP
Award
Pool
($)
| | | | | March 1, 2026 | Individual 2022 EIP Awards Calculation$5M 2025 cash performance award | | FY 2025 | Funded EIP Award
($)To be established by early 2025(1)
| xEarly 2026 | Relative Individual Performance (%) | = | Individual EIP Award ($)March 1, 2027 |
Rigor in Setting the Plan Operating EBITDA Target.(1)The target Plan Operating EBITDA goal was set byBoard deferred setting a specific metric for the Committee at2025 performance period to retain flexibility to ensure alignment with the Company's 2025 strategic priorities.
The CEO must remain employed with the Company throughout the applicable Performance Period to be eligible to receive a levelpayout of the applicable Performance Award tranche. If the CEO’s employment is terminated without cause or the CEO resigns his employment for Good Reason (as defined in his employment agreement) during the applicable Performance Period, he will be eligible to receive a pro-rata amount of the Performance Award based on actual performance for the applicable Performance Period. If the CEO’s employment terminates due to his death or disability, he will be entitled to receive a portion of such Performance Award equal to the budget approved by the Board for 2022, or the 2022 Budget. The budgeting process undertaken by management and overseen by the Board is rigorous and set at a level that requires a reasonable degree of stretch performance and operational excellence to achieve. Funding$5 million value of the 2022 EIP was based solely on Plan Operating EBITDAPerformance Award, pro-rated for the consolidated Company.
number of full months of the applicable Performance Period. If terminated in connection with a change in control, he would be entitled to full payout of the Performance Award.While the 2022 Plan Operating EBITDA target was lower than actual Operating EBITDA reported by us for 2021, the Committee believed the 2022 EIP target was rigorous in large part dueAdditionally, our Clawback Policy will apply to the factors listed below.
When setting the 2022 EIP target, the Committee also considered that the 2022 Budget forecasted:
▪mid-single digit homesale transaction volume growth;Performance Award (see "Clawback Policy" on page 61 of this CD&A for more information).▪benefits from new cost saving initiatives; and
▪anticipated moderate increased earnings fromSee "Components of Executive Compensation" on page 51 of this CD&A for additional details about our mortgage origination joint venture over 2021.CEO’s 2023 compensation.However, the foregoing benefits were expected to be more than offset and be negatively impacted by:
▪continued pressure on the share of gross commission income paid by our Company-owned brokerages to independent sales agents;
▪forecasted expenses for growth investments in the business, including strategic initiatives; and
▪decreased earnings related to the then pending sale of the Company's title insurance underwriter.
Balancing these factors, the Committee believed that the target set for the EIP was in fact rigorous, notwithstanding it being lower than the actual 2021 EIP achievement.
Historical EIP payouts based on performance against the Plan Operating EBITDA target set by the Committee, as shown in the table below, further demonstrate the level of rigor required to achieve payout under the EIP.
| | | | | | | Historical payouts under the EIP | | 2022 | 0% | | 2021 | 200%* | | 2020 | 200%* | | 2019 | 70%* | | 2018 | 44%* | | 2017 | 82% | | 2016 | 70% | | 2015 | 100% | | 2014 | 63% | | Average of above | 92% |
* Before application of Relative Individual Performance
TableSummary of ContentsOther Named Executive Officer Compensation | | | | | | | | | | | | | | | | | | | | | Charlotte C. Simonelli EVP, Chief Financial Officer and Treasurer
| Melissa K. McSherry EVP, Chief Operating Officer
| Marilyn J. Wasser EVP, General Counsel and Corporate Secretary
| Susan Yannaccone President and CEO, Anywhere Brands and Anywhere Advisors | | Joined Anywhere: 2019 | Joined Anywhere: 2022 | Joined Anywhere: 2007 | Joined Anywhere: 2015 | | | | | | | Base Salary: | $950,000 | $750,000 | $600,000 | $750,000 | | Annual Incentive Target: | 100% of base salary | 100% of base salary | 100% of base salary | 100% of base salary | Equity Award Target Value:(1) | $1,950,000 | $1,000,000 | $1,430,000 | $1,500,000 | | Equity Award Mix: | 50% time-based (RSUs) 50% performance-based (PSUs) | 50% time-based (RSUs) 50% performance-based (PSUs) | 50% time-based (RSUs) 50% performance-based (PSUs) | 50% time-based (RSUs) 50% performance-based (PSUs) | | PSU Award Mix: | 60% Cumulative FCF 40% Relative TSR | 60% Cumulative FCF 40% Relative TSR | 60% Cumulative FCF 40% Relative TSR | 60% Cumulative FCF 40% Relative TSR |
Target(1)Does not include special retention equity awards to Ms. McSherry and Actual 2022 Plan Operating EBITDA Funding under the EIPMs. Yannaccone, discussed below.
The table below sets forth the:2023 target direct compensation program aligns with our pay for performance compensation philosophy, with 70%-77% of target 2023 compensation at-risk and 50% tied to performance metrics. ▪Pre-established Plan Operating EBITDA performance levels at threshold, targetIn 2023, the Committee also made certain special retention equity awards. Specifically, the Committee recognized the critical importance of the respective leadership roles of Ms. Yannaccone and maximum payout;Ms. McSherry in the execution of the Company’s transformation strategy, the significant decline in realizable value of their existing awards, the resulting “enhanced retention” risk, and
▪Actual Plan Operating EBITDA performance achieved the competitive landscape for executive talent and the potential disruption resulting from unplanned attrition. In light of these considerations, the Committee granted special long-term incentive awards to Ms. Yannaccone and Ms. McSherry in fiscal 2022.
| | | | | | | | | 2022 Plan Operating EBITDA* Funding under the EIP | | Performance Level | Payout as % of Target | Plan Operating EBITDA
(in millions) | | Threshold | 25% | $689 | | Target | 100% | $810 | | Maximum | 200% | $972 | | Actual | 0% | $449 |
* See Annex A for a definition and a reconciliationthe form of Operating EBITDA toRSUs that will cliff vest on the most directly comparable GAAP measure.
Relative Individual Performance Calculation.
The Committee, in collaborationthird anniversary of the grant date, with the full Board, establishes individual performance goals for our CEO atvalue of such RSU awards in the beginningamounts of the fiscal year based on our annual financial$1.0 million and strategic plan.$500,000, respectively.
Likewise, each2023 NEO Performance
Each executive officer member of the Executive Committee works with our CEO at the outset of the year to establish quantitative and qualitative goals designed to drive our corporate strategy and results. As the Plan Operating EBITDA threshold was not achieved under the 2022 EIP, the plan was not funded, and no amounts were payable under the 2022 EIP.
Nevertheless, followingFollowing the conclusion of the year, our CEO provided an in-depth review of his performance to the Board. After consultation with the Board,presented the Committee assessedwith his assessment of the CEO's performance of each executive officer member of the Executive Committee taking into accountconsideration each executive's pre-established goals and the following factors:
▪Achievement of key strategic and operational objectives; ▪Execution of key initiatives; ▪Execution of key talent management initiatives, including those related to diversity, equity and inclusion; and ▪Other factors identified as appropriate. The CEO also presented the Committee with his assessmentreviewed and discussed each of the other NEO’s performance, of each executive officer member of the Executive Committee taking into consideration each executive's pre-established goals andaccount the factors listed above. In years whereCEO’s recommendations for purposes of both the EIP is funded, these presentations and assessments form the basis for the Committee's determinations of the Relative Individual Performance of each NEO, although whenannual cash incentive payouts as well as setting 2024 compensation. When determining each NEO's Relative Individual Performance,performance, the Committee doesdid not assign a specific weighting to any of the individual goals or factors, but rather considers progress and results against the objectives in the aggregate.
2022Charlotte C. Simonelli, Executive Vice President , Chief Financial Officer and Treasurer
▪Executed on our goal to reduce corporate indebtedness and improve our debt profile ▪Negotiated opportunistic debt exchange transactions, which were completed in August 2023, and which represented significantly improved economic terms from those originally proposed by the counterparty ▪Leadership in realized cost savings ▪Transformed the structure and workflows of the finance team ▪Implemented the Company's first business spend management platform ▪Executive sponsor of our Women Employee Resource Group dedicated to supporting women at Anywhere ▪Developed and implemented our finance leadership program, focused on discovering developing talent among new graduates Melissa K. McSherry, Executive Vice President and Chief Operating Officer ▪Leadership in cost savings and cost avoidance through consolidation, automation and retirement of legacy systems ▪Increased adoption, usage and customer satisfaction with several key technology products and increased operational efficiencies ▪Continued to improve cybersecurity posture and mitigate related risks ▪Recruited new Chief Information Security Officer with 20 years of cyber experience ▪Executive sponsor of our Asian & Pacific Islander Alliance (APIA) Employee Resource Group dedicated to supporting women at Anywhere Susan Yannaccone, President and CEO, Anywhere Brands and Anywhere Advisors ▪Generated over $383 million of Operating EBITDA between Anywhere Brands, our franchise business, and Anywhere Advisors, our owned brokerage business ▪Leadership in realized cost savings, contributing over $150 million of the total realized cost savings for Anywhere in 2023 ▪Transformed her leadership team, streamlining management structure, hiring new talent and elevating internal talent ▪Industry thought leadership in overall industry changes and unwavering support of women and diversity, including through her support of our inclusive franchise ownership program ▪Executive sponsor of our Service Employee Resource Group dedicated to supporting our military veterans at Anywhere Marilyn J. Wasser,Executive Vice President, General Counsel and Corporate Secretary ▪Trailblazing leadership in the nationwide settlement of the sell-side antitrust industry litigation ▪Continued focus on risk and liability management, including ◦providing strategic counsel on: –contingent liability planning, including managing the Ad Hoc Special Committee and building a team to support the Committee's work –addressing potential risks related to industry structure changes ◦leading risk management committee and enterprise risk management processes ◦incorporating learnings from litigation on a number of evolving legal issues and integrating into Company processes, mitigating risks associated with potential future claims ◦managing risks associated with independent contractor workforce
▪Supported opportunistic debt exchange transactions, which were completed in August 2023 ▪Updated and increased data privacy policies and processes and data usage management ▪Ongoing support for, and oversight of, Anywhere's robust ethics program. Anywhere has been recognized as one of the World’s Most Ethical Companies® by Ethisphere Institute for the past 13 years ▪Expanded focus on government and industry affairs program to expand the Company's voice in ongoing discussions concerning MLS policies and practices and advocacy for certain industry rule changes ▪Executive co-sponsor of our REALDisabilities Employee Resource Group 2023 Payouts Earned under the EIPand Special Bonus 2023 Executive Incentive Plan ("EIP") Payout The following table sets forth each NEO'sthe target award and payout achieved:achieved under our annual cash incentive plan, the EIP. Each NEO received 95% of their target annual cash incentive bonus for 2023, based on a 100% individual performance factor and EIP funding at 95%. See "2023 Annual Incentive (Cash)" in this CD&A for additional details. | | Name | Name | Target Award ($) | Combined 2022 Financial and Individual
Performance (%) | 2022 Payout ($) | Name | Target Award ($) | Combined 2023
Financial, Strategic
and Individual
Performance
(%) | 2023 Payout ($) | | Ryan Schneider | Ryan Schneider | 2,000,000 | | 0 | — | Ryan Schneider | 2,000,000 | | 95 | 95 | 1,900,000 | | Charlotte Simonelli | Charlotte Simonelli | 940,385 | | 0 | — | Charlotte Simonelli | 950,000 | | 95 | 95 | 902,500 | | Melissa McSherry | Melissa McSherry | 631,731 | | 0 | — | Melissa McSherry | 750,000 | | 95 | 95 | 712,500 | | Susan Yannaccone | Susan Yannaccone | 646,154 | | 0 | — | Susan Yannaccone | 750,000 | | 95 | 95 | 712,500 | | Marilyn Wasser | Marilyn Wasser | 600,000 | | 0 | — | Marilyn Wasser | 600,000 | | 95 | 95 | 570,000 |
2023 Wasser Special Exceptional Achievements Award In addition, the Committee granted a special $1 million cash exceptional achievements award to Ms. Wasser in recognition of her trailblazing leadership in the nationwide settlement of the sell-side antitrust industry litigation in 2023, as well as her continued focus on risk and liability management, including providing strategic counsel on contingent liability planning, managing the Board of Directors Ad Hoc Special Committee and building a cross-functional team to support the committee, and addressing potential risks related to industry structure change. 2021-2023 PSU Payouts The realized value for the 2021-2023 PSUs awarded to the NEOs (other than Mr. Schneider and Ms. McSherry who joined the Company in February 2022 and did not participate in the 2021-2023 PSU award cycle) was 27% of target grant value (based on the closing market price of Anywhere common stock on the NYSE on December 29, 2023) based on achievement of 77% for the CFCF PSUs and 0% for the RTSR PSUs. See —Performance Share Unit Awards in this CD&A for more details regarding the LTI plan, and payouts.
In February 2023, the Committee approved the 2023 compensation program, designed to be consistent with the Company’s pay-for-performance philosophy, which includes: ▪Base salary; ▪Annual Incentive (cash) under the Executive Incentive Plan (EIP); ▪Long-Term Incentive (equity) in the form of: ◦Performance Share Units (PSUs), which vest at the end of the 3-year performance period based on achievement of performance factors, including: –Relative Total Stockholder Return (RTSR); and –Cumulative Free Cash Flow (CFCF); and ◦Restricted Stock Units (RSUs), which vest ratably over three years. A significant portion of each NEOs target direct compensation is “at-risk” and is tied to pre-established performance metrics, including an annual cash incentive opportunity and performance share units granted as part of each NEO’s long-term incentive opportunity. In addition to the target direct compensation program, in exceptional circumstances, the Committee may offer special incentive, retention or other bonus awards if such action is determined by the Committee to be necessary to achieve its compensation goals. 2023 Base Salary The Committee believes base salaries are a necessary element of compensation in order to attract and retain top-tier talent by providing market-competitive fixed pay reflective of the executive’s position, experience, scope of responsibility and contribution to our performance. The Committee reviews the base salaries of our executive officers at least annually and may adjust them from time to time, if needed, to reflect changes in market conditions, promotions or other factors. | | | | | | | | | | | | | | None of our NEOs received a salary increase in 2023 | | | |
2023 Annual Incentive (Cash) All of our NEOs participate in an annual cash incentive program called the Executive Incentive Plan, or "EIP", which is designed to motivate our executive officers to focus on company priorities and to reward them for individual results and achievements. The 2023 EIP is funded based on Company performance, which is determined as follows:  | | | | | | | | | | Financial Performance Metric (70%) | | | Plan Operating EBITDA | | | | | Strategic Performance Metrics (30%) | | | Operational Excellence | | | Consumer Experience | | | Talent | | | |
The payout range for the financial performance metric ranges from 25% to 200% for achievement of 75% to 125% of the Plan Operating EBITDA target. The payout range for the strategic metrics ranges from 0% to 200%. The determination of the level of achievement under the EIP is recommended by the CEO and approved by the Committee.
2023 Plan Design Modifications The Committee adopted several changes to the 2023 EIP to reduce volatility in the annual incentive plan payouts, both in response to investor feedback and to improve our employee experience. First, the Committee added strategic goals to drive better alignment across the Company with our enterprise strategic priorities, reducing Plan Operating EBITDA from 100% to 70% of the weighting of the overall plan funding (with the strategic objectives described above representing the remaining 30%). Second, the Committee flattened the performance scale of the Plan Operating EBITDA component, specifically: ▪Increased the level of performance required to fund at the maximum 200% payout from 120% target achievement to 125%; and ▪Decreased the threshold required to fund at the minimum 25% payout from 85% target achievement to 75% . Third, in response to feedback from proxy advisors, the Committee reduced Committee discretion with respect to individual payouts. Individual payouts must be within +/-25% of the aggregate funding percentage reached under the 2023 EIP, and consistent with the 2022 EIP, total payouts under the 2023 EIP may not exceed the aggregate funded amount under the plan. Financial Performance Metric In 2023, the Committee retained Operating EBITDA as the financial performance metric under the EIP, which accounted for 70% of the overall target, due to its direct link to the success of Anywhere’s business strategy—as this metric is materially aligned and consistent with Operating EBITDA, our key metric for evaluating overall performance of our operating business. For 2023, the Committee, using a rigorous process, set the following Plan Operating EBITDA performance levels at threshold, target and maximum payout. Consistent with prior years, the target Plan Operating EBITDA goal was set by the Committee at a level equal to the budget approved by the Board for 2023 (the "2023 Budget"). | | | | | | | | | 2023 Plan Operating EBITDA* Target | | Performance Level | Payout as % of Target | Plan Operating EBITDA
(in millions) | | Threshold | 25% | $190 | | Target | 100% | $253 | | Maximum | 200% | $317 | | Actual | 97% | $250 |
* See Annex A for a definition and a reconciliation of Operating EBITDA to the most directly comparable GAAP measure. Rigorous Process in Setting a Challenging Operating EBITDA Target. While the 2023 Plan Operating EBITDA target was lower than actual Operating EBITDA reported by us for 2022, the budgeting process undertaken by management and overseen by the Board is rigorous and set at a level that requires a reasonable degree of stretch performance and operational excellence to achieve. As part of the rigorous process of setting the 2023 Budget and 2023 Plan Operating EBITDA target, the Board considered the following factors: ▪benefits from new cost saving initiatives; and ▪anticipated moderate increased earnings from our mortgage origination joint venture compared to 2022. However, the foregoing benefits were expected to be more than offset and be negatively impacted by: ▪anticipated decreases of 19% in homesale transaction volume, driven by lower homesale unit transactions; ▪continued pressure on the share of gross commission income paid by our Company-owned brokerages to independent sales agents; and ▪forecasted increased expenses for employee-related incentive compensation (taking into account no EIP or broader-based employee annual cash bonus plan payout in 2022). Based on the Board’s rigorous process, the Committee believed that the 2023 Plan Operating EBITDA target would be challenging to achieve, notwithstanding that it was lower than actual Operating EBITDA reported by us for 2022.
| | | | | | | | | | | | | | Historical EIP payouts also demonstrate the high level of rigor required to achieve payout under the EIP, as seven of the last ten EIP cycles have resulted in an achievement level below target, including in 2022 where the EIP payout was zero, and only two cycles have resulted in an achievement above target. | | | |
In calculating the level of achievement of Plan Operating EBITDA, the EIP allows for certain adjustments to Operating EBITDA, including the impact of foreign exchange movements, pension expenses that differ from the budget, the impact of natural disasters, net of insurance reimbursement, revenue/EBITDA lost or expenses incurred relating to litigation, arbitration, regulatory investigations, tax audits and regulatory compliance that either exceed $1.0 million or, in the case of complex litigation matters listed in our Form 10-K for 2022, that differ from the budget, EBITDA lost or expenses incurred to pay liability management expenses within Board oversight that differ from forecasts and other items, such as unusual, non-recurring or extraordinary corporate transactions. Strategic Performance Metric In 2023, the Committee added a strategic performance metric under the EIP, which accounted for 30% of the overall target, which was comprised of three strategic objectives focused on operational excellence (including cost savings), talent, and consumer experience. For 2023, the Committee reviewed an extensive scorecard under each EIP objective to inform its overall assessment of achievement. Included in the scorecard were descriptions of each metric, performance against pre-set goals, and highlights of outcomes achieved in 2023, including the quantitative and qualitative data used to measure achievement. Based on the assessment of achievements made in each of the respective areas, the Committee awarded an aggregate performance score of 100%. Highlights from the Committee's assessment of our strategic objectives and results are shown in the following table. | | | | | | | Strategic Goals and 2023 Focus | 2023 Results | | Operational Excellence | •$222M of realized cost savings, consisting of $58 million from actions taken in 2022 and $164 million from actions taken in 2023 (~10% above our target). •Achieved our 2023 goal to reduce Coldwell Banker Realty footprint, contributing $10M of annualized savings. •Successfully launched client experience pilots, which are now fully integrated into operating model, to gain efficiencies in the brokerage and title operations. Launched in 47 markets with overall agent satisfaction of 97%. | | Combat margin pressure with cost savings while making strategic investments in our future. | | | Relentless Focus on Talent | •Transformed and streamlined leadership structure across all businesses, expanding roles for high-potential talent and increasing speed to market. Eliminated 6% of roles while elevating 20% of leaders into modified or expanded roles. •In a challenging real estate market, increased our employee engagement score, exceeding target. Identified as one of Time's World's Best Companies, Forbes Best Employers for Diversity and Ethisphere's World's Most Ethical Companies. •Reduced voluntary resignation rate by 6.1 percentage points. | Win together as a team. Culture and talent fuel success. | | | Consumer Experience | •Increased product adoption within targeted campaigns, yielding 22% increase in targeted audiences with plans to scale in future. •Maintained overall product capture rate, though progress has been made in a number of pilot programs currently being scaled across the country. •Met goal to complete product footprint rationalization, resulting in the retirement of seven products. | | Make the real estate transaction simpler for consumers everywhere. | |
2023 EIP Company Performance and Payouts We calculate payouts under the EIP as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Eligible Earnings | x | Individual Target Bonus % | x | Company Performance | x | Relative Individual Performance %* | = | Payout |
The aggregate value of awards earned under the EIP cannot exceed the “Eligible Funding Pool”, which is calculated by aggregating the theoretical payout of each participant in the EIP using the actual company performance percentage and assuming each participant obtained an individual performance percentage of 100%. Accordingly, any adjustments to an award based on consideration of Relative Individual Performance are restricted by this overall funding pool limit. In February 2024, the Committee determined the Company had achieved 98%under the EIP as follows, however, the Committee determined to payout the EIP at 95% to align NEO payouts with payouts under the broad-based employee annual cash bonus plan: | | | | | | | | | | | | | Performance Metric | % of Plan | 2023 Performance | % of Target | | Plan Operating EBITDA | 70% | $250 million(1) (below target of $253 million) | 97% | | Strategic Objectives | 30% | At target | 100% | | | Total | 98%(1) |
(1)The Committee made the following adjustments to Plan Operating EBITDA for 2023: impact of foreign exchange movement, pension expense and litigation reserves that differ from those included in the EIP target, and the November 2023 $5 million CEO Exceptional Achievements Award. See "Annex A" for a detailed reconciliation. Long-Term Incentive (Equity) We grant equity awards to our NEOs to reinforce management’s focus on long-term stockholder value and commitment to the Company. The Committee regularly evaluates the structure of these equity awards to ensure the right balance of time- and performance-based equity that supports the objectives of our compensation philosophy, aligns with our business priorities, and considers the perspectives of our stockholders.
Long-term incentives, or LTI, in 2022 consisted of the following types of equity awards:
| | | | | | | | | | | | | 2022 Long-Term Incentive Awards by Grant Type and Weighting | | Performance-Based Awards (Performance Share Units) | Time-Based Awards | | RTSR† | CFCF | RSUs | | CEO | 30% | 30% | 40% | | Other NEOs | 20% | 30% | 50% |
| | | | | | | | | | | | | | | | 2023 LTIP Awards by Grant Type and Weighting | | Type of LTIP Award | CEO | Other NEOs | | Time Based Awards (RSUs) | 40% | 50% | | Performance-Based Awards (PSUs) | 60% | 50% | | % of PSUs | % of Total LTIP | % of PSUs | % of Total LTIP | Relative TSR† | 40% | 24% | 40% | 20% | | Cumulative FCF | 60% | 36% | 60% | 30% |
† The weighting above is based on the valuation approach used by the Committee to determine the appropriate allocation among the components of target direct compensation, rather than the grant date fair value of the awards. Summary
In 2022,determining each NEO's award amount, the Committee again allocated 60% of our CEO's long-term incentive compensation value to performance share units, or PSUs. The PSUs are tied to Company achievement against pre-established metrics over the three-year period ending December 31, 2024. Half of each other NEO's 2022 long-term incentive award was awarded in the form of PSUs. The performance metrics used in the PSU program are Relative Total Stockholder Return, or RTSR, and Cumulative Free Cash Flow, or CFCF, each of which is explained under the heading "Performance Share Units" in this CD&A.
The remaining 2022 LTI award was comprised of time-based awards granted in the form of restricted stock units, or RSUs.
In setting the mix of equity, the Committee weighed its preference for performance-based awards against the retention benefits provided by time-based equity awards. The Committee noted the meaningful three-year ratable vesting period for RSU awards.
The Committee consideredconsiders the following factors when determining each NEO’s 2022 LTI grant:factors:
▪the need to provide sufficient long-term incentives; ▪the need to satisfy retention objectives;
▪a competitive pay analysis prepared by the Committee’s independent compensation consultant; ▪the executive’s expertise, experience and criticality to Anywhere; and ▪individual performance reviews conducted by the Committee with input from our CEO in the case of his direct reports and, in the case of our CEO, with input from the Board. Restricted Stock Units The Committee kept the 2022 LTI awards flat, year-over-year, for Mr. Schneider, determining that the LTI opportunities appropriately recognized his role in the oversight of our entire operations. The Committee believes that Mr. Schneider’s 2022RSUs further our compensation philosophy by allowing us to attract leaders of the highest caliber, encouraging executive retention andaligning the interests of our NEOs with the interests of our stockholders. Consistent with the prior year, in 2023 RSUs constituted 40% of the CEO's LTI award is appropriate given that:
▪the majorityand 50% of hiseach other NEO's LTI award is tied to the achievement of objective performance goals over a three-year performance cycle;award.
▪his broad scope of responsibilities and the critical role he plays in setting and executing the Company’s business strategy;
▪his equity awards are subject to both the Company's Clawback Policy as well as his continued compliance with the restrictive covenants in his employment agreement; and
▪his awards vest over a period of three years and will be forfeited if he is terminated for cause or voluntarily leaves his position.
The Committee weighed PSU awards more heavily for Mr. Schneider than other NEOs, with 60% of his 2022 LTI target value tied to the RTSR or CFCF metric (as opposed to 50% weight for our other NEOs). Equal target compensation value was assigned to each of these PSU metrics for the 2022-2024 performance period for our CEO in order to provide further incentive to him to drive the creation of stockholder value through both stock performance and the Company’s generation of Free Cash Flow.
The Committee increased the target value of the LTI awards granted to Ms. Simonelli by approximately 11% to reflect her outstanding performance in strengthening Anywhere’s financial profile, including improvements to the Company's capital structure, the Company's expectations with respect to her contributions in 2022 and her positioning relative to the peer group.
The following table shows the 2022 LTI awards granted to our NEOs as well as the aggregate LTI target direct compensation value assigned by the Committee and aggregate grant date fair value of those awards.
| | | | | | | | | | | | | | | | | | | 2022 Long-Term Incentive Grants | | Shares Underlying Performance-Based PSU Awards (#)(1) | Shares Underlying Time-Based Awards (#) | LTI Target Direct Compensation Value ($)(2)
| Grant Date Fair Market Value ($)(2)
| | Name | RTSR(2) | CFCF | RSUs | | Ryan Schneider | 125,000 | | 125,000 | | 166,666 | | $ | 7,500,000 | | $ | 6,796,238 | | | Charlotte Simonelli | 16,666 | | 25,000 | | 41,666 | | 1,500,000 | | 1,406,146 | | Melissa McSherry (3) | 11,111 | | 16,666 | | 27,777 | | 1,000,000 | | 937,417 | | | Susan Yannaccone | 10,000 | | 15,000 | | 25,000 | | 900,000 | | 843,700 | | | Marilyn Wasser | 12,222 | | 18,333 | | 30,555 | | 1,100,000 | | 1,031,170 | |
_______________
(1)Shares underlying performance-based PSU awards and grant date fair value are presented at target.
(2)The number of PSUsRSUs granted under the RTSR metricto all NEOs was determined by dividing the value of the award approved by the Committee by our closing stock price on the datethird full trading day following the filing of grant ($18.00), while the grant date fair value2022 Form 10-K, which is the same price that was used for 2023 awards to all other employees (See "Timing and Valuation of $12.37 per RTSR PSU was determined,Equity Grants" in accordance with FASB ASC Topic 718, by a Monte Carlo simulation performed by an independent third-party.
(3)Ms. McSherry also received a "make-whole" inducement award on March 1, 2022 in connection with her commencement of employment with us, which had a grant date fair value of $2,099,988 and was granted in the form of restricted stock units thatthis CD&A for more information). Our RSUs vest in equal tranchesratably over three years, with one-third vesting on each anniversary of the grant date. As noted under the heading
Make Whole Award to Ms. McSherry on page 48, the award is subject to our Clawback Policy.Performance Share Units
Since 2014, Performance Share Unit or(PSU) Awards
Since 2014, PSU awards have comprised at least half of the regular LTI award. In 2022,award for all NEOs. Consistent with the Committee allocated the following amounts of LTI target value to PSU awards:
▪prior year, in 2023 PSUs constituted 60% of the CEO's LTI award;award and
▪50% of each other NEO's LTI award.
The numberdesign of units that may be earned under each PSU award isour PSUs incorporates feedback received during the Board’s Investor Outreach Programs, with all outstanding PSUs having a multiple of the target award, with such multiple based upon the achievement of the applicable performance metric over the three-year performance period. The PSU awards granted in 2022 measure performance from January 1, 2022 to December 31, 2024. Likewise, the PSU awards that were earned for the three-year period, ending December 31, 2022 were granted in 2020. Payouts are determined by linear interpolation when achievement falls between performance levels.
All of our currently outstanding PSU awards areand being based on two metrics—either relative total stockholder return, or RTSR, and Cumulative Free Cash Flow, or CFCF.
PSUs are denominated in stock units, so the award value tracks Anywhere stock price over the three-year performance period,. Earned and earned PSUs are distributed in actual shares of our common stock during the first quarter of the year after the end of the three-year cycle. Amounts earned are based upon the Committee's determination of results and are forfeitable if the Company does not meet pre-established threshold targets for CFCF and RTSR.
| | | | | | | | | | | | | | PSU award design incorporates feedback received during the Board's Investor Outreach Programs | | | |
2023-2025 Relative Total Stockholder Return (RTSR) PSU Awards Summary. The Relative Total Stockholder Return (RTSR) metric was initially adopted by the Committee as a PSU metric in 2015 at the recommendation of investors. Certain investors have continued to express support for this metric during the Board's Investor Outreach Program.
The RTSR metric focuses on Anywhere stockholder returns relative to an index selected by the Committee—with outperformance against the index
resulting in payouts above target and underperformance resulting in no payout, or payouts below target.
| | | | | | RTSR PSU—Design Features | Metric
Description
| Total stockholder return relative to a hypothetical investment in the
S&P MidCap 400 index
| Target Direct Compensation Weighting | In 2022, PSU awards tied to RTSR were:
- 50% of the CEO's PSU award
- 40% of each other NEO's PSU awards
| Opportunity
(% of Target Shares Vested)
| Threshold = 40%
Target = 100%
Maximum = 175%
|
The Committee believescontinues to choose RTSR as a metric for PSUs because it is an objective and meaningful metric to evaluate our performance against other similarly-sized companies and aligns the RTSR metric aligns long-term executive compensationinterests of our NEOs with the interests of our stockholders and is working as designed with:in creating long-term value. ▪NO payouts earned under any cycle completed to date, including the cycle ended December 31, 2022
| | | | | | | | | Historical achievement RTSR PSU Cycles | | Cycle | Shares Earned | Realized Value | | 2020 to 2022 | 0% | 0% | | 2019 to 2021 | 0% | 0% | | 2018 to 2020 | 0% | 0% | | 2017 to 2019 | 0% | 0% | | 2016 to 2018 | 0% | 0% | | 2015 to 2017 | 0% | 0% |
▪NO payouts forecasted under outstanding cycles
| | | | | | Forecasted achievement*
RTSR PSU Cycles Outstanding at 12.31.22 | 2021 to 2023 | No payout | 2022 to 2024 | No payout |
* As of 12.31.22; actual results will be determined at the conclusion of the applicable three-year cycle.
Mechanics of RTSR PSU Awards Granted in 2022. Consistent with prior RTSR PSU awards, payouts under the RTSR PSU award granted for the three-year performance period of January 1, 2022 to December 31, 2024 will be determined by measuring the difference at the end of the performance period between the:
▪total stockholder return realized through an investment in Anywhere stock, and
▪total stockholder return realized through an investment in the applicable index.
Both calculations include dividends paid during the performance period, if any.
| | | | | | | | | | | | | | | 2022-2024 RTSR PSU Payout Formula | Anywhere TSR
(%) | minus | S&P
MidCap 400 Index TSR
(%) | = | RTSR
(%)
|
The Committee protects against excessive awards by limiting payouts as follows:
▪if Anywhere total stockholder returns arenegative, the payout may not exceed 100%, regardless of our relative performance against the comparator index, and
▪the value of the shares of Anywhere common stock to be issued in payment of the RTSR PSU award may not exceed 300% of the award's grant date fair value.
The Committee may exercise negative, but not positive, discretion in determining the performance level achieved under this metric.
Benchmark Index. Target payouts for the 2021 RTSR PSUs will be earned for performance equal to the S&P MidCap 400 index. For every +/- 1% change in RTSR, the payout as a percentage of the target award will increase/decrease by 2%. Maximum payouts will be made at 175% of target if Anywhere's TSR exceeds the S&P MidCap 400 index TSR by 37.5 percentage points, assuming Anywhere's TSR is positive. Payouts will be made at threshold (40% of target) if Anywhere's TSR trails the S&P MidCap 400 index by 30 percentage points.
In deciding to utilize an RTSR metric, the Committee recognized that many of our competitors are privately-held. In the absence of an index of publicly-tradedpublicly traded companies engaged in a similar business to Anywhere, the Committee willhas chosen the S&P MidCap 400 index as the comparative TSR group, and regularly evaluateevaluates the
trading correlation between the S&P MidCap 400 index and our common stock and may determine to use another index or a custom peer group with respect to any future grants if any, tied to RTSR. The number of RTSR PSUs that vest, if any, depends entirely on the Relative TSR for the applicable three-year performance period. To earn the target number of RTSR PSUs, Anywhere must achieve TSR performance equal to the S&P MidCap 400 index. We measure Relative TSR based on the change in the stock price of Anywhere and the S&P MidCap 400 index, taking into account any dividends paid during the performance period, and dividing that difference by the beginning stock price to determine TSR. | | | | | | | | | | | | | | Historical achievement of RTSR PSU cycles: No payouts earned under any cycle completed to date, including the cycle ended December 31, 2023. | | | |
The historical achievement of prior RTSR cycles shows that the realized value of the compensation received by our NEOs has been responsive to the actual relative stock price performance of the Company, however, investors have encouraged the Committee to continue to refine the program to ensure awards have appropriate retentive value. As currently outstanding cycles are forecasted to have no payout in 2024 and a below target payout in 2025 (see page
4 for additional details), the Committee has reevaluated how to best align long-term executive compensation with the interests of our stockholders while still providing incentive and retentive value to NEOs (see "2024 LTIP Design" on page 58 for more details). The 2023-2025 RTSR payout scale remains consistent with the scale used for the 2022-2024 awards. Threshold performance (with a payout of 40% of target units) is achieved at a negative 30% RTSR and the maximum performance (with a payout of 175% target units) is achieved at 37.5% RTSR, provided that the payout value cannot exceed 300% of grant date fair market value in any instance, and provided further than payout is capped at 100% of target units if absolute RTSR is negative. | | | | | | | RTSR PSU Target Payout | | Anywhere TSR Relative to S&P MidCap 400 Index TSR | Payout % of Target Units | | 37.5% | 175% | | 0% (equal performance) | 100% | | -30% | 40% | | Below -30% | 0% |
The payout percentage is calculated as follows: for every +/- one percentage point change in RTSR, the payout as a percentage of target units will increase/decrease by 2%. Upon vesting, each PSU will entitle the NEO to receive one share of Anywhere common stock. The Committee may exercise negative, but not positive, discretion in determining the performance level achieved under this metric. 2023-2025 Cumulative Free Cash Flow (CFCF) PSU Awards Summary. The Cumulative Free Cash Flow (CFCF) metric was initially adopted by the Committee first used CFCF as a PSU metric in 2015. The Committee continues to choose CFCF as a metric for PSUs because it believes the metric reflects the manner in which our stockholders measure Anywhere’s operating performance and aligns with our capital allocation priorities. In 2023, CFCF PSUs constituted 60% of each NEOs PSU awards.
Target performance is set in-linein alignment with the Company’s strategic plan for the corresponding three-year period covering the award. We do not disclose actual CFCF targets prior to the close of the related financial period for competitive reasons, but the 2022-20242023-2025 target exceedsis lower than the target for the 2021-2023 periodprior cycle. The target for the 2023-2025 CFCF cycle took into consideration the forecasted year-over-year decline in transaction volume of 19% (following a 14% year-over-year decline in transaction volume in 2022) and was alignedthe anticipated challenging market for 2023, with improvements in 2024 and 2025. The historical achievement of prior CFCF cycles shows that the realized value of the compensation received by our NEOs has been responsive to the actual performance of the Company, yielding both substantial upside and downside. However, investors have encouraged the Committee to continue to refine the program to reduce volatility of award payouts and to ensure awards have appropriate retentive value. As currently outstanding cycles are forecasted to have no payout in 2024 and a below target payout in 2025 (see page 4 for additional details), the Committee has reevaluated how to best align long-term executive compensation with the Company's 2021-2023 strategic plan when adopted. A threshold payoutinterests of 50% of the target award will be earned if 70% of target CFCF for the 2022-2024 period is achieved and a maximum payout of 200% of the target award will be earned if 130% of target CFCF is achieved. | | | | | | CFCF PSU—Design Features | Metric Description | Cumulative Free Cash Flow generated by Anywhere over a three-year period, as adjusted for items pre-established by the Committee | Target Direct Compensation Weighting | In 2022, PSU awards tied to CFCF were:
- 50% of the CEO's PSU award
- 60% of each other NEO's PSU awards
| Opportunity
(% of Target Shares Vested) | Target = 100%
Threshold = 50%
Maximum = 200%
|
The Committee has the authority to exercise negative or positive discretion to adjust the payout earned under this metric, including to take into account extraordinary corporate transactions or developments per the metric definition (see more detail below).
The Committee has continued its use of the CFCF metric in the LTI because it believes the metric:
▪reflects the manner in which our stockholders measure Anywhere’s operating performance;
▪aligns with our capital allocation priorities;while still providing incentive and
▪is working as designed, with:
◦payouts earned correlating to actual achievement of CFCF during the applicable three-year periods in relation to our budget and forecasts at the time of grant - with no payout earned in one cycle, below target payouts earned in four cycles and above target payouts earned in two cycles
| Historical achievement
CFCF PSU Cycles | Historical achievement
CFCF PSU Cycles | Historical achievement
CFCF PSU Cycles | | Cycle | Cycle | Shares Earned | Realized Value* | Cycle | Shares Earned | Realized Value* | | 2021 to 2023 | | 2021 to 2023 | 77% | 44% | | 2020 to 2022 | 2020 to 2022 | 200% | 132% | 2020 to 2022 | 200% | 132% | | 2019 to 2021 | 2019 to 2021 | 200% | 261% | 2019 to 2021 | 200% | 261% | | 2018 to 2020 | 2018 to 2020 | 72% | 39% | 2018 to 2020 | 72% | 39% | | 2017 to 2019 | 2017 to 2019 | 0% | 0% | 2017 to 2019 | 0% | 0% | | 2016 to 2018 | 55% | 26% | | 2015 to 2017 | 97% | 56% |
* Realized value is based on aggregate shares or units earned by NEOs times our stock price or unit price on the last day of the performance cycle vs. the Committee-approved target value of the awards. ◦Forecasted payouts under outstanding cycles correlate to our current achievement trajectory of CFCF during the applicable three-year periods in relation to our budget and forecasts at the time of grant
| | | | | | Forecasted achievement*
CFCF PSU Cycles Outstanding at 12.31.22
| 2021 to 2023 | Above target | 2022 to 2024 | Below target |
* As of 12.31.22; actual results will be determined at the conclusion of the applicable three-year cycle.
Mechanics of CFCF PSU Awards Granted in 2020. At the time of grant, the Committee pre-established the CFCF target and permitted enumerated adjustments for determining CFCF results for the three-year period that include increases or decreases that differ from the cash amounts assumed in the forecast underlying the target. Neither the CFCF target goal or actual achievement against the target goal take into account capital expenditures during the performance period. | | | | | | | CFCF PSU Target Payout | | CFCF Achievement Against Target | Payout % | | 130% or above | 200% | | 100% | 100% | | 70% | 50% | | Below 70% | 0% |
▪former parent legacy payments; ▪taxes; ▪pension payments; The▪business optimization & restructuring expenses;
▪extinguishment of debt; ▪obligations under the relocation securitization programs; and ▪litigation and regulatory compliance, net of insurance reimbursement. In addition, the Committee has incorporated investor feedback from the 2018 Investor Outreach Program in the PSU awards granted since 2019, such that the calculation of CFCF excludes any earnings generated from acquisitions occurring during the three-year performance period with a purchase price in excess of $25 million, including contingent earnouts, if such acquisition was not incorporated into the CFCF target goal. Neither the CFCF target goal nor actual achievement against the target goal take into account capital expenditures during the performance period. Other specific adjustments for the 2022 CFCF metric relate to the use of cash that differs from management’s forecast underlying the target such as:
▪former parent legacy payments;
▪taxes;
▪pension payments;
▪business optimization & restructuring expenses;
▪earnings, losses or investments in RealSure;
▪the impact of a change in the timing of the close of our sale of our title insurance underwriter (which occurred on scheduled in the first quarter of 2022);
▪extinguishment of debt;
▪obligations under the relocation securitization programs; and
▪litigation and regulatory compliance, net of insurance reimbursement.
Achievement Against Performance Metrics and Payouts under the 2020-20222021-2023 PSU Award CyclePayouts
On February 23, 2023,2024, the Committee made the determinations described below with respect to the PSU awards granted in 20202021 that measured performance over a three-year performance period ended December 31, 2022.2023. NoWith respect to the 2021-2023 RTSR PSU performance, the Committee determined that no payout was earned underwith respect to the RTSR metricawards granted in 2021 that measured performance over a three-year performance period ended December 31, 2023. The 2021-2023 RTSR PSUs utilized the same payout formula as described in "2023 Relative TSR Awards" above..
| | | | | | | | | | | | Relative Total Stockholder Return Results 0% Payout Earned (2020-2022 Cycle) | | Anywhere TSR | S&P MidCap 400 | Actual Relative TSR | Payout | | -32% | 21% | -52% | 0% |
RTSR Performance Range (2020-2022 Cycle)
▪Target if RTSR is equal to the
S&P MidCap 400 Index
▪Maximum if RTSR better than +37.5%
▪Threshold if RTSR is better than -30% | | | | | | | | | | | | | Relative Total Stockholder Return Results | | Anywhere TSR | S&P MidCap 400 | Actual Relative TSR | Payout | | -48% | 19% | -68% | 0% |
Maximum
With respect to the 2021-2023 CFCF PSU performance, the Committee determined that the payout waspercentage earned under the CFCF metric.
The following table sets forth the:
▪Pre-established CFCF performance levels overmetric was 77%, based on the three-year period of January 1, 2020 to December 31, 2022 at threshold, target and maximum payout; and
▪Actualactual CFCF performance achieved, duringand determined the 2020 tofollowing adjustments were appropriate: variations in tax payments, securitization, legacy and restructuring payments from those forecasted in the CFCF target, the cash impact from the sale of the title underwriter in 2022, period.litigation cash outlays in excess of those contemplated in the CFCF target, cash outlays from the investment in RealSure (which was not contemplated at the time the CFCF goal was established) and the 2023 CEO Exceptional Achievements Award.
The Committee determined in February 2022 not to make any specific adjustments permitted under the 2020-2022 CFCF PSU awards as such adjustments would have had the net impact of positively increasing the level of Cumulative Free Cash Flow achieved.
| Cumulative Free Cash Flow† Results 200% Payout Earned (2020-2022 Cycle) | Cumulative Free Cash Flow† Results | | Cumulative Free Cash Flow† Results | Performance Level | Performance Level | Payout as %
of Target | CFCF (in millions) | Performance
Level | Payout as %
of Target | CFCF
(in millions) | | Threshold | Threshold | 50% | 517 | Threshold | 50% | 705 | | Target | Target | 100% | 738 | Target | 100% | 1,007 | | Maximum | Maximum | 200% | 960 | Maximum | 200% | 1,309 | | Actual | Actual | 200% | 1,254 | Actual | 77% | 866 |
† Neither the CFCF target goal ornor actual achievement against the target goal taketakes into account capital expenditures during the performance period. See Annex A for a definition and a reconciliation of Free Cash Flow to the most directly comparable GAAP measures.
The table below shows the aggregate shares earned by NEOs under the 2020-20222021-2023 PSU cycle, along with the payout value of those shares or units, as applicable, based on the results discussed above. | | | | | | | | | | | | | | | | Aggregate Payouts Earned under the 2020-2022 PSU Award Cycle | Name(1) | Target Award ($) | Aggregate Shares Earned (#)(2) | 2022 Payout Value ($)(2)(3) | Target Value Realized (%)(4) | | Ryan Schneider | 4,500,000 | | 463,916 | | 2,964,423 | | 66 | | Charlotte Simonelli | 600,000 | | 74,226 | | 474,304 | | 79 | Susan Yannaccone(2) | 100,000 | | n/a | 200,000 | | 200 | | Marilyn Wasser | 550,000 | | 68,040 | | 434,776 | | 79 |
_______________ | | | | | | | | | | | | | | | | Aggregate Payouts Earned under the 2021-2023 PSU Award Cycle | Name(1) | Target Award ($) | Aggregate Shares Earned (#) | 2023 Payout Value ($)(2)(3) | Target Value Realized (%)(3) | | Ryan Schneider | 4,500,000 | | 122,872 | | 996,492 | | 22 | | Charlotte Simonelli | 675,000 | | 22,117 | | 179,369 | | 27 | | Susan Yannaccone | 300,000 | | 9,830 | | 79,721 | | 27 | | Marilyn Wasser | 550,000 | | 18,022 | | 146,158 | | 27 |
(1)Ms. McSherry joined the Company in February 2022 and did not participate in the 2020-20222021-2023 PSU award cycle. (2)Ms. Yannaccone was not an executive officer of the Company in February 2020 when the PSU awards were granted, but she received a cash-based award (with a target value of $100,000) that was tied to achievement of the same CFCF target for the 2020-2022 performance period described in this CD&A. In accordance with SEC rules, the cash award earned by Ms. Yannaccone for the 2020-2022 CFCF award is reported in the "Non-Equity Incentive Compensation" column of the Summary Compensation Table for 2022. She did not receive an award tied to RTSR for the 2020 to 2022 cycle. (3)The 20222023 payout value is based on $6.39$8.11 per share, the closing market price of Anywhere common stock on the NYSE on December 30, 202229, 2023 (the last trading day of the performance cycle), other than with respect to Ms. Yannaccone (see footnote 2).
(4)(3)Target value realized represents the 20222023 payout value divided by the target award.
See page 5 of this proxy statement for the status of outstanding PSU cycles as of December 31, 2022. Actual results will be determined based upon results under the applicable metric at the conclusion of the applicable three-year cycle.
2022 Time-Based Awards
Restricted Stock Units. Vesting restrictions on restricted stock units, or RSUs, lapse over three years, with 33.33% lapsing on each anniversary of the grant date.
When setting LTI awards, our Committee considers the important role of RSUs in:
▪encouraging executive retention; and
▪aligning the interests of our NEOs with the interests of our stockholders, as the value of these time-based awards will increase or decrease with the value of our stock.
Dividend Equivalent Units.PSUs2024 Annual and RSUs are entitled to be credited with dividend equivalent rights related to any cash dividend paid by Anywhere. Options do not carry dividend equivalent rights. Anywhere has not declared a dividend since the fourth quarter of 2019. Any additional units that that may credited as dividend equivalents are subject to the same vesting requirements, settlement provisions, and other terms and conditions as the original award to which they relate. No dividend equivalents will be paid unless and until the underlying award is vested or settled.Long-Term Incentive Programs
2020 Pre-Existing Restricted Cash Award to Ms. Yannaccone. Prior to her promotion to an executive officer role in November 2020, Ms. Yannaccone received a restricted cash award in February 2020 (in lieu of a RSU award) that vests in three equal tranches on each of the first three anniversaries of the grant date, subject to her continued employment and compliance with her restrictive covenants agreement with the Company including those related to non-competition and non-solicitation.
Cash amounts received in 2022 under this prior award ($66,667) are reported in the Summary Compensation Table in the "Bonus" column.
"Make-Whole" Inducement Award to Ms. McSherry. As an inducement to her hiring in the first quarter of 2022, the Committee granted Ms. McSherry an RSU award with a grant date fair value in the amount of $2,099,988, which was approximately equal to the value of cash and equity awards forfeited by Ms. McSherry in connection with her change in employer. The RSUs vest in equal installments over three years on each of the first three anniversaries of the grant date, subject to continued employment and compliance with her restrictive covenants agreement with the Company including those related to non-competition and non-solicitation.
The RSU award, including any proceeds, gains or other economic benefit in respect of the award, are subject to the terms and conditions of the Company’s Clawback Policy, which allows the Board to recoup incentive compensation in the event of a material restatement or adjustment of our financial statements, misconduct, or breach of Ms. McSherry's restrictive covenants with us, including those related to non-competition and non-solicitation.
2020 One-Time Market Share Performance Awards
In the second half of 2020, the Committee granted each NEO a cash-based performance incentive award tied to a market share metric (each, a "Market Share Performance Award"). Each Market Share Performance Award required achievement of growth in Anywhere's share of existing homesale transaction volume over a two-year period ended September 30, 2022, with an additional performance period applicable to the CEO based upon market share growth for the one-year period ending September 30, 2023.
In the fourth quarter of 2022,February 2024, the Committee determined that the Market Share Performance Awards for the two-year period ended September 30, 2022, were not earned.
The Market Share Performance Awards also included a retention component, which vested in 2021 and is reported in the Bonus columndesign of the Summary Compensation Table for 2021.
Our Clawback Policy applies to the CEO's outstanding Market Share Performance Award, which Clawback Policy will allow our Board to recoup2024 annual cash incentive compensation in the event of a material restatement or adjustment of our financial statements, the CEO's misconduct, or the CEO's breach of his restrictive covenantsawards would be substantially consistent with the Company, including those related to non-competition and non-solicitation.
2023 Annual and Long-Term Incentive Programs
2023 Executive Incentive Plan. During the 2022 Investor Outreach program, certain investors noted the volatility in award payouts under the EIP and suggested design and/or metric considerations, including those that might moderate extreme variations.
In February 2023, the Committee determined to make changes to the design of the 2023 EIP, which are intendedprogram.
2024 LTI Award Design Changes Beginning in 2022 and continuing through 2023, the Committee had robust discussions regarding how to reducebetter mitigate the impact of the cyclicality of the residential real estate industry on the volatility in EIPof award payouts by implementingas well as to address the following changes: First, the Committee determined to tie a portionimpact of the EIP award tocurrent historic downturn in the achievementindustry, which has dramatically reduced or eliminated the retentive value of strategic goals during the year so that funding was not tied to a single financial metric. Specifically, 70% of the 2023 EIP will be funded based upon the achievement of Plan Operating EBITDA. The remaining 30% of the 2023 EIP will be funded based upon the achievement of qualitative pre-established strategic and business objectives. The objectives include those focused on the following strategic priorities for 2023: operational excellence (including cost savings), consumer experience, and a relentless focus on talent.
Second, to further manage volatility, the Committee determined to require a higher performance multiple to achieve maximum funding under the Operating EBITDA component of the 2023 EIP and a lower multiple to obtain threshold funding. Specifically, the Operating EBITDA component of the 2023 EIP will be funded at the maximum level of 200% upon achievement of 125% of the target goal (compared to 120% of the target goal under the 2022 EIP) and at the threshold level of 25% upon achievement of 75% of the target goal (compared to 85% of the target goal under the 2022 EIP).
outstanding awards in our incentive compensation programs. The Committee also modified the design of the 2023 EIPdiscussed how to reduce Committee discretion with respect to individual payouts. Individual payouts must be within +/-25% of the aggregate funding percentage reached under the 2023 EIP, and consistent with the 2022 EIP, total payouts under the 2023 EIP may not exceed the aggregate funded amount under the plan. NEO EIP targets as a percentage of earned base salary under the 2023 EIP remain unchanged. 2023 Long-Term Incentive Awards.
The Committee determined to increase Mr. Schneider's aggregate LTI award from $7.5 million to $8.0 million. Mr. Schneider's 2023 LTI award is 60% in the form of PSUs (60% of which is aligned with CFCF goals and 40% of which aligned with RTSR goals, both over a three-year period), and 40% in the form of RSUs. The Committee determined to increase the value of Mr. Schneider's LTI award by $500,000 based upon his leadership during the housing downturn that commenced in 2022, including the Company taking actions that resulted in realized cost savings of $150 million during the year, and his leadership in developing and implementing the Company's long-term strategy announced at its Investor Day in May 2022. The Committee also modified the weighting of the metrics under Mr. Schneider's PSU awards to align with the relative weighting of the metrics for our other NEOs.
For our other NEOs, the regular program 2023 LTI awards consist of the same forms of equity and weighting as set forth on page 43, with the 2023 to 2025 PSU awards continuing to be based on CFCF and RTSR. The value of the 2023 LTI grant awarded to Ms. Yannaccone was increased by $600,000 over the value of her 2022 LTI grant in recognition of her extensive new responsibilities as President & CEO of both Anywhere Brands and Anywhere Advisors.With respect to each of Ms. Yannaccone and Ms. McSherry, the Committee determined to award a special long-term incentive award in the form of RSUs that will cliff vest on the third anniversary of the date of grant, with the values of such RSU
awards in the amounts of $1.0 million and $500,000, respectively.
These special LTI awards recognize the critical importance of the respective leadership roles of Ms. Yannaccone's and Ms. McSherry in the execution of the Company’s transformation strategy, as articulated at its Investor Day in May 2022;address the significant decline in realizable value of their existingoutstanding equity awards;(PSU) awards and the competitive landscapelow realized value of incentive award payouts in recent years, resulting in retention risk, despite
▪the Company's stock performing well compared to its direct competitors (as shown in chart on page 3), ▪the Company's generation of $200M of operating EBITDA and $67M of free cash flow in 2023 (for comparison, four of the Company's five direct competitors reported either lower or negative operating EBITDA for executive talent2023), and ▪management's exceptional performance, including reducing total indebtedness, realizing significant cost savings and settling, on a nationwide basis, the sell-side antitrust class action litigation (see page 1 for more details). During investor outreach in late fall 2023, when asked about changes being considered for the LTI awards, investors (1) appreciated that a shift to setting annual free cash flow targets would allow the Company to better respond to the cyclicality of the industry, (2) reinforced the continued use of a relative metric but did not express any concerns with utilizing a TSR "modifier", (3) were flexible with modifying our peer group to one that is more representative of the Company's business and (4) expressed a preference to maintain the CEO's current equity mix. Incorporating that investor feedback, in February 2024, the Committee adopted the following changes to the 2024 LTI awards: ▪In light of the current challenges forecasting long-term performance goals in an extremely volatile and macro-impacted industry, the Committee modified the CFCF PSUs so that free cash flow targets are set annually with actual payout being the average of the payouts of the three separate annual achievements, instead of three-year cumulative goal set at the beginning of the three-year cycle; ▪In order to ensure continued alignment between payouts and long-term performance, eliminated the separate PSU RTSR units, and added a TSR modifier to PSU CFCF units, specifically modifying free cash flow achievement by +/- 15% based upon the Company’s TSR percentile ranking against a new customized peer
group (with a multiplier of 0.85x used if the Company’s percentile ranking fell below the 25th percentile and a multiplier of 1.15% used if the Company’s percentile ranking was above the 75th percentile); and ▪In order to more accurately measure our success against peers facing the same macroeconomic dynamics, modified the TSR peer group to our compensation peer group and, within that group, direct competitors will be weighted 2x. 2024 Long-Term Incentive Awards In addition to the design changes to the 2024 LTI awards described above, the Committee also modified the mix of the equity vehicles for the non-CEO NEOs so that the restricted stock units would comprise 60% of the long-term incentive grant date value and the potential disruption caused by unplanned attrition.performance stock units would comprise the remaining 40% (versus the existing 50%/50% split between RSUs and PSUs). This change increases retention during the unprecedented market certainty while still aligning with shareholders through heavy emphasis on stock. The Company will continue to re-evaluate the mix of time- and performance-based vehicles in light of market conditions and the macro-economic environment. The table below sets forth the grants made to our NEOs by the Committee, effective February 28, 2023,22, 2024, as part of the regularannual LTI program. | | | | | | | | | | | | | | | | | | | 2023 Long-Term Incentive Grants (Regular Program) | | Name | Shares Underlying Performance-Based PSU Awards(1) | RSUs (#) | LTI Target Direct Compensation Value ($)(1)(2) | Grant Date Fair Value ($)(1)(2) | | RTSR (#) | CFCF (#) | | Ryan Schneider | 331,606 | | 497,409 | | 552,677 | | 8,000,000 | | 7,147,769 | | | Charlotte Simonelli | 67,357 | | 101,036 | | 168,393 | | 1,950,000 | | 1,776,883 | | Melissa McSherry(3) | 34,542 | | 51,813 | | 86,355 | | 1,000,000 | | 911,217 | | Susan Yannaccone(4) | 51,813 | | 77,720 | | 129,533 | | 1,500,000 | | 1,366,833 | | | Marilyn Wasser | 49,395 | | 74,093 | | 123,488 | | 1,430,000 | | 1,303,046 | |
______________ | | | | | | | | | | | | | 2024 Long-Term Incentive Grants (Regular Program) | | Name | Shares Underlying Performance-Based PSU Awards(1) (#) | RSUs (#) | LTI Target Direct Compensation Value ($)(1)(2) | | Ryan Schneider | 788,177 | | 525,451 | | 8,000,000 | | | Charlotte Simonelli | 128,078 | | 192,118 | | 1,950,000 | | | Marilyn Wasser | 72,249 | | 108,374 | | 1,100,000 | | | Susan Yannaccone | 98,522 | | 147,783 | | 1,500,000 | |
(1)SharesFor PSU awards, shares underlying PSUsuch awards and LTI target direct compensation value and grant date fair value are presented at target. (2)The number of target PSUs granted under the RTSR metric was determined by dividing the value of the award approved by the Committee by our closing stock price on the date of grant of $5.79. The grant date fair value$6.09. 2024 Special Incentive Award On February 16, 2024, the Committee approved a special retention and performance award (the "Simonelli Award") for Ms. Simonelli, comprised of $3.22 per RTSR PSUtwo award vehicles under the Company's Second Amended and Restated 2018 Long-Term Incentive Plan, a $275,000 cash-based award and $275,000 cash-settled restricted stock unit award, which was determined,granted and priced on the third trading day following the filing of our 2023 Annual Report in accordance with FASB ASC Topic 718, bythe Committee's general practice. In granting the Simonelli Award, the Committee considered the criticality of Ms. Simonelli's continuing leadership in managing the Company’s balance sheet and capital structure and in achieving the Company's 2024 cost savings goals. The Simonelli Award includes a Monte Carlo simulation performed by an independent third-party.service requirement pursuant to which Ms. Simonelli must remain employed with the Company through February 28, 2026 (the "Service Term") as well as a performance requirement to achieve (i) a pre-established level of realized cost savings for the year ending December 31, 2024; and (ii) the successful extension, refinancing, replacement or repayment of our Term A loans on or before November 9, 2024. (3)Does not include 86,355 restricted stock units that will cliff vest on the third anniversaryUpon successful achievement of the grant date.
(4)Does not include 172,711 restricted stock units thatperformance requirements (which apply to both the cash-based and cash-settled RSU awards), the Simonelli Award will cliff vest onbe payable in early 2025, but subject to repayment if Ms. Simonelli voluntarily leaves the third anniversaryCompany (other than for Good Reason) prior to the end of the grant date.Service Term.
The Simonelli Award contains customary termination and clawback provisions.
Compensation Policies and Practices Stock Ownership Requirements Anywhere’s Stock Ownership Guidelines encourage stock ownership among the executive officer members of our Executive Committee to further the objective of aligning our executives’ interests with those of our stockholders. Under Anywhere’s stock ownership guidelines, executive officer members of the Executive Committee are required to own shares of our common stock equal to a specified multiple3x their annual base salary and the CEO is required to own shares of theirour common stock equal to 6x his annual base salary. Anywhere common stock, deferred stock units and unvested RSUs count toward achieving the ownership requirement. Optionsrequirement, while options and unearned PSUs are not counted. Compliance must be achieved within five years of anbecoming subject to the Guidelines. During that five-year period and until the ownership target is met, those executive officer becoming an Executive Committee member. Executive Committee membersofficers subject to the Guidelines must retain one-half of the net shares upon exercise of an option (after (after giving effect to the exercise price and applicable taxes upon exercise) and one-half of the net full-value shares that vest until the Executive Committee membersuch executive has met his or hertheir minimum ownership level. In the event that an Executive Committee memberexecutive has not met the ownership requirement at the end of the five-year period, such executive must retain 100% of the net shares until compliance is achieved.
| | | | | | Stock Ownership Guidelines | CEO | 6x salary | Other EC Members | 3x salary |
Mr. SchneiderEach executive officer of our Executive Committee satisfied the ownership requirements as of December 31, 2022. Each of2023, including Ms. Simonelli,Reu-Narvaez and Ms. McSherry, and Yannaccone has five years fromwho were each within the
date on which she became a member of the Executive Committee to meet the ownership requirement. Due to declines in the Company's stock price, Ms. Wasser's stock ownership was at 2.7x base salary as of December 31, 2022. She must retain 100% of her net shares until five-year compliance is reachieved.period.
Severance Protection As described in more detail under “—Agreements with Named Executive Officers” and “—Potential Payments upon Termination or Change in Control,” eachEach of our NEOs is entitled to severance pay and benefits upon a “qualifying termination”—meaning, a termination without “cause” by the Company or a termination for “good reason” by the executive.executive—in addition to any acceleration of long-term incentive awards and other potential payments upon termination or a change in control. See “Agreements with Named Executive Officers”and“Potential Payments upon Termination or Change in Control" for more details.
For each of our NEOs, severance pay consists of cash payments equal to a multiple of the sum of the NEO's annual base salary and target annual incentive, along with the continuation of the NEO's welfare benefits. The severance multiple for our CEO is 2.0 and for each other NEO is 1.0 (although, in the case of a qualifying termination of employment within twenty-four months following or in connection with a change in control of the Company, their multiple is 2.0). The higher multiples of annual base salary and target annual incentive payable to Mr. Schneider are based upon his overall greater responsibilities for our performance. No NEO is entitled to any tax reimbursement protection for “golden parachute excise taxes.” The Committee believes the severance and benefits payable to our NEOs under the foregoing circumstances aid in the attraction and retention of these executives as a competitive practice and are balanced by the inclusion of restrictive covenants (such as non-compete provisions) to protect our value following a termination of an NEO's employment without cause or by the NEO for good reason. In addition, we believe the provision of these benefits will keep the executives focused on the operation and management of the business. Hedging and Pledging Prohibited Our Procedures and Guidelines Governing Securities Trades by Company Personnel prohibits all Directors, executive officers and employees from engaging in hedging transactions or pledging the Company’s securities, including but not limited to, our common stock, and no waiver from that prohibition may be granted by the Company. Limited Other Benefits and Perquisites Our compensation program does not include other material benefits or perquisites. All eligible employees, including NEOs, may participate in our 401(k) plan. The plan currently provides a matching contribution of 60% of amounts contributed by the officer, subject to a maximum of 6% of eligible compensation.
In December 2017, the Committee froze participation in our Executive Deferred Compensation Plan, which previously allowed NEOs to defer cash and/or equity under that plan. None of our NEOs participate in a now-closed, defined benefit pension plan and excess benefit plan (future accruals of benefits were frozen on October 31, 1999). Qualifying employees who are required to relocate in connection with their commencement of employment with us are entitled to relocation benefits through Cartus, including limited tax gross-up assistance. Timing & Valuation of Equity Grants The Committee's practice generally is to grant LTI awards to the NEOs at the regularly scheduled Committee meeting in February of each year with awards granted and priced on the third trading day following the filing of our 2023 Annual Report on Form 10-K.Report. The Committee retains the ability to determine that another grant date may be appropriate in certain circumstances. During the year, the Committee also may approve equity awards, typically for executives hired or promoted and in connection with acquisitions. The Committee also has delegated to the CEO certain limited authority to make grants to non-Section 16 officers and the Committee is apprised of any such grants on a quarterly basis. In connection with valuing the grants of equity awards, it is our policy generally to use, as the grant or strike price for any equity award, the closing price of our common stock on the effective date of the grant. For RSUs and for PSUs, the Committee typically approves a dollar value, which is then divided by the closing sale price of our common stock on the date of grant. For determining the grant date fair value of PSUs that have an RTSR metric, the Committee utilizes a Monte Carlo simulation performed by an independent third-party valuation firm to determine fair value. Insider Trading Policies and Processes The Company has adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of the Company's securities by directors, officers and employees, that are reasonably designed to promote compliance with insider trading laws, rules and regulations, and the applicable NYSE listing standards.
Tax Considerations The Committee remains committed to continuing to link executive compensation with Company performance through performance-based and at-risk compensation vehicles in 20222023 and future years, despite the elimination of the performance-based compensation exemption under Section 162(m) of the Internal Revenue Code upon the passage of the Tax Cuts and Jobs Act in December 2017. Clawback Policy The Company has maintained since 2014 a Clawback Policy since 2014,applicable to its executive officers, and the current key terms of which are summarized below. The Committee intends to reviserevised its Clawback Policy in November 2023 to (1) align with the new NYSE listing requirements requiring the Company to claw back any requirements established under NYSE rules priorbonuses, equity or other incentive compensation that is tied to the effective dateperformance of a financial reporting measure in the event such rules.compensation is erroneously received by any current or former executive officer during the three completed fiscal years immediately preceding the year in which the Company is required to prepare an accounting restatement due to material noncompliance with financial reporting requirements and (2) retain its discretionary policy allowing the Committee to claw back all incentive and retention-based compensation in the event of financial restatements and certain misconduct, including the commission of any felony or act of moral turpitude; any violation of Company policy or applicable legal or regulatory requirement that may result in significant financial, competitive or reputational harm; or fraud, embezzlement, misrepresentation, willful misconduct, dishonesty or corruption. In addition, each of our NEOs is subject to one or more restrictive covenant agreements with Anywhere (which include non-compete and non-solicitation provisions) pursuant to which the Company can clawbackclaw back severance payments or stop the payment of equity awards if the restrictive covenant agreement is breached. | | | | | | Clawback Policy Overview | Whom does the Clawback Policy apply to? | Current and former Section 16 officers | What compensation can be clawed back? | Cash incentive or equity-based compensation | What situations give rise to claw back? | The Committee has discretion to claw back compensation in the event of:
- A material restatement or adjustment to the financial statements that would have had the effect of reducing incentive compensation received in past three years
- The individual's misconduct, including knowing legal/regulatory breaches, fraud, knowing misrepresentations and corruption resulting in material financial or reputational harm
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Compensation Risk Assessment As part of its oversight of the Company’s executive compensation program, the Committee annually considers the impact of the Company’s executive compensation program, and the incentives created by the compensation awards
Role of Committee, Advisors and Executives in Setting Executive Compensation
All of the members of the Committee are Independent Directors.
The Committee has the power and authority to oversee our compensation policies and programs and makes all compensation-related decisions for our NEOs. While the Committee may take into account recommendations from its independent compensation consultant as well as the CEO (other than with respect to his own compensation), the Committee has final approval over all compensation decisions for our executive officers.
The Committee’s independent compensation consultant reviews compensation materials presented by management to the Committee, participates in one or more pre-meeting calls with the Committee Chair and attends all regularly scheduled meetings of the Committee. In 2022, the Committee’s independent compensation consultant provided de minimis services not related to executive or director compensation.
The CEO annually reviews the performance of, and makes recommendations regarding, each of our NEOs (other than himself). The CEO’s performance is annually reviewed by the Committee with input from the Board. The conclusions reached and recommendations based upon these reviews, including with respect to base salary adjustment and annual and long-term incentive compensation targets and actual payout amounts, are presented to the Committee, which has the discretion to modify any recommended adjustments or awards to our executives. The Company’s Chief People Officer participates in the data analysis process.
| | | | | | | | | Key Facts:
Independent Compensation Consultant
| Committee’s Independent Compensation Consultant | | Meridian Compensation Partners, LLC, or Meridian | Annual Independence Assessment | | Meridian’s independence was assessed and confirmed by the Committee in 2022 | Key Services Provided to the Committee in 2022 | | Meridian provides the Committee with analyses and advice on Executive & Director compensation matters, including in 2022:
- Competitive market pay analyses utilizing peer group and survey data
- Short- and long-term incentive program design for 2022 and 2023
- Recommendations with respect to the compensation peer group
- Recommendations with respect to Director compensation
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Our Peer Group
The Committee annually reviews our compensation peer group in consultation with its independent compensation consultant.
In the second half of 2021, the Committee determined to expand its peer group to include five businesses that had more recently become publicly traded or had revised their business model to be more comparable to the Company.
The Committee also determined to remove three businesses from its peer group and to replace one business with a similar business that was more comparable to the Company in size.
In November 2021, the Committee received a detailed and comprehensive analysis of peer group information and general industry survey data designed by its independent compensation consultant to educate the Committee on current compensation ranges by executive position, together with plan design and component weighting information.
The Committee considered the analysis presented at its November 2021 meeting as well as an evaluation of executive performance in early 2022 in setting NEO compensation for 2022.
The Committee also utilized this peer group in connection with its consideration of NEO compensation for 2023.
Peer Group Generally.Our peer group is made up of both direct peers, and given the limited size of that group, peers in industries that resemble the Company’s cyclicality, business model and financial performance or that are influenced by the housing market or share traits of our other business units.
Although the firms in our peer group employ executives with a skill set comparable to those of the Company's executives, many operate in businesses with very different business cycles from residential real estate. Accordingly, the Committee has not relied on our compensation peer group when constructing the RTSR metric for PSU awards and recognizes the need to look beyond that peer group, to other more broad-ranging survey data when setting executive compensation. However, the Committee considers only aggregated survey data, not the identity of the individual survey data companies.
In terms of size, compared to our 2022 peer group, based upon data as of and for the year ended December 31, 2022, Anywhere’s revenues were at the 50th percentile and its market capitalization was second lowest of its peers.
| | | | | | | | | | | | | Anywhere 2022 Peer Group | Company | Revenue ($)(1) (in millions) | Market Cap ($)(1) (in millions) | Primary Comparable Category | | Arthur J. Gallagher & Co. | 8,271 | 39,752 | Brokerage business model | | Compass, Inc. | 6,523 | 1,015 | Real estate brokerage company | | Cushman & Wakefield plc | 10,106 | 2,813 | Commercial real estate services | | eXp World Holdings, Inc. | 4,598 | 1,692 | Real estate brokerage company | | First American Financial Corporation | 7,605 | 5,419 | Insurance company with title segment | Fortune Brands Innovations, Inc.(2) | 4,723 | 7,324 | Influenced by housing market | | Hyatt Hotels Corporation | 3,271 | 9,689 | Franchisor | | Jones Lang LaSalle Incorporated | 20,862 | 7,564 | Real estate services provider | | KB Home | 6,904 | 2,726 | Influenced by housing market | | Leggett & Platt, Incorporated | 5,147 | 4,273 | Influenced by housing market | | Opendoor Technologies Inc. | 15,567 | 736 | iBuyer & home swap market | | PulteGroup, Inc. | 16,229 | 10,373 | Influenced by housing market | | Redfin Corporation | 2,284 | 461 | Real estate brokerage company | | Toll Brothers, Inc. | 10,265 | 5,527 | Influenced by housing market | | Zillow Group, Inc. | 1,958 | 7,593 | Real estate services platform |
_______________
(1)Based on publicly-available information from the S&P Capital IQ database’s definition of Total Revenue and Market Capitalization as of December 31, 2022.
(2)Fortune Brands Home & Security, Inc., changed its name to Fortune Brands Innovations, Inc. on December 15, 2022.
COMPENSATION AND TALENT MANAGEMENT COMMITTEE REPORT The Compensation and Talent Management Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation and Talent Management Committee recommended to the Anywhere Real Estate Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. COMPENSATION AND TALENT MANAGEMENT COMMITTEE Enrique Silva (Chair) Fiona P. Dias Egbert J. Perry Matthew J. Espe Sherry M. Smith 20222023 Summary Compensation Table
The table below sets forth the compensation we provided in 2023, 2022 2021 and 20202021 to our named executive officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position(1) | Year | Salary ($)(2) | Bonus ($)(3) | Stock Awards ($)(4)(5)(6) (7) | Option Awards
($) | Non-Equity Incentive Plan Compen-sation ($)(8) | Change in Pension Value / Non-qualified Deferred Comp Earnings ($)(9) | All Other Compen-sation ($)(10) | Total
($) | Ryan M. Schneider Chief Executive Officer and President | 2022 | 1,000,000 | — | 6,796,238 | — | — | — | 11,832 | 7,808,070 | | 2021 | 1,000,000 | 1,000,000 | 6,607,955 | — | 4,000,000 | — | 11,292 | 12,619,247 | | 2020 | 789,231 | — | 7,258,745 | — | 3,115,384 | — | 6,956 | 11,170,316 | Charlotte C. Simonelli Executive Vice President, Chief Financial Officer and Treasurer | 2022 | 940,385 | — | 1,406,146 | — | — | — | 11,832 | 2,358,363 | | 2021 | 871,154 | 750,000 | 1,242,939 | — | 1,742,308 | — | 11,186 | 4,617,587 | | 2020 | 669,231 | 300,000 | 1,174,255 | — | 1,511,538 | — | 6,636 | 3,661,660 | Melissa K. McSherry(7) Executive Vice President, Chief Operating Officer | 2022 | 631,731 | — | 3,037,405 | — | — | — | 8,075 | 3,677,211 | Susan E. Yannaccone President and CEO, Anywhere Brands and Anywhere Advisors | 2022 | 646,154 | 66,667 | 843,700 | — | 200,000 | — | 15,164 | 1,771,685 | Marilyn J. Wasser Executive Vice President, General Counsel and Corporate Secretary | 2022 | 600,000 | — | 1,031,170 | — | — | — | 11,406 | 1,642,576 | | 2021 | 600,000 | 900,000 | 1,012,768 | — | 1,200,000 | — | 10,866 | 3,723,634 | | 2020 | 530,769 | — | 1,076,403 | — | 1,200,000 | — | 5,008 | 2,812,180 |
_______________ | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position(1) | Year | Salary
($) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards
($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(6) | Total
($) | Ryan M. Schneider Chief Executive Officer and President | 2023 | 1,000,000 | — | 7,147,769 | — | 1,900,000 | 12,012 | 10,059,781 | | 2022 | 1,000,000 | — | 6,796,238 | — | — | 11,832 | 7,808,070 | | 2021 | 1,000,000 | 1,000,000 | 6,607,955 | — | 4,000,000 | 11,292 | 12,619,247 | Charlotte C. Simonelli Executive Vice President, Chief Financial Officer and Treasurer | 2023 | 950,000 | — | 1,776,883 | — | 902,500 | 12,012 | 3,641,395 | | 2022 | 940,385 | — | 1,406,146 | — | — | 11,832 | 2,358,363 | | 2021 | 871,154 | 750,000 | 1,242,939 | — | 1,742,308 | 11,186 | 4,617,587 | Melissa K. McSherry(4) Executive Vice President, Chief Operating Officer | 2023 | 750,000 | — | 1,411,213 | — | 712,500 | 11,996 | 2,885,709 | | 2022 | 631,731 | — | 3,037,405 | — | — | 8,075 | 3,677,211 | Marilyn J. Wasser Executive Vice President, General Counsel and Corporate Secretary | 2023 | 600,000 | 1,000,000 | 1,303,046 | — | 570,000 | 11,946 | 3,484,992 | | 2022 | 600,000 | — | 1,031,170 | — | — | 11,406 | 1,642,576 | | 2021 | 600,000 | 900,000 | 1,012,768 | — | 1,200,000 | 10,866 | 3,723,634 | Susan E. Yannaccone(4) President and CEO, Anywhere Brands and Anywhere Advisors | 2023 | 750,000 | 66,667 | 2,366,830 | — | 712,500 | 5,827 | 3,901,824 | | 2022 | 646,154 | 66,667 | 843,700 | — | 200,000 | 15,164 | 1,771,685 |
(1)Ms. McSherry joined the Company on February 22, 2022 and Ms. Yannaccone became a named executive officer for the first time in 2022. Ms. McSherry stepped down as Chief Operating Officer effective February 26, 2024, after which she transitioned to a non-officer role as strategic advisor to the Company until April 1, 2024. (2)The following were the annual base salaries payable to each of the named executive officers as of December 31, 2022: Mr. Schneider, $1,000,000; Ms. Simonelli, $950,000; Ms. McSherry, $750,000;For Ms. Yannaccone, $750,000, and Ms. Wasser, $600,000. (3)Represents amountsrepresents amount vested under a restricted cash award granted in February 2020, to Ms. Yannaccone, prior to her promotion to an executive officer role in November 2020. The award vestsvested in three equal tranches on each of the first three anniversaries of the grant, subject to her continued employment and compliance with her restrictive covenants agreement with the Company, including those relatedrelating to non-competition and non-solicitation.
For Ms. Wasser, represents a special $1 million cash exceptional achievements award, described more fully in "2023 Wasser Special Exceptional Achievements Award" on page 50. As discussed in the CD&A, Mr. Schneider was paid a $5 million cash Exceptional Achievements Award in November 2023; however, as that award is subject to clawback if Mr. Schneider resigns his employment (without Good Cause) prior to March 1, 2025, it is not reportable in this table until that time.
(4)(3)As more fully describedThe amounts shown in footnotes (5) and (6),this column represent the table reflects the aggregate grant date fair valuevalues of equity awardsRSUs, CFCF PSUs and RTSR PSUs granted in 2022to the NEO, computed in accordance with FASB ASC Topic 718. The assumptions we used in determining the grant date fair value of these awards are described in Note 13, "Stock-Based Compensation" to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.
(5)On March 1, 2022, the Company made grants to our named executive officers under its 2022 long-term incentive program. Under the program, each named executive officer received two performance share unit awards (one based upon a Relative Total Stockholder Return metric2023. RSUs and the other based upon a Cumulative Free Cash Flow metric) and a restricted stock unit award.
For all named executive officers the performance share unit award based upon the relative total stockholder return metric has a grant date fair value of $18.00 per share, and the performance share unit award based upon the Cumulative Free Cash Flow metric and the restricted stock unit award bothCFCF PSUs have a grant date fair value of $12.37$5.79 per share. For RTSR PSUs, the number of PSUs granted was determined by dividing the value of the award approved by the Committee by our closing stock price on the date of grant ($5.79), while the grant date fair value of $3.22 per RTSR PSU was determined, in accordance with FASB ASC Topic 718, by a Monte Carlo simulation performed by an independent third-party.
The table below sets forth the allocation of the grant date fair value of the 20222023 long-term incentive awards (including performance share unit awards and restricted stock unit awards) granted to the named executive officers: | | Name | Name | CFCF PSUs ($) | RTSR PSUs ($) | RSUs ($) | Name | CFCF PSUs ($) | RTSR PSUs ($) | RSUs ($) | | Ryan M. Schneider | Ryan M. Schneider | 2,250,000 | | 1,546,250 | | 2,999,988 | | | Charlotte C. Simonelli | Charlotte C. Simonelli | 450,000 | | 206,158 | | 749,988 | | | Melissa K. McSherry | Melissa K. McSherry | 299,988 | | 137,443 | | 2,599,974 | | | Marilyn J. Wasser | | | Susan E. Yannaccone | Susan E. Yannaccone | 270,000 | | 123,700 | | 450,000 | | | Marilyn J. Wasser | 329,994 | | 151,186 | | 549,990 | |
See "—Grants"Grants of Plan-Based Awards for Fiscal 2022"2023" for additional information. (6)The grant date fair value of the performance share unit awards assuming achievement of the highest level of performance (175% of the target award for the PSU grant based upon the relative total stockholder return metric and 200% of the target award for the PSU grant based upon the Cumulative Free Cash Flow metric) for each of the NEOs is as follows:
| | Name | Name | CFCF PSUs
Maximum Payout ($) | RTSR PSUs
Maximum Payout ($) | Total PSUs
Maximum Payout ($) | Name | CFCF PSUs
Maximum Payout ($) | RTSR PSUs
Maximum Payout ($) | Total PSUs
Maximum Payout ($) | | Ryan M. Schneider | Ryan M. Schneider | 4,500,000 | | 2,705,938 | | 7,205,938 | | | Charlotte C. Simonelli | Charlotte C. Simonelli | 900,000 | | 360,777 | | 1,260,777 | | | Melissa K. McSherry | Melissa K. McSherry | 599,976 | | 240,525 | | 840,501 | | | Marilyn J. Wasser | | | Susan E. Yannaccone | Susan E. Yannaccone | 540,000 | | 216,475 | | 756,475 | | | Marilyn J. Wasser | 659,988 | | 264,576 | | 924,564 | |
See "—Grants"Grants of Plan-Based Awards for Fiscal Year 2022"2023" for additional information. (7)(4)In addition to the 20222023 long-term incentive awards described in footnote (5)(3), on March 1, 2022,February 28, 2023, the Committee awarded special long-term incentive equity awards to Ms. Yannaccone and Ms. McSherry, was granted an make-whole inducement restricted stock unit award in connectionthe form of RSUs that will cliff vest on the third anniversary of the date of grant, with her joining Anywhere, which had a grant date fair value based upon the amountvalues of $18.00 per share, with an aggregate grant date fair value of $2,099,988. See "Make-Whole" Inducement Award to Ms. McSherry in the Compensation Discussion$1.0 million and Analysis for additional information.$0.5 million, respectively.
(8)Represents cash amount earned by Ms. Yannaccone under the Cumulative Free Cash Flow performance cash award granted to her in February 2020 (prior to her promotion to an executive officer role in November 2020). This award was tied to achievement of the same CFCF target for the 2020-2022 performance period described under Achievement Against Performance Metrics and Payouts under the 2020-2022 PSU Award Cycle in the Compensation Discussion and Analysis.
(9)(5)None of our named executive officers is a participant in any defined benefit pension arrangement. None of our named executive officers received above-market or preferential earnings (as these terms are defined by the SEC) on a non-qualified deferred compensation account.
(10)(6)Amounts for 20222023 represent for each named executive officer: 401(k) plan matching contributions (in the amount of $10,980$11,880 for each of Mr. Schneider, Ms. Simonelli, and Ms. Wasser; $7,454 for Ms. McSherry and $5,054Ms. Wasser and $5,712 for Ms. Yannaccone), amounts paid to Ms. Yannaccone for a sales incentive trip and related tax gross-up totaling $4,954, and the value of insurance premiums paid by the Company for supplemental death insurance.
Grants of Plan-Based Awards for Fiscal Year 20222023 The following table sets forth information concerning each grant of an award made in 20222023 to our named executive officers under any plan. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | Award | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2)(3) | All Other Stock Awards: No. of Shares of Stock or Units (#) | All Other Option Awards: No. of Securities Under-lying Options (#) | Exercise or Base Price of Option Awards
($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(5) | Thres-hold
($) | Target
($) | Maxi-mum
($) | Thres-hold
(#) | Target
(#) | Maxi-mum
(#) | | Ryan M. Schneider | EIP(1) | 03/01/22 | 500,000 | | 2,000,000 | | 4,000,000 | | | | | | | | | RTSR(2) | 03/01/22 | | | | 50,000 | | 125,000 | | 218,750 | | | | | 1,546,250 | | CFCF(3) | 03/01/22 | | | | 62,500 | | 125,000 | | 250,000 | | | | | 2,250,000 | | RSU(4) | 03/01/22 | | | | | | | 166,666 | | | | 2,999,988 | | | Charlotte C. Simonelli | EIP(1) | 03/01/22 | 235,096 | | 940,385 | | 1,880,770 | | | | | | | | | RTSR(2) | 03/01/22 | | | | 6,666 | | 16,666 | | 29,166 | | | | | 206,158 | | CFCF(3) | 03/01/22 | | | | 12,500 | | 25,000 | | 50,000 | | | | | 450,000 | | RSU(4) | 03/01/22 | | | | | | | 41,666 | | | | 749,988 | | | Melissa K. McSherry | EIP(1) | 03/01/22 | 157,933 | | 631,731 | | 1,263,462 | | | | | | | | | RTSR(2) | 03/01/22 | | | | 4,444 | | 11,111 | | 19,444 | | | | | 137,443 | | CFCF(3) | 03/01/22 | | | | 8,333 | | 16,666 | | 33,332 | | | | | 299,988 | | RSU(4) | 03/01/22 | | | | | | | 27,777 | | | | 499,986 | | RSU(4) | 03/01/22 | | | | | | | 116,666 | | | | 2,099,988 | | | Susan E. Yannaccone | EIP(1) | 03/01/22 | 161,539 | | 646,154 | | 1,292,308 | | | | | | | | | RTSR(2) | 03/01/22 | | | | 4,000 | | 10,000 | | 17,500 | | | | | 123,700 | | CFCF(3) | 03/01/22 | | | | 7,500 | | 15,000 | | 30,000 | | | | | 270,000 | | RSU(4) | 03/01/22 | | | | | | | 25,000 | | | | 450,000 | | | Marilyn J. Wasser | EIP(1) | 03/01/22 | 150,000 | | 600,000 | | 1,200,000 | | | | | | | | | RTSR(2) | 03/01/22 | | | | 4,889 | | 12,222 | | 21,389 | | | | | 151,186 | | CFCF(3) | 03/01/22 | | | | 9,167 | | 18,333 | | 36,666 | | | | | 329,994 | | RSU(4) | 03/01/22 | | | | | | | 30,555 | | | | 549,990 | |
_______________ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | Award | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)(6) | Estimated Future Payouts Under Equity Incentive Plan Awards(2)(3) | All Other Stock Awards(4)(5): No. of Shares of Stock or Units (#) | All Other Option Awards: No. of Securities Under-lying Options (#) | Exercise or Base Price of Option Awards
($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(7) | Thres-hold
($) | Target
($) | Maxi-mum
($) | Thres-hold
(#) | Target
(#) | Maxi-mum
(#) | | Ryan M. Schneider | EIP(1) | 02/28/23 | 500,000 | | 2,000,000 | | 4,000,000 | | | | | | | | | RTSR(2) | 02/28/23 | | | | 132,642 | | 331,606 | | 580,311 | | | | | 1,067,771 | | CFCF(3) | 02/28/23 | | | | 248,705 | | 497,409 | | 994,818 | | | | | 2,879,998 | | RSU(4) | 02/28/23 | | | | | | | 552,677 | | | | 3,200,000 | | Perfor-mance Cash Award (6) | 11/20/23 | | 5,000,000 | | | | | | | | | | | Charlotte C. Simonelli | EIP(1) | 02/28/23 | 237,500 | | 950,000 | | 1,900,000 | | | | | | | | | RTSR(2) | 02/28/23 | | | | 26,943 | | 67,357 | | 117,875 | | | | | 216,890 | | CFCF(3) | 02/28/23 | | | | 50,518 | | 101,036 | | 202,072 | | | | | 584,998 | | RSU(4) | 02/28/23 | | | | | | | 168,393 | | | | 974,995 | | | Melissa K. McSherry | EIP(1) | 02/28/23 | 187,500 | | 750,000 | | 1,500,000 | | | | | | | | | RTSR(2) | 02/28/23 | | | | 13,817 | | 34,542 | | 60,449 | | | | | 111,225 | | CFCF(3) | 02/28/23 | | | | 25,907 | | 51,813 | | 103,626 | | | | | 299,997 | | RSU(4) | 02/28/23 | | | | | | | 86,355 | | | | 499,995 | | RSU(5) | 02/28/23 | | | | | | | 86,355 | | | | 499,995 | | | Marilyn J. Wasser | EIP(1) | 02/28/23 | 150,000 | | 600,000 | | 1,200,000 | | | | | | | | | RTSR(2) | 02/28/23 | | | | 19,758 | | 49,395 | | 86,441 | | | | | 159,052 | | CFCF(3) | 02/28/23 | | | | 37,047 | | 74,093 | | 148,186 | | | | | 428,998 | | RSU(4) | 02/28/23 | | | | | | | 123,488 | | | | 714,996 | | | Susan E. Yannaccone | EIP(1) | 02/28/23 | 187,500 | | 750,000 | | 1,500,000 | | | | | | | | | RTSR(2) | 02/28/23 | | | | 20,725 | | 51,813 | | 90,673 | | | | | 166,838 | | CFCF(3) | 02/28/23 | | | | 38,860 | | 77,720 | | 155,440 | | | | | 449,999 | | RSU(4) | 02/28/23 | | | | | | | 129,533 | | | | 749,996 | | RSU(5) | 02/28/23 | | | | | | | 172,711 | | | | 999,997 | |
(1)The non-equity incentive plan awards represent grants made under the 20222023 Executive Incentive Plan, or EIP. The performance criteria underEIP is funded based on achievement of the EIP for each named executive officer was 2022 Plan Operating EBITDA. Fundingfollowing goals (x) 70% based onupon achievement of Plan Operating EBITDA could rangeand (y) 30% based upon achievement of the following strategic performance objectives: Operational Excellence; Relentless Focus on Talent; and Consumer Experience. Funding of the financial metric ranges from 25% for threshold performance to maximum fundingachievement at 200%. while funding of the strategic performance objectives ranges from 0% to 200% of achievement. Each named executive officer's potential award was subject to decrease or increase based on his or her Relative Individual Performance, - provided that the aggregate value of awards under the EIP could notcannot exceed the funding level achieved (e.g., any increase in a participant's award must result in a decrease in another participant's award). The target incentive award payable to our named executive officers in 20222023 was 100% of their respective earned salaries, or in the case of Mr. Schneider, 200% of earned salary. (2)The relative total stockholder return performance share unit awardRepresents the RTSR PSUs granted to each NEO under this column for each named executive officer representsthe LTI Plan and the potential threshold, target and maximum number of shares that may be earned (40%, 100% and 175% of target). Vesting of the RTSR performance share unitPSU award is contingent upon achievement of the following metric: Anywhere's total stockholder return relative to the S&P MidCap 400 index ("RTSR") for the three-year performance period ending December 31, 2024.2025. Payouts under the RTSR metric will be based upon the extent to which Anywhere's total stockholder return for the three-year period performs relative to the S&P MidCap 400 index total stockholder return. The actual number of performance share units earned pursuant to this award will be
determined and paid following the completion of the three-year performance period based on our actual performance against the performance goals established at the time of grant, as adjusted. Performance share units, if earned, convert to our common stock on a one-for-one basis. See "CD&A—Long-Term Incentive—Performance Share Units—Relative Total Stockholder Return" for a further discussion. (3)Represents the CFCF PSUs granted to each NEO under the LTI Plan and the potential threshold, target and maximum number of shares that may be earned under a performance share unit award (50%, 100% and 200% of target). Vesting of the CFCF PSU award is contingent upon achievement of the Cumulative Free Cash Flow goal for the three-year performance period ending December 31, 2025. The actual number of performance share units earned pursuant to this award will be determined and paid following the completion of the three-year performance period based on our actual performance against the performance goals established at the time of grant, as adjusted. Performance share units, if earned, convert to our common stock on a one-for-one basis. See —Compensation Discussion and Analysis—Long-Term Incentive—Performance Share Units—Relative Total Stockholder Return for a further discussion.
(3)The Cumulative Free Cash Flow ("CFCF") performance share unit award under this column for each named executive officer represents the potential threshold, target and maximum number of shares that may be earned under a performance share unit award (50%, 100% and 200% of target). Vesting of the CFCF performance share unit award is contingent upon achievement of the Cumulative Free Cash Flow goal for the three-year performance period ending December 31, 2024. The actual number of performance share units earned pursuant to this award will be determined and paid following the completion of the three-year performance period based on our actual performance against the performance goals established at the time of grant, as adjusted. Performance share units, if earned, convert to our common stock on a one-for-one basis. See "—Compensation Discussion and Analysis—"CD&A—Long-Term Incentive—Performance Share Units—Cumulative Free Cash Flow"Flow" for a further discussion.
(4)Consists of a restricted stock unit award that vests in three equal annual installments on March 1February 28 of each of 2023, 2024, 2025 and 2025.2026. (5)Consists of a restricted stock unit award that will cliff vest on the third anniversary of the date of grant. (6)Represents the first tranche of the CEO Cash Performance Incentive Award granted in November 2023 to Mr. Schneider, which is based upon the achievement of a pre-established level of realized cost savings for the year ending December 31, 2024. The second $5 million tranche will not be considered 'granted' for financial reporting purposes until the Committee establishes a metric for the one-year performance period ending December 31, 2025, which establishment is expected in February 2025. See "CD&A—Summary of CEO 2023 Compensation—2023 Payouts and Exceptional Achievements Cash Award" for more information. (7)Represents the grant date fair value computed in accordance with FASB ASC Topic 718. The assumptions we used in determining the grant date fair value of these awards are described in Note 13, "Stock-Based Compensation" to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.2023. Outstanding Equity Awards at 20222023 Fiscal Year-End The following table sets forth outstanding equity awards as of December 31, 20222023 held by our named executive officers. | | Name | Name | Option Awards | Stock Awards | Name | Option Awards | Stock Awards | | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price
($) | Option Expiration Date(1) | Number of Shares of Stock That Have Not Vested
(#) | Market Value of Shares of Stock That Have Not Vested ($)(10) | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#)(10) | Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested ($)(10) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price
($) | Option Expiration Date(1) | Number of Shares of Stock That Have Not Vested
(#) | Market Value of Shares of Stock That Have Not Vested ($)(10) | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested ($)(10) | | Ryan M. Schneider | Ryan M. Schneider | | 103,093 | (2) | 658,764 | | | | | 141,844 | (3) | 906,383 | | | | | 166,666 | (4) | 1,064,996 | | | | | | | 319,148 | (5) | 2,039,356 | | | | 63,830 | (6) | 407,874 | | | | 125,000 | (7) | 798,750 | | | | 50,000 | (8) | 319,500 | | 261,234 | — | 32.80 | 10/23/2027 | | | | | | | 210,674 | — | 25.35 | 03/01/2028 | | | | | | | 325,144 | 108,382 | 13.60 | 02/28/2029 | | | | | | Ryan M. Schneider | | | | | | | | 62,500 | | (6) | (6) | 506,875 | | | | | | | | 50,000 | | | (7) | 405,500 | | | | | | | | 994,818 | | | (8) | 8,067,974 | | | | | | | | 331,606 | | | (9) | 2,689,325 | | 261,234 | | | 210,674 | | | 210,674 | | | 210,674 | | | 433,526 | | | 433,526 | | | 433,526 | | | Charlotte C. Simonelli | Charlotte C. Simonelli | | 20,619 | (2) | 131,755 | | | | | 31,915 | (3) | 203,937 | | | | | 41,666 | (4) | 266,246 | | | | | | | 57,446 | (5) | 367,080 | | | | 7,660 | (6) | 48,947 | | | | 25,000 | (7) | 159,750 | | | | 6,667 | (8) | 42,602 | | 58,928 | 19,643 | 11.79 | 3/25/2029 | | | | | | | Melissa K. McSherry | | 116,666 | (4) | 745,496 | | | | | 27,777 | (4) | 177,495 | | | | | | | 16,666 | (7) | 106,496 | | | | 4,445 | (8) | 28,404 | | Susan E. Yannaccone | | 3,437 | (2) | 21,962 | | | | | 14,184 | (3) | 90,636 | | | | | 25,000 | (4) | 159,750 | | | | | | | 25,530 | (5) | 163,137 | | | | 3,404 | (6) | 21,752 | | | | 15,000 | (7) | 95,850 | | | | 4,000 | (8) | 25,560 | | | | | 168,393 | | | | | | | | | 12,500 | | | | | | | | | 12,500 | | | | | | | | | 12,500 | | | (6) | 101,375 | | | | | | | | 6,667 | | | | | | | | | 6,667 | | (7) | 54,069 | | | | | | | | 202,072 | | | | | | | | | 202,072 | | (8) | 1,638,804 | | | | | | | | 67,357 | | | | | | | | | 67,357 | | (9) | 546,265 | | 78,571 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | Option Awards | Stock Awards | | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price
($) | Option Expiration Date(1) | Number of Shares of Stock That Have Not Vested
(#) | Market Value of Shares of Stock That Have Not Vested ($)(10) | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#)(10) | Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested ($)(10) | | | | | | 18,901 | (2) | 120,777 | | | | | Marilyn J. Wasser | | | | | 26,005 | (3) | 166,172 | | | | | | | | 30,555 | (4) | 195,246 | | | | | | | | | | | 46,808 | (5) | 299,103 | | | | | | | | 6,241 | (6) | 39,880 | | | | | | | | 18,333 | (7) | 117,148 | | | | | | | | 4,889 | (8) | 31,241 | | 8,082 | — | 47.49 | 02/27/2024 | | | | | | | | 13,574 | — | 46.47 | 02/26/2025 | | | | | | | | 21,877 | — | 32.63 | 02/26/2026 | | | | | | | | 32,500 | — | 27.70 | 02/28/2027 | | | | | | | | 36,516 | — | 25.35 | 03/01/2028 | | | | | | | | 56,358 | 18,786 | 13.60 | 02/28/2029 | | | | | | |
_______________ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | Option Awards | Stock Awards | | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price
($) | Option Expiration Date(1) | Number of Shares of Stock That Have Not Vested
(#) | Market Value of Shares of Stock That Have Not Vested ($)(10) | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested ($)(10) | | Melissa K. McSherry | | | | | 77,778 | | (3) | 630,780 | | | | | | | | 18,518 | | (3) | 150,181 | | | | | | | | 86,355 | | (4) | 700,339 | | | | | | | | 86,355 | | (5) | 700,339 | | | | | | | | | | | 8,333 | | (6) | 67,581 | | | | | | | | 4,445 | | (7) | 36,049 | | | | | | | | 103,626 | | (8) | 840,407 | | | | | | | | 34,542 | | (9) | 280,136 | Marilyn J. Wasser | | | | | 13,003 | | (2) | 105,454 | | | | | | | | 20,370 | | (3) | 165,201 | | | | | | | | 123,488 | | (4) | 1,001,488 | | | | | | | | | | | 9,167 | | (6) | 74,344 | | | | | | | | 4,889 | | (7) | 39,650 | | | | | | | | 148,186 | | (8) | 1,201,788 | | | | | | | | 49,395 | | (9) | 400,593 | | 8,082 | — | 47.49 | 02/27/24 | | | | | | | | 13,574 | — | 46.47 | 02/26/25 | | | | | | | | 21,877 | — | 32.63 | 02/26/26 | | | | | | | | 32,500 | — | 27.70 | 02/28/27 | | | | | | | | 36,516 | — | 25.35 | 03/01/28 | | | | | | | | 75,144 | — | 13.60 | 02/28/29 | | | | | | | | Susan E. Yannaccone | | | | | 7,092 | | (2) | 57,516 | | | | | | | | 16,667 | | (3) | 135,169 | | | | | | | | 129,533 | | (4) | 1,050,513 | | | | | | | | 172,711 | | (5) | 1,400,686 | | | | | | | | | | | 7,500 | | (6) | 60,825 | | | | | | | | 4,000 | | (7) | 32,440 | | | | | | | | 155,440 | | (8) | 1,260,618 | | | | | | | | 51,813 | | (9) | 420,203 |
(1)Options with an expiration date of February 28, 2029 and March 25, 2029 become exercisable as to twenty-five percent (25%) of the total shares subject to the option on each of the first four anniversaries of their respective dates of grant (February 28, 2019 and March 25, 2019, respectively).are all exercisable. (2)Represents the unvested shares under a 20202021 restricted stock unit award, which vest at the rate of one-third of the number of shares granted on each of the first three anniversaries from the date of grant (February 27, 2020), except with respect to Ms. Yannaccone. For Ms. Yannaccone, represents a cash-settled restricted stock unit award, which vests at the rate of one-third the number of units underlying the award on each of the first three anniversaries from the date of grant (February 27, 2020) and, upon vesting, is settled in cash, with the amount of such cash payment based on the 20-day average fair market value of our common stock. (3)Represents unvested shares under a 2021 restricted stock unit award that vests at the rate of one-third of the number of shares on each of the first three anniversaries of the date of grant (February 25, 2021).
(4)(3)Represents unvested shares under a 2022 restricted stock unit award that vests at the rate of one-third of the number of shares granted on each of the first three anniversaries of the date of grant (March 1, 2022).
(5)(4)Represents unvested shares under a 2021 grant of performance share units2023 restricted stock unit award that vests followingat the conclusionrate of a three-year performance period ending on December 31, 2023 based uponone-third of the generation of Cumulative Free Cash Flow as measured against the pre-established performance goals. The award would have paid out above the target level based upon performance as of December 31, 2022 and accordingly the shares represent the maximum number of shares granted on each of the first three anniversaries of the date of grant (February 28, 2023).
(5)Represents unvested shares under a 2023 special off-cycle RSU award that may be earned under such award (i.e., 200%will cliff vest on the third anniversary of target, with no higher performance level)the date of grant (February 28, 2023). (6)Represents a 2021 grant of performance share units that vests following the conclusion of a three-year performance period ending on December 31, 2023 based upon Anywhere's total stockholder return relative to the S&P MidCap 400 index. The award would have paid out below the threshold level based upon performance as of December 31, 2022 and accordingly the shares represent the threshold number of shares that may be earned under such award (i.e., 40% of target, with the next highest performance level 100% of target). (7)Represents a 2022 grant of performance share units that vests following the conclusion of a three-year performance period ending on December 31, 2024 based upon the generation of Cumulative Free Cash Flow as measured against the pre-established performance goals. The award would have paid out below the targetthreshold level based upon performance as of December 31, 20222023 and accordingly the shares represent the targetthreshold number of shares that may be earned under such award (i.e.,100%, 50% of target with the next highest performance level 200%100% of target).
(8)(7)Represents a 2022 grant of performance share units that vests following the conclusion of a three-year performance period ending on December 31, 2024, based upon Anywhere's total stockholder return relative to the S&P MidCap 400 index. The award would have paid out below the threshold level based upon performance as of December 31, 20222023, and accordingly the shares represent the threshold number of shares that may be earned under such award (i.e., 40% of target, with the next highest performance level 100% of target).
(8)Represents a 2023 grant of performance share units that vests following the conclusion of a three-year performance period ending on December 31, 2025, based upon the generation of Cumulative Free Cash Flow as measured against the pre-established performance goals. The award would have paid out at the target level based upon performance as of December 31, 2023, and accordingly the shares represent the maximum number of shares that may be earned under such award (i.e., 200% of target with no higher performance level). (9)Represents a 2023 grant of performance share units that vests following the conclusion of a three-year performance period ending on December 31, 2025, based upon Anywhere's total stockholder return relative to the S&P MidCap 400 index. The award would have paid out below the target level based upon performance as of December 31, 2023, and accordingly the shares represent the target number of shares that may be earned under such award (i.e., 100% of target, with the next highest performance level 175% of target). (10)Calculated using the closing price of our common stock on the NYSE on December 30, 202229, 2023, of $6.39$8.11 per share.
Option Exercises and Stock Vested for Fiscal Year 20222023 No options were exercised by any named executive officer in 2023. The following table sets forth information with respect to the vesting of restricted stock units and performance stock units and the exercise of stock options for each of our named executive officers during 2022.2023. | | | | | | | | | | | | | | | | Name | Option Awards (1) | Stock Awards(2) | Number of shares acquired on exercise
(#) | Value realized on Exercise
($) | Number of shares acquired on vesting
(#) | Value realized on vesting
($) | | Ryan M. Schneider | — | — | 676,178 | | 6,835,527 | | | Charlotte C. Simonelli | — | — | 149,626 | | 1,758,727 | | | Susan E. Yannaccone | — | — | 15,948 | | 287,236 | | | Marilyn J. Wasser | 25,000 | | 26,228 | | 109,888 | | 1,197,806 | |
_______________ | | | | | | | | | | Name | Stock Awards(1) | Number of shares acquired on vesting
(#) | Value realized on vesting
($) | | Ryan M. Schneider | 352,442 | | 2,362,634 | | | Charlotte C. Simonelli | 72,581 | | 479,272 | | | Melissa K. McSherry | 48,147 | | 272,512 | | | Marilyn J. Wasser | 60,110 | | 396,618 | | | Susan E. Yannaccone | 28,692 | | 198,589 | |
(1)The shares acquired upon exercise relate to an option award granted in April 2012 with an exercise price of $17.50. The value realized upon exercise of the option award is determined using the difference between the market price of the Company's stock at exercise and the exercise price of the option award. (2)The shares acquired upon vesting and the value realized upon vesting, are as follows:
| | | | | | | | | | | | | | | | | | | Name | Vesting Date | | Number of shares acquired on Vesting Before Tax Withholding (#)(a)(b) | Closing Price Per Share
($) | Value realized on Vesting ($)(c) | | Ryan M. Schneider | 2/25/2022 | (d) | 103,093 | | 18.25 | 1,881,447 | | | 2/25/2022 | (e) | 70,921 | | 18.25 | 1,294,308 | | | 2/28/2022 | (f) | 38,248 | | 18.18 | 695,349 | | | 12/31/2022 | (h) | 463,916 | | 6.39 | 2,964,423 | | | 12/31/2022 | (i) | — | | 6.39 | — | | | Total | | 676,178 | | | 6,835,527 | | | Charlotte C. Simonelli | 2/25/2022 | (d) | 20,618 | | 18.25 | 376,279 | | | 2/25/2022 | (e) | 15,957 | | 18.25 | 291,215 | | | 3/25/2022 | (g) | 9,634 | | 15.89 | 153,084 | | | 3/25/2022 | (g) | 29,191 | | 15.89 | 463,845 | | | 12/31/2022 | (h) | 74,226 | | 6.39 | 474,304 | | | 12/31/2022 | (i) | — | | 6.39 | — | | | Total | | 149,626 | | | 1,758,727 | | | Susan E. Yannaccone | 2/25/2022 | (d) | 3,436 | | 17.25 | 59,271 | | | 2/25/2022 | (e) | 7,092 | | 18.25 | 129,429 | | | 2/28/2022 | (f) | 5,420 | | 18.18 | 98,536 | | | Total | | 15,948 | | | 287,236 | | | Marilyn J. Wasser | 2/25/2022 | (d) | 18,900 | | 18.25 | 344,925 | | | 2/25/2022 | (e) | 13,002 | | 18.25 | 237,287 | | | 2/28/2022 | (f) | 9,946 | | 18.18 | 180,818 | | | 12/31/2022 | (h) | 68,040 | | 6.39 | 434,776 | | | 12/31/2022 | (i) | — | | 6.39 | — | | | Total | | 109,888 | | | 1,197,806 | |
| | | | | | | | | | | | | | | | | | | Name | Vesting Date | Number of shares acquired on Vesting Before Tax Withholding (#)(a) | Closing Price Per Share
($) | Value realized on Vesting ($)(b) | | Ryan M. Schneider | 02/27/23 | (c) | 103,093 | | 5.95 | 613,403 | | | 02/24/23 | (d) | 70,922 | | 6.18 | 438,298 | | | 03/01/23 | (e) | 55,555 | | 5.66 | 314,441 | | | 12/31/23 | (f) | 122,872 | | 8.11 | 996,492 | | | 12/31/23 | (g) | — | | 8.11 | — | | | Total | 352,442 | | | 2,362,634 | | | Charlotte C. Simonelli | 02/27/23 | (c) | 20,619 | | 5.95 | 122,683 | | | 02/24/23 | (d) | 15,957 | | 6.18 | 98,614 | | | 03/01/23 | (e) | 13,888 | | 5.66 | 78,606 | | | 12/31/23 | (f) | 22,117 | | 8.11 | 179,369 | | | 12/31/23 | (g) | — | | 8.11 | — | | | Total | 72,581 | | | 479,272 | |
| | | | | | | | | | | | | | | | | | | Name | Vesting Date | Number of shares acquired on Vesting Before Tax Withholding (#)(a) | Closing Price Per Share
($) | Value realized on Vesting ($)(b) | | Melissa K. McSherry | 03/01/23 | (e) | 9,259 | | 5.66 | 52,406 | | | 03/01/23 | (e) | 38,888 | | 5.66 | 220,106 | | | Total | 48,147 | | | 272,512 | | | Marilyn J. Wasser | 02/27/23 | (c) | 18,901 | | 5.95 | 112,461 | | | 02/24/23 | (d) | 13,002 | | 6.18 | 80,352 | | | 03/01/23 | (e) | 10,185 | | 5.66 | 57,647 | | | 12/31/23 | (f) | 18,022 | | 8.11 | 146,158 | | | 12/31/23 | (g) | — | | 8.11 | — | | | Total | 60,110 | | | 396,618 | | | Susan E. Yannaccone | 02/27/23 | (c) | 3,437 | | 8.11 | 27,874 | | | 02/24/23 | (d) | 7,092 | | 6.18 | 43,829 | | | 03/01/23 | (e) | 8,333 | | 5.66 | 47,165 | | | 12/31/23 | (f) | 9,830 | | 8.11 | 79,721 | | | 12/31/23 | (g) | — | | 8.11 | — | | | Total | 28,692 | | | 198,589 | |
(a)A portion of the shares that vested was withheld by the Company to pay minimum withholding taxes dues upon issuance. Accordingly, the named executive officers received fewer shares than the amounts set forth in the table. (b)The amounts reported include dividend equivalents accrued and earned on restricted stock units and performance share units to the extent granted prior to the discontinuation of our quarterly cash dividend in the fourth quarter of 2019.
(c)Calculated based upon the closing price per share on the vesting date multiplied by the number of shares acquired on vesting before tax withholding.
(d)Shares received upon the second annual vesting of the restricted stock unit award granted in February 2020, except with respect to Ms. Yannaccone. For Ms. Yannaccone, represents cash received upon the settlement of a portion of a cash-settled restricted stock unit award, based on the 20-day average fair market value of our common stock.
(e)Shares received upon the first annual vesting of the restricted stock unit award granted in February 2021.
(f)Shares received upon the third annual vesting of a restricted stock unit award granted in February 2019.
(g)(c)Shares received upon the third annual vesting of restricted stock unit awards granted in March 2019.February 2020, with the exception of Ms. Yannaccone who received cash upon vesting of her award pursuant to the terms of her award, which was granted prior to her becoming an executive officer.
(h)(d)Shares received upon the 200%second annual vesting of restricted stock unit awards granted in February 2021.
(e)Shares received upon the first annual vesting of restricted stock unit awards granted in March 2022. (f)Shares received upon the 77% payout under the 20202021 to 20222023 performance share unit grant that was based upon achievement of a Cumulative Free Cash Flow metric over the three-year period ended December 31, 2022.2023. The number of shares reported for the performance share unit award represents the actual number of shares issued to the participant in February 2023,2024, but the value realized is the closing market price of a share of our common stock on December 30, 2022.29, 2023. The actual value realized may vary depending on the closing market price of a share of our common stock on the payout date. (i)(g)No payout was earned under the 20202021 to 20222023 performance share unit grant that was based upon achievement of a Relative Total Stockholder Return metric over the three-year period ended December 31, 2022.2023.
Non-Qualified Deferred Compensation at 20222023 Fiscal Year End On December 15, 2017, the Compensation and Talent Management Committee froze participation in the Amended and Restated Anywhere Real Estate Group LLC Executive Deferred Compensation Plan (the "DCP"). As a result of the Compensation and Talent Management Committee's action, only DCP accounts existing on or prior to January 1, 2017, were permitted to continue, but no further compensation deferrals were allowed under the DCP. The DCP, originally approved by the Board of Managers of Anywhere Group on April 9, 2013, amended and restated the AnywhereRealogy Corporation Officer Deferred Compensation Plan, as previously amended, participation in which had been frozen since January 1, 2009, and also unfroze participation in the DCP. The DCP was for the benefit of certain of our key employees selected by our Compensation and Talent Management Committee from time to time. Under the DCP, participants were permitted to defer both cash and
equity-based compensation on such terms as our Compensation and Talent Management Committee determined from time to time. For equity deferrals, the vesting terms of deferred awards remained unchanged, though the distribution of shares issuable upon vesting of the applicable award was deferred pursuant to the NEO's deferral election. Deferred equity awards were exchanged for deferred stock units on a one-for-one basis. Dividend equivalent units accrue on deferred stock units if the underlying award agreement provided for the accrual of dividend equivalent units. For cash deferrals, we utilize a "rabbi trust" for the purpose of holding assets to be used for the payment of benefits under the DCP. Accounts are established in a participant's name and the participant allocated his or her cash deferrals to one or more deemed investments under the DCP. Generally, a participant's deferral will be paid on a fixed date elected by the participant or, if earlier, on the first anniversary following a participant's separation from service for elections made prior to December 11, 2014, or on the last business day of the quarter following a participant's separation of service for elections made on or after December 11, 2014. A participant in the DCP could elect to receive his or her account balance in a single lump-sum payment or elect to receive installment payments over time. Ms. Wasser and Ms. Yannaccone are the only NEOs who had a DCP account in 2022.2023. Ms. Wasser's account is comprised of deferred stock units related to deferred restricted stock unit and performance stock unit awards as well as deferred cash. Ms. Yannaccone's account is comprised of deferred stock units related to a deferred restricted stock unit award. The following table sets forth certain information with respect to DCP accounts of Ms. Wasser and Ms. Yannaccone for 2022:2023: | | | | | | | | | | | | | | | | | | Name(1) | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($)(2) | Aggregate Withdrawals/Distributions ($) | Aggregate Balance at Last FYE ($)(3) | | Marilyn Wasser | — | | — | | (205,104) | | — | | 465,781 | | | Susan Yannaccone | — | | — | | (27,655) | | — | | 16,959 | |
_______________ | | | | | | | | | | | | | | | | | | Name(1) | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($)(2) | Aggregate Withdrawals/Distributions ($) | Aggregate Balance at Last FYE ($)(3) | | Marilyn Wasser | — | | — | | 95,390 | | — | | 561,171 | | | Susan Yannaccone | — | | — | | 4,565 | | — | | 21,524 | |
(1)None of the amounts reported in the table were previously reported as compensation in the Summary Compensation Table. (2)Reflects the decreaseincrease in the value of deferred stock units and, for Ms. Wasser, lossesgains on cash deferrals. (3)The amount reported is the value of deferred stock units in each executive's DCP account based upon the closing price of our common stock on December 30, 202229, 2023, and, for Ms. Wasser, the value of cash deferrals in her DCP account .account. Agreements with Named Executive Officers The following summarizes our employment agreement with Mr. Schneider and the executive severance arrangements in place as of December 31, 20222023, with each of our other NEOs. Employment & Severance Arrangements. The terms of the amended and restated employment agreement between the Company and Mr. Schneider entered into on August 4, 2022, (the "CEO Agreement"), are generally consistent with the executive severance and change in control provisions reflected in Anywhere's Executive Severance Plan and Executive Change in Control Plan (together, the "Severance & CIC Plans"). Each of our other named executive officersNEOs were participants in the Severance & CIC Plans as of December 31, 20222023, and have a separate letter agreement with the Company concerning material terms of his or her employment. We refer to the CEO Agreement and the Severance & CIC Plans collectively in this section as the "NEO Agreements." The material terms and conditions of the NEO Agreements are summarized below. Term. Under the NEO Agreements, each NEO's employment with us is at will, including that of the CEO, and may be terminated at any time in accordance with the terms of the respective agreement.
The Committee, as Plan Administrator of the Severance & CIC Plans, may terminate, amend or modify such Severance & CIC Plans at any time, provided that, except as required by law, the Severance & CIC Plans may not be amended or terminated within six months prior to a change in control (as defined in the Severance & CIC Plans) or on or within two years immediately following a change in control in a manner that would adversely affect the rights of a participant without the express written consent of the participant so affected. Annual Compensation. Each NEO’s annual base salary and target annual incentive award under the Executive Incentive Plan as of December 31, 20222023, is set forth in the CD&A and is subject to increase in the Committee's discretion. Each NEO may be eligible for long-term incentive awards as determined by the Compensation and Talent Management Committee in its sole discretion. Non-Change-in-Control Severance. If the NEO experiences a “qualifying termination” (as described below), we will provide such NEO with the following severance payments and benefits, subject to continued compliance with their restrictive covenants and the execution and non-revocation of a release of claims: ▪an amount equal to 1.0 times (or with respect to Mr. Schneider, 2.0 times) the sum of the NEO's annual base salary and annual incentive award at target, payable in bi-weekly or monthly installments; ▪the continuation of medical and dental benefits on terms no less favorable to the NEO than those terms in effect immediately prior to the termination of employment for a period of up to 18 months; and ▪outplacement services for a period of up to twelve months, the value of such services not to exceed $50,000. Change-in-Control Severance. If the NEO experiences a "qualifying termination" within 24 months following a change in control of the Company, we will provide such NEO with the same benefits described in the prior section (("Non-Change-in-Control Severance"Non-Change-in-Control Severance)), subject to their continued compliance with their restrictive covenants and the execution and non-revocation of a release of claims, except that each NEO will be entitled to a severance amount equal to 2.0 times the sum of their base salary and annual incentive award at target, payable in lump sum. The NEO Agreements also provide that if an NEO experiences a qualifying termination prior to a change in control (but, only if a change in control occurs) and such termination is determined to be in connection with or in anticipation of a change in control or is at the request or direction of a person who has entered into an agreement with the Company, the consummation of which would constitute a change in control, the Company will provide the NEO with change in control severance payments (i.e., 2.0 times
the sum of the NEO's annual base salary and target annual incentive award) rather than standard severance benefits (i.e., 1.0 the sum of annual base salary and target annual incentive award). Pro-Rata Annual Incentive Award. Upon a qualifying termination, the NEOs will also receive a pro-rata annual incentive award in respect of the fiscal year in which their termination of employment occurs, determined based on the Company’s actual performance and payable at such time such awards are payable to other employees of the Company. Qualifying Termination. A “qualifying termination” means the NEO's employment is terminated by the Company without cause or the NEO resigns with good reason. Payments and Benefits Upon a Termination due to Death, Disability or Retirement. Under the NEO Agreements, upon a termination of employment due to death or disability or retirement, the NEO will be eligible to receive accrued compensation and a pro-rated annual incentive award. In the case of death, the NEO will also be eligible to receive a supplemental death insurance benefit in the amount of 2.5 times their annual base salary on the date of death up to $2 million (inclusive of any Company provided life insurance to the NEO), provided that such NEO has qualified for such benefit. There is no severance payable upon any termination due to death or disability or retirement nor is there severance payable upon a termination at or after the expiration of the term of the NEO Agreements. Section 280G. The NEO Agreements provide that if payments and benefits provided to the NEO would constitute an “excess parachute payment” for purposes of Section 280G of the tax code, the NEO will either have their payments and benefits reduced to the highest amount that could be paid without triggering Section 280G or receive the after-taxafter-
tax amount of their payment and benefits, whichever results in the greater after-tax benefit, taking into account the excise tax imposed under Section 4999 of the tax code and any applicable federal, state and local taxes. Restrictive Covenants and Clawback. Under the NEO Agreements, each NEO is subject to a non-compete period which is three years for Mr. Schneider and two years for each other NEO, in each case, following the NEO's termination of employment for any reason, and a non-solicitation period of three years following the NEO's termination of employment for any reason. The Company’s Clawback Policy applies in the event the NEO breaches his or her restrictive covenants under the NEO Agreement. Definitions under the NEO Agreements. Cause. Cause is defined in the NEO Agreements as (i) the NEO's willful failure to substantially perform his or her duties as an employee of the Company or any subsidiary (other than any such failure resulting from incapacity due to physical or mental illness), (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or any subsidiary, (iii) the NEO's conviction of, or plea of guilty or nolo contendere to a charge of commission of, a felony or crime involving moral turpitude, (iv) the NEO's indictment for a charge of commission of a felony or any crime involving moral turpitude, (v) the NEO's gross negligence in the performance of his or her duties, (vi) the NEO purposefully or negligently makes (or has been found to have made) a false certification to the Company pertaining to its financial statements, (vii) the NEO's habitual use of drugs or habitual, excessive use of alcohol to the extent that any of such uses in the Board’s good faith determination materially interferes with the performance of the NEO's duties, (viii) the NEO's breach of fiduciary duty and/or (ix) a material breach by the NEO of any of the terms and conditions of the NEO Agreement or a material breach of any of the NEO's representations in the NEO Agreement. A termination will not be for “Cause” pursuant to clause (i), (ii), (v) or (ix), unless the Company shall have notified the NEO in writing describing such conduct, to the extent such conduct is curable, and the NEO has failed to cure such conduct within ten business days after his or her receipt of such written notice. Good Reason. Good Reason is defined in the CEO Agreement as voluntary resignation after any of the following actions taken by the Company or any of its subsidiaries without the CEO's consent: (i) his removal from, or failure to be nominated or re-elected to, the Board; (ii) a material reduction of his duties and responsibilities to the Company or his title or position or reporting (other than any such failure resulting from incapacity due to physical or mental illness), (iii) a reduction in base salary or target annual incentive award opportunity (not including any diminution in base salary permitted under the CEO Agreement); (iv) relocation of his primary office to a location more than a pre-established distance from the prior location following a change in control of the Company if his commute increases as a result of such relocation or (v) a material breach by the Company of a material provision of the CEO Agreement. The definition of Good Reason under the Severance & CIC Plans is substantially similar to that under the CEO Agreement except for the following material differences:
▪clause (i) of the definition of Good Reason under the CEO Agreement regarding Director service is not contained in the definition of Good Reason in the Severance & CIC Plans; and ▪the definition of Good Reason under the Severance & CIC Plans excludes a reduction in an NEO's EIP target as giving rise to a "good reason" termination. Retirement. Retirement is any separation of service of an executive who is retirement eligible (other than a termination for Cause or a termination in connection with a change in control). Retirement eligibility is defined under the NEO Agreements as 65 years of age or older, or 55 years of age or older plus at least ten years of tenure with the Company.
Summary of Post-Termination Grant Vesting/Exercise Rules by Type of Award to NEOs The following table sets forth the consequences of a NEO's termination of employment on outstanding equity awards. Any post-termination vesting and post-termination right to exercise options are subject to the NEO's compliance with any applicable restrictive covenants. | | | | | | | | | | | | Termination Reason(1) | Performance Share Units(2)(3) | RSUs(3) | Options | | Voluntary other than for the reasons listed below | Immediate forfeiture | Immediate forfeiture of unvested RSUs | 60 days to exercise options that had vested as of date of termination;
Immediate forfeiture of unvested shares | | For Cause | Immediate forfeiture | Immediate forfeiture of unvested RSUs | Immediate forfeiture of all options, vested or unvested | | Death or Disability | Performance Share Units will vest according to actual performance pro-rated for time worked during three-year performance period; payment made following end of three-year performance period | Immediate vesting of unvested RSUs (whether or not earned) upon termination date | Immediate vesting of unvested options, and options may be exercised until the earlier of the grant expiration date or 180 days post-termination | | Retirement | If holder remains employed or provides service to the Company for at least one year after the start of the performance period, Performance Share Units will vest according to actual performance; payment made following end of three-year performance period | If holder remains employed or provides service to the Company for at least one year following the date of grant, shares underlying the RSUs will continue be issued following retirement in accordance with schedule set forth in the Notice of Grant | If optionee remains employed or provides service to the Company for at least one year following the date of grant, options will continue to vest following retirement in accordance with schedule set forth in the Notice of Grant and optionee will be able to exercise options post-termination to the date that is three years after the final vesting date, but in no event after the grant expiration date | | By the Company without Cause or by the NEO for Good Reason | Performance Share Units will vest according to actual performance pro-rated for time worked during performance period; payment made following end of three-year performance period | Immediate forfeiture of unvested RSUs | 90 days to exercise options that had vested as of termination;
Immediate forfeiture of unvested options | | Change in Control with Shares Assumed | Performance Share Units converted at target value into time vested units at date of Change in Control. Units will vest in full if employment or service is terminated during the balance of the performance (vesting) period if terminated by Company without Cause or if employment is terminated by holder for Good Reason, due to retirement or if employment is terminated on account of death or disability. | RSUs will vest in full if employment or service is terminated within 24 months by Company without Cause or if employment is terminated by holder for Good Reason | Options will vest in full if employment or service is terminated within 24 months by Company without Cause or if employment is terminated by optionee for Good Reason | | Change in Control with Shares not Assumed | Performance Share Units vest in full at target value and are paid in cash upon Change in Control | RSUs will vest in full; holder receives cash value of shares. | Option will vest in full; optionee receives spread value |
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(1) Capitalized terms are defined in the NEO equity award agreements and the Second Amended & Restated 2018 Long-Term Incentive Plan (or prior plan).
(2)Rules apply to terminations prior to end of performance period. (3) The cash-based Market Share Performance Award (CEO only) follows the same rules as PSUs.(4) The restricted cash award and the cash-settled restricted stock unit award granted to Ms. Yannaccone in February 2020 prior to her promotion to an executive role each follow the same rules as the RSUs.
Potential Payments Upon Termination or Change-in-Control The payments that may be made to our named executive officers are described in the section of this proxy statement captioned Agreements with Named Executive Officers and Summary of Post-Termination Grant Vesting/Exercise Rules by Type of Award to NEOs. The table below sets forth information regarding the value of potential termination payments and benefits our named executive officers would have become entitled to receive upon a change of control and/or termination of employment on December 31, 2022.2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Benefit(1)(2) | | Termination without Cause or for Good Reason in connection with a Change of Control ($)(3) | | Other Termination without Cause or for Good Reason ($)(4) | | Death ($)(5) | | Disability ($)(5) | | Retirement ($)(6) | | Ryan M. Schneider | | Severance Pay | | 6,000,000 | | | 6,000,000 | | | — | | | — | | | — | | | Death and Dismemberment Insurance Benefits | | — | | | — | | | 1,000,000 | | | — | | | — | | | Health Care | | 28,658 | | | 28,658 | | | — | | | — | | | — | | | Equity Vesting/Acceleration | | 6,266,999 | | | 2,004,249 | | | 4,634,392 | | | 4,634,392 | | | — | | | Cash Award Vesting/ Acceleration | | 1,500,000 | | | 375,000 | | | 375,000 | | | 375,000 | | | — | | | Total | | 13,795,657 | | | 8,407,907 | | | 6,009,392 | | | 5,009,392 | | | — | | | Charlotte C. Simonelli | | Severance Pay | | 3,800,000 | | | 1,900,000 | | | — | | | — | | | — | | | Death and Dismemberment Insurance Benefits | | — | | | — | | | 1,000,000 | | | — | | | — | | | Health Care | | 17,507 | | | 17,507 | | | — | | | — | | | — | | | Equity Vesting/Acceleration | | 1,174,080 | | | 344,817 | | | 946,755 | | | 946,755 | | | — | | | Total | | 4,991,587 | | | 2,262,324 | | | 1,946,755 | | | 946,755 | | | — | | | Melissa K. McSherry | | Severance Pay | | 3,000,000 | | | 1,500,000 | | | — | | | — | | | — | | | Death and Dismemberment Insurance Benefits | | — | | | — | | | 875,000 | | | — | | | — | | | Health Care | | 28,843 | | | 28,843 | | | — | | | — | | | — | | | Equity Vesting/Acceleration | | 1,100,486 | | | 44,973 | | | 967,964 | | | 967,964 | | | — | | | Total | | 4,129,329 | | | 1,573,816 | | | 1,842,964 | | | 967,964 | | | — | | | Susan E. Yannaccone | | Severance Pay | | 3,000,000 | | | 1,500,000 | | | — | | | — | | | — | | | Death and Dismemberment Insurance Benefits | | — | | | — | | | 625,000 | | | — | | | — | | | Health Care | | 17,459 | | | 17,459 | | | — | | | — | | | — | | | Equity Vesting/Acceleration | | 568,045 | | | 163,737 | | | 436,086 | | | 436,086 | | | — | | | Cash Award Vesting/ Acceleration | | 66,667 | | | — | | | 66,667 | | | 66,667 | | | — | | | Total | | 3,652,171 | | | 1,681,196 | | | 1,127,753 | | | 502,753 | | | — | | | Marilyn J. Wasser | | Severance Pay | | 2,400,000 | | | 1,200,000 | | | — | | | — | | | — | | | Death and Dismemberment Insurance Benefits | | — | | | — | | | 500,000 | | | — | | | — | | | Health Care | | 10,097 | | | 10,097 | | | — | | | — | | | — | | | Equity Vesting/Acceleration | | 926,691 | | | 774,321 | | | 969,567 | | | 969,567 | | | 774,321 | | | Total | | 3,336,788 | | | 1,984,418 | | | 1,469,567 | | | 969,567 | | | 774,321 | |
_______________ | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Benefit(1)(2) | Termination without Cause or for Good Reason in connection with a Change of Control ($)(3) | Other Termination without Cause or for Good Reason ($)(4) | Death ($)(5) | Disability ($)(5) | Retirement ($)(6) | | Ryan M. Schneider | | Severance Pay | 6,000,000 | | 6,000,000 | | — | | — | | — | | | Death and Dismemberment Insurance Benefits | — | | — | | 1,000,000 | | — | | — | | | Health Care | 29,100 | | 29,100 | | — | | — | | — | | | Equity Vesting/Acceleration | 14,709,309 | | 4,194,030 | | 10,152,527 | | 10,152,527 | | — | | | Exceptional Achievements Award (7) | 5,000,000 | | 5,000,000 | | 5,000,000 | | 5,000,000 | | — | | | Performance Cash Award Vesting/Acceleration (8) | 10,000,000 | | — | | — | | — | | — | | | Total | 35,738,409 | | 15,223,130 | | 16,152,527 | | 15,152,527 | | — | | | Charlotte C. Simonelli | | Severance Pay | 3,800,000 | | 1,900,000 | | — | | — | | — | | | Death and Dismemberment Insurance Benefits | — | | — | | 1,000,000 | | — | | — | | | Health Care | 17,807 | | 17,807 | | — | | — | | — | | | Equity Vesting/Acceleration | 3,423,944 | | 832,005 | | 2,552,371 | | 2,552,371 | | — | | | Total | 7,241,751 | | 2,749,812 | | 3,552,371 | | 2,552,371 | | — | | | Melissa K. McSherry | | Severance Pay | 3,000,000 | | 1,500,000 | | — | | — | | — | | | Death and Dismemberment Insurance Benefits | — | | — | | 875,000 | | — | | — | | | Health Care | 27,278 | | 27,278 | | — | | — | | — | | | Equity Vesting/Acceleration | 3,107,249 | | 442,604 | | 2,624,243 | | 2,624,243 | | — | | | Total | 6,134,527 | | 1,969,882 | | 3,499,243 | | 2,624,243 | | — | | | Marilyn J. Wasser | | Severance Pay | 2,400,000 | | 1,200,000 | | — | | — | | — | | | Death and Dismemberment Insurance Benefits | — | | — | | 500,000 | | — | | — | | | Health Care | 10,273 | | 10,273 | | — | | — | | — | | | Equity Vesting/Acceleration | 2,521,431 | | 1,987,030 | | 2,988,518 | | 2,988,518 | | 1,987,030 | | | Total | 4,931,704 | | 3,197,303 | | 3,488,518 | | 2,988,518 | | 1,987,030 | | | Susan E. Yannaccone | | Severance Pay | 3,000,000 | | 1,500,000 | | — | | — | | — | | | Death and Dismemberment Insurance Benefits | — | | — | | 625,000 | | — | | — | | | Health Care | 17,787 | | 17,787 | | — | | — | | — | | | Equity Vesting/Acceleration | 3,897,146 | | 622,459 | | 3,266,343 | | 3,266,343 | | — | | | Total | 6,914,933 | | 2,140,246 | | 3,891,343 | | 3,266,343 | | — | |
(1)Each NEO is entitled to payment of accrued but unpaid salary to the date of termination and payment of the 20222023 EIP, to the extent earned. See "—"Summary Compensation TableSummary Compensation Table"" for amounts earned by the NEOs under the 20222023 EIP. The amounts set forth in the table do not include accrued but unpaid salary or any earned compensation under the 20222023 EIP arising from a termination of employment as of December 31, 2022.2023. The amounts shown also do not include deferred compensation payable to Ms. Wasser or Ms. Yannaccone under the Amended and Restated Executive Deferred Compensation Plan.
(2)The value ascribed to equity acceleration/vesting of awards in this table is based upon the closing price of our common stock as of December 30, 202229, 2023, ($6.398.11 per share). (3)PSUs assumed by an acquiror in a change of control transaction are converted into time-vesting restricted stock units.units at target. The vesting of options and restricted stock units (including any time-vesting restricted stock units into which PSUs have been converted upon a change of control) accelerate in the event the individual terminates his or her employment for "Good Reason" or his or her employment is terminated for other than "Cause" within 24 months of a change of control. (4)Ms. Wasser was "retirement eligible" aton December 31, 20222023, and the amount shown under this column for "Equity Acceleration/Vesting" is the amount she would be entitled to under the "Retirement" column as the retirement eligible provisions of her awards provide greater benefits. See footnote (6) below. For other NEOs, the amount shown under this column for "Equity Acceleration/Vesting" is the sum of the pro rata shares that would be payable, if earned, under outstanding PSU awards at the end of the three-year performance period based upon the actual results, utilizing the assumptions set forth in footnotes (5)(6) to (8)(9) to the "Outstanding"Outstanding Equity Awards at 20222023 Fiscal Year End"End" table. (5)Amounts shown under this column for "Equity Acceleration/Vesting" for Ms. Wasser (as a retirement eligible grantee) isare the sum of (1) the amount set forth under the "Retirement" column and (2) the value of the unvested 20222023 restricted stock unit award. For other NEOs, the amountamounts shown under this column for "Equity Acceleration/Vesting" isare the sum of (1) the pro rata shares that would be payable, if earned, under outstanding PSU awards at the end of the three-year performance period based upon the actual results, utilizing the assumptions set forth in footnotes (5)(6) to (8)(9) to the "Outstanding"Outstanding Equity Awards at 20222023 Fiscal Year End"End" table; and (2) the value of unvested restricted stock unit awards; and (3) the aggregate value of the accelerated vesting of options, calculated by multiplying the difference between the closing price of our common stock on December 30, 2022 ($6.39) and the option exercise price by the number of stock options subject to accelerated vesting. As the exercise price of each unvested option held by each of these NEOs was above the closing price of our common stock on December 30, 2022, no value has been included for the third component of this calculation.awards. All salaried employees are entitled to death insurance benefits of up to $1.0 million. The amounts reported under the column for Death and Dismemberment Insurance Benefits are the proceeds (over this $1.0 million) that are payable to NEOs that have qualified for supplemental coverage under a death and dismemberment insurance policy available to the NEOs, the premiums of which are paid by the Company. The death and dismemberment insurance benefit is an amount up to 2.5 times the NEO's annual base salary at the time of death, rounded up to the nearest $1,000 (which is inclusive of any standard Company-provided life insurance policy applicable to the NEO), subject to a further cap of $2 million. (6)For Ms. Wasser (as a retirement eligible grantee): (1) options and restricted stock units will continue to vest provided she has been employed or provided services to the Company for one year following the date of grant and (2) performance share units will continue to vest provided she has been employed or provided service to the Company for the first year of the three-year performance cycle. The amounts shown under this column for "Equity Acceleration/Vesting" for Ms. Wasser isare the sum of (1) the amount that would be payable under their 2021her 2022 and 20222023 PSU awards utilizingbased on the assumptions set forth in footnotes (5)(6) to (8)(9) to the "Outstanding"Outstanding Equity Awards at 20222023 Fiscal Year End"End" table, and (2) the value of her unvested 20202021 and 20212022 restricted stock unit awards (as the one-year service requirement had been satisfied for those grants). (7)As discussed in the CD&A, Mr. Schneider was paid a $5 million Exceptional Achievements Award in November 2023; however, as that award is subject to clawback if Mr. Schneider resigns his employment (without Good Reason) prior to March 1, 2025, the amounts shown in the table represent the amount that, upon such termination, would no longer be subject to clawback. The amounts do not represent additional payments upon termination. (8)Represents the amount paid for each reason under the Performance Cash Award. If assumed or substituted in connection with a change in control, then upon the change in control, the Performance Cash Award ceases to be subject to the achievement of the performance criteria and (3)vests in full at the aggregateend of the performance period, subject to continued employment and compliance with the applicable restrictive covenants. However, if after a change in control, the CEO’s employment is terminated without cause or the CEO resigns his employment for Good Reason (as defined in his employment agreement) during the applicable Performance Period, each performance cash award becomes fully vested and payable. If the CEO's employment is terminated without cause or the CEO resigns his employment for Good Reason during the applicable Performance Period, he will be eligible to receive a pro-rata amount of the Performance Award based on actual performance for the applicable Performance Period. If the CEO’s employment terminates due to his death or disability, he will be entitled to receive a portion of such Performance Award equal to the $5 million value of the accelerated vesting of options, calculated by multiplying the difference between the closing price of our common stock on December 30, 2022 ($6.39) and the option exercise price byPerformance Award, pro-rated for the number of stock options subject to accelerated vesting.full months of the applicable Performance Period. As the exercise pricefirst Performance Period does not begin until January 1, 2024, there is no prorated payout for Termination without Cause or for Good Reason, Death or Disability as of each unvested option held by each of these NEOs was above the closing price of our common stock on December 30, 2022, no value has been included for the third component of this calculation.31, 2023.
Pay Ratio At the direction of the Compensation Committee and in accordance with SEC rules, the Company has calculated:
▪the estimated median of the annual total compensation of all employees, except our CEO (our "non-CEO median employee");
▪the annual total compensation of our CEO; and
▪The following table sets forth the estimated ratio of the annual total compensation of our non-CEOCEO to the annual total compensation of our median employee to our CEO (the "pay ratio").(excluding the CEO) for the year ended December 31, 2023:
| | | | | | | | | | CEO total compensation in 2023 | $10,059,781 | | | Median Employee total compensation in 2023 | $75,089 | | | Ratio of CEO to Median Employee total compensation | 134.0 | |
In identifying the non-CEO median employee, we considered 7,9,103724 employees, which included all of our (and our consolidated subsidiaries) full- and part-time, seasonal and temporary employees, including employees on a leave of absence as of December 31, 20202023, in the United States and the United Kingdom, other than our CEO. TheseAs permitted by the SEC rules, we elected to exclude 366 employees represented over 96% of our total employee base of 9,434 at December 31, 2020. As of December 31, 2022 we had 9,024 employees. As of December 31, 2022, we had 395 employees in nine jurisdictions other than the U.S. and the U.K., who in the aggregate represented 4.4%4.5% of our total employee base as of December 31, 2022 and were excluded from calculating our non-CEO median employee as permitted by SEC rules.
These employees were located as follows as of December 31, 2022:
| | | | | | | | | | | | | | | | Country | | Employees (#) | | Employee Base (%) | | Brazil | | 8 | | 0.1% | | Canada | | 12 | | 0.1% | | China | | 40 | | 0.4% | | Germany | | 1 | | —% | | Hong Kong | | 30 | | 0.3% | | Hungary | | 1 | | —% | | India | | 135 | | 1.5% | | Singapore | | 168 | | 1.9% | | Total | | 395 | | 4.4% |
The consistently applied compensation measure used to identify our non-CEO median employee was the sum of: ▪salary (or, for non-salaried employees, wages plus overtime) for fiscal year 2020;2023; ▪cash award payments made in 2020,2023, including payments made under our annual cash incentive plan and other cash-based incentive and commission plans; ▪the grant date fair value of equity awards; and ▪Company contributions to 401(k) plans (or, in the United Kingdom, pension plans). We did not make cost-of-living adjustments to these amounts, but in determining the compensation of employees located in the U.K., we converted the aggregate value of each employee's compensation from British pounds into U.S. dollars using the conversion rate of 1.35772,1.273, as in effect as of the last day of 2020. The employee identified through this process also serves as our non-CEO median employee for the year ended December 31, 2022. We believe that the 2020 non-CEO median employee remains representative of our median employee as there has been no change in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change to our pay ratio disclosure.2023.
Based on the above, our non-CEO median employee is a full-time employee located in the United States with annual total compensation of $66,848$75,089 in fiscal year 2022. This amount2023, which includes the non-CEO median employee's salary earned of $64,525$74,642 and Company 401(k) contributions of $2,323 to the non-CEO median employee's account under the Company's 401(k) plan. The non-CEO median employee did not participate in the Company's regular annual cash incentive plan, did not receive any other cash bonus or equity award in fiscal year 2022 and did not participate in the Anywhere Pension Plan or Anywhere Executive Deferred Compensation Plan. Mr. Schneider's total compensation for fiscal year 2022 was $7,808,070 as set forth in the Summary Compensation Table.
Based on these amounts, the estimated pay ratio of Mr. Schneider's annual total compensation to that of our non-CEO median employee for fiscal year 2022 is 1:117.
Pay Versus Performance Pay Versus Performance Table | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year | Summary Compensation Table Total for Principal Executive Officer (PEO) ($) (1) | Compensation Actually Paid to PEO ($) (3) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers ($) (2) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($) (3) | Value of Initial Fixed $100 Investment Based On: | Net (Loss) Income ($ in millions) (5) | Operating EBITDA (non-GAAP) ($ in millions) (6) | | Total Shareholder Return | Peer Group Total Shareholder Return (4) | | 2022 | 7,808,070 | | (14,373,512) | | 2,362,459 | | (173,097) | | 66.00 | | 151.13 | | (287) | | 449 | | | 2021 | 12,619,247 | | 23,627,955 | | 3,899,958 | | 5,361,892 | | 173.66 | | 187.16 | | 343 | | 902 | | | 2020 | 11,170,316 | | 21,720,594 | | 3,065,564 | | 4,508,137 | | 135.54 | | 124.48 | | (360) | | 726 | |
_______________ | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year | Summary Compensation Table Total for Principal Executive Officer (PEO) ($)(1) | Compensation Actually Paid to PEO ($)(3) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers ($)(2) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($)(3) | Value of Initial Fixed $100 Investment Based On: | Net (Loss) Income ($ in millions)(5) | Operating EBITDA (non-GAAP) ($ in millions)(6) | | Total Stock-holder Return | Peer Group Total Stock-holder Return (4) | | 2023 | 10,059,781 | | 13,033,190 | | 3,478,480 | | 4,238,076 | | 83.76 | | 263.07 | | (97) | | 200 | | | 2022 | 7,808,070 | | (14,373,512) | | 2,362,459 | | (173,097) | | 66.00 | | 151.13 | | (287) | | 449 | | | 2021 | 12,619,247 | | 23,627,955 | | 3,899,958 | | 5,361,892 | | 173.66 | | 187.16 | | 343 | | 902 | | | 2020 | 11,170,316 | | 21,720,594 | | 3,065,564 | | 4,508,137 | | 135.54 | | 124.48 | | (360) | | 726 | |
(1)Mr. Schneider served as the Company's PEO (CEO and President) for each year presented. (2)The Company's Non-PEO NEOs were: (i) in 2022 and in 2023, Ms. Simonelli; Ms. McSherry; Ms. Yannaccone and Ms. Wasser, (ii) in 2021, Ms. Simonelli; Ms. Wasser; Mr. M. Ryan Gorman; and Ms. Katrina Helmkamp, and (iii) in 2020, Ms. Simonelli; Ms. Wasser; Ms. Helmkamp; and Mr. Casey.
(3)The following table reflects adjustments made to total compensation amounts reported in the Summary Compensation Table ("SCT") for the PEO and Non-PEO NEOs for each applicable year to compute "Compensation Actually Paid" pursuant to Item 402(v) of Regulation S-K: | PEO (a) | PEO (a) | 2022 | 2021 | 2020 | PEO (a) | 2023 | 2022 | 2021 | 2020 | | Total Compensation as reported in the SCT | Total Compensation as reported in the SCT | $ | 7,808,070 | | $ | 12,619,247 | | $ | 11,170,316 | | | Deduction of amounts reported under the "Stock Awards" column of the SCT | Deduction of amounts reported under the "Stock Awards" column of the SCT | (6,796,238) | | (6,607,955) | | (7,258,745) | | | Deduction of amounts reported under the "Option Awards" column of the SCT | Deduction of amounts reported under the "Option Awards" column of the SCT | — | | — | | — | | | Increase for fair value of equity awards granted during the year that remain outstanding and unvested as of year-end | Increase for fair value of equity awards granted during the year that remain outstanding and unvested as of year-end | 1,733,121 | | 10,575,495 | | 11,981,413 | Increase for fair value of equity awards granted during the year that remain outstanding and unvested as of year-end | 10,714,745 | 1,733,121 | 10,575,495 | 11,981,413 | | Increase for fair value of equity awards granted during the year that vested during the year | Increase for fair value of equity awards granted during the year that vested during the year | — | | — | | — | | | Change in fair value from the prior year-end to the current year-end for awards granted in prior years that were outstanding and unvested as of current year-end | Change in fair value from the prior year-end to the current year-end for awards granted in prior years that were outstanding and unvested as of current year-end | (8,999,746) | | 5,346,914 | | 5,145,877 | Change in fair value from the prior year-end to the current year-end for awards granted in prior years that were outstanding and unvested as of current year-end | (67,528) | (8,999,746) | 5,346,914 | 5,145,877 | | Change in fair value from the prior year-end to the vesting date for awards granted in prior years that vested during the current year | Change in fair value from the prior year-end to the vesting date for awards granted in prior years that vested during the current year | (4,379,556) | | 2,539,328 | | 915,681 | | | Deduction for the fair value of awards (determined at the end of the prior year) granted in prior years that were forfeited during the current year | Deduction for the fair value of awards (determined at the end of the prior year) granted in prior years that were forfeited during the current year | (3,739,163) | | (845,074) | | (233,948) | | | Increase for the value of any dividends or other earnings paid on equity awards during the year prior to the vesting date that are not otherwise included in the total compensation for the year | Increase for the value of any dividends or other earnings paid on equity awards during the year prior to the vesting date that are not otherwise included in the total compensation for the year | — | | — | | — | | | Deduction for the aggregate change in the actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans reported in the SCT | Deduction for the aggregate change in the actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans reported in the SCT | — | | — | | — | | | Increase for pension value attributable to current year's service and any change in pension value attributable to plan amendments made during the current year | Increase for pension value attributable to current year's service and any change in pension value attributable to plan amendments made during the current year | — | | — | | — | | | Compensation Actually Paid to PEO | Compensation Actually Paid to PEO | $ | (14,373,512) | | $ | 23,627,955 | | $ | 21,720,594 | |
| | | | | | | | | | | | | | | Non-PEO NEOs ($ amounts presented as averages) (a) | 2023 | 2022 | 2021 | 2020 | | Total Compensation as reported in the SCT | $ | 3,478,480 | | $ | 2,362,459 | | $ | 3,899,958 | | $ | 3,065,564 | | | Deduction of amounts reported under the "Stock Awards" column of the SCT | (1,714,493) | | (1,579,605) | | (932,201) | | (954,082) | | | Deduction of amounts reported under the "Option Awards" column of the SCT | — | | — | | — | | — | | | Increase for fair value of equity awards granted during the year that remain outstanding and unvested as of year-end | 2,509,110 | | 472,838 | | 1,474,849 | | 1,609,838 | | Increase for fair value of equity awards granted during the year that vested during the year | — | | — | | — | | — | | | Change in fair value from the prior year-end to the current year-end for awards granted in prior years that were outstanding and unvested as of current year-end | 26,750 | | (895,369) | | 651,998 | | 816,268 | | Change in fair value from the prior year-end to the vesting date for awards granted in prior years that vested during the current year | (53,119) | | (342,309) | | 347,271 | | (1,763) | | | Deduction for the fair value of awards (determined at the end of the prior year) granted in prior years that were forfeited during the current year | (8,652) | | (191,111) | | (79,983) | | (14,036) | | | Increase for the value of any dividends or other earnings paid on equity awards during the year prior to the vesting date that are not otherwise included in the total compensation for the year | — | | — | | — | | — | | | Deduction for the aggregate change in the actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans reported in the SCT | — | | — | | — | | (13,652) | | | Increase for pension value attributable to current year's service and any change in pension value attributable to plan amendments made during the current year | — | | — | | — | | — | | | Compensation Actually Paid to Non-PEO NEOs | $ | 4,238,076 | | $ | (173,097) | | $ | 5,361,892 | | $ | 4,508,137 | |
| | | | | | | | | | | | Non-PEO NEOs ($ amounts presented as averages) (a) | 2022 | 2021 | 2020 | | Total Compensation as reported in the SCT | $ | 2,362,459 | | $ | 3,899,958 | | $ | 3,065,564 | | | Deduction of amounts reported under the "Stock Awards" column of the SCT | (1,579,605) | | (932,201) | | (954,082) | | | Deduction of amounts reported under the "Option Awards" column of the SCT | — | | — | | — | | | Increase for fair value of equity awards granted during the year that remain outstanding and unvested as of year-end | 472,838 | | 1,474,849 | | 1,609,838 | | Increase for fair value of equity awards granted during the year that vested during the year | — | | — | | — | | | Change in fair value from the prior year-end to the current year-end for awards granted in prior years that were outstanding and unvested as of current year-end | (895,369) | | 651,998 | | 816,268 | | Change in fair value from the prior year-end to the vesting date for awards granted in prior years that vested during the current year | (342,309) | | 347,271 | | (1,763) | | | Deduction for the fair value of awards (determined at the end of the prior year) granted in prior years that were forfeited during the current year | (191,111) | | (79,983) | | (14,036) | | | Increase for the value of any dividends or other earnings paid on equity awards during the year prior to the vesting date that are not otherwise included in the total compensation for the year | — | | — | | — | | | Deduction for the aggregate change in the actuarial present value of the accumulated benefit under all defined benefit and actuarial pension plans reported in the SCT | — | | — | | (13,652) | | | Increase for pension value attributable to current year's service and any change in pension value attributable to plan amendments made during the current year | — | | — | | — | | | Compensation Actually Paid to Non-PEO NEOs | $ | (173,097) | | $ | 5,361,892 | | $ | 4,508,137 | |
_______________
(a) The fair values of the equity awards were calculated using valuation assumptions that materially differ from those disclosed at the time of grant, including: (1) the fair value of RSU awards was calculated using the closing price of our common stock
as of the last day of the applicable year or on the date of vesting, as applicable; (2) the fair value of CFCF PSU awards was estimated using the closing stock price of our common stock as of the last day of the applicable year and adjusted for management's estimate of performance; (3) the fair value of RTSR PSU awards was estimated using the Monte Carlo Simulation method (which reflects for each particular award and valuation date adjustments for: estimates of performance, expected volatility, risk-free interest rate, correlation coefficient, and dividend yield); and (4) the fair value of options was estimated using the Black-Scholes option-pricing model (which reflects for each particular award and valuation date: adjustments for expected volatility, risk-free interest rate, dividend yield, expected term - calculated using the simplified method, and stock price). Declining stock price served as the primary driver of change in the fair value of options, partially offset by an increase in volatility - in particular for options granted prior to 2019, none of which were in-the-money as of any valuation date applicable to this table. For each year, the value of RSU awards, PSU awards and stock option awards used to calculate Compensation Actually Paid reflect the following assumptions: | | | | | | | | | | | | | | | | 2023 | 2022 | 2021 | 2020 | | RSU Awards: | | | | | | Stock Price | $5.66 - $8.11 | $6.39 - $18.25 | $14.81 - $18.23 | $3.41 - $13.12 | | CFCF PSU Awards: | | | | | | Stock Price as of Year End | $8.11 | $6.39 | $16.81 | $13.12 | | Performance Multiplier | 0%-100% | 50%-200% | 200% | 72% - 200% | | RTSR PSU Awards: | | | | | | Volatility | 64.99%-70.76% | 55.30% - 58.60% | 51.60% - 83.30% | 91.10% - 105.90% | | Risk-Free Interest Rate | 4.23%-4.79% | 4.41% - 4.73% | 0.39% - 0.73% | 0.10% - 0.13% | | Stock Options: | | | | | | Stock Price | $4.88 - $5.79 | $6.39 - $18.18 | $14.81 - $19.28 | $3.41 - $13.12 | | Expected Life | 3 years | 3 - 4 years | 3 - 5 years | 3 - 5.5 years | | Risk-Free Interest Rate | 3.58% - 4.51% | 1.47% - 4.22% | 0.30% - 1.26% | 0.17% - 1.14% | | Volatility | 65.54%-74.95% | 70.02% - 77.27% | 62.20% - 78.62% | 41.51% - 69.60% | | Dividend Yield | — | — | — | — |
(4)Peer group is the S&P Home Builders Select Industry index, or XHB Index (which includes a diversified group of holdings representing home building, building products, home furnishings and home appliances). The XHB Index is the published industry or line-of-business index utilized in the Company's Annual Report on Form 10-K for the yearyears ended December 31, 2022.2022 and 2023. (5)Represents the amount of net income (loss) reflected in our audited financial statements for each applicable fiscal year. (6)Operating EBITDA is our primary non-GAAP measure. See Annex A for a definition of Operating EBITDA, an explanation of why we believe this non-GAAP measure is useful to investors and the limitations of this measure as an analytical tool. Most Important Company Performance Measures The following is an unranked list of the most important measures the Company used during 2023 to link executive compensation actually paid to Company performance. | | | | Below is an unranked list of the most important measures the Company used during 2022 to link executive compensation actually paid to Company performance. | Tabular List | ■Operating EBITDA* | ■Relative Total Stockholder Returns | ■Cumulative Free Cash Flow* |
_______________* See Annex A for a definition and a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure, an explanation of why we believe this non-GAAP measure is useful to investors and the limitations of this measure as an analytical tool.
Graphical Relationship Between Pay and Performance
PROPOSAL 2: ADVISORY VOTE ON ANYWHERE REAL ESTATE EXECUTIVE COMPENSATION We are asking our stockholders to cast a non-binding advisory vote to approve the compensation of our NEOs in 2022as described in the Compensation Discussion and Analysis and other compensation disclosure regarding NEO compensation,this Proxy Statement, which we refer to as a "Say-on-Pay Vote." Our executive compensation program is designed to: ▪support a high-performance environment by linking compensation with performance; ▪attract, motivate and retain key executives who are crucial to our long-term success; ▪reinforce ethical behavior and practices and discourage excessive risk-taking; and ▪align executive compensation with stockholder interests in both short-term performance and long-term value creation. Our executive compensation program emphasizes performance-based compensation, and the majority of our CEO’s and other NEOs’ compensation is variable based on overall long-term Company performance. Our executive compensation program contains financial and strategic goals, and the value of equity-based awards will depend on our long-term stock price performance. We encourage you to read the Compensation Discussion and Analysis and the tables and narratives for the details on the 2023 compensation of our NEOs. We hold an advisory vote on the compensation of our NEOs on an annual basis in accordance with the preference expressed by our stockholders at our 2019 annual meeting regarding the frequency of the Say-on-Pay Vote. Because your vote is advisory, it will not be binding upon or overrule any decisions of the Board, nor will it create or imply any additional fiduciary duty on the part of the Board. However, the Compensation and Talent Management Committee values the opinions expressed by stockholders in their vote on this proposal and will take into account the outcome of the vote when considering executive compensation arrangements in the future. Executive Compensation Program
Realizable Compensation Tracks Performance.Our rigorous performance-based program is designed so that CEO and other NEO realizable target direct compensation follows the same trajectory as our business performance, including in 2022:
▪No payout under the 2022 Executive Incentive Plan (our annual cash incentive plan)
▪No payouts for awardstied to Relative Total Stockholder Return
▪Maximum achievement for awards tied to Cumulative Free Cash Flow
Realized value was 71% of target in the aggregatefor the 2020-2022 performance share unit awards (based on awards earned and our stock price or unit value on December 30, 2022).
Responsive to Investor Feedback.Our Chairman of the Board and Chair of the Compensation Committee has reached out to our top stockholders every year since 2018 — including in 2022. Our 2022 executive compensation program incorporates investor
feedback received during this outreach. See page 2 for a summary of our 2022 Investor Outreach Program.
Program Highlights. Highlights of our 2022 executive compensation program include the following:
▪61% of our CEO's target direct compensation opportunity was linked to short- and long-term strategic and business goals as measured by our performance against absolute and relative metrics and his contribution to our strategic initiatives - with a significant portion of the target direct compensation opportunity for our other executives tied to the same metrics
▪At least 50% of target long-term incentive compensation was granted in the form of performance share units that require achievement of robust Company goals over a three-year period.
Compensation Strategy.As discussed in the Compensation Discussion and Analysis, our executive compensation program is designed to:
▪support a high-performance environment by linking compensation with performance;
▪attract, motivate and retain key executives who are crucial to our long-term success;
▪reinforce ethical behavior and practices and discourage excessive risk-taking; and
▪align executive compensation with stockholder interests in both short-term performance and long-term value creation.
Strong Commitment to Best Compensation Practices.The Compensation Committee has established many "best practices" in the Company's executive compensation programs, as described elsewhere in this proxy statement.
We encourage you to read the Compensation Discussion and Analysis and the tables and narratives for the details on the 2022 compensation of our NEOs.
Recommendation for Approval
For the reasons discussed above, the Board recommends that stockholders vote in favor of the following resolution: RESOLVED, that the Company's stockholders approve, on an advisory basis, the compensation of the named executive officers described in the Compensation Discussion and Analysis and the tabular and related narrative disclosure regarding named executive officer compensation included in this proxy statementProxy Statement pursuant to the compensation disclosure rules of the SEC. Recommendation for Approval
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee has selected PricewaterhouseCoopers LLP, or PwC, as our independent registered public accounting firm to conduct an integrated audit of our consolidated financial statements and internal control over financial reporting for fiscal year 2023.2024. PwC served as our independent registered public accounting firm for 20222023 for both Anywhere Real Estate and Anywhere Group and has served as our independent registered public accounting firm since May 2009. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company's financial statements. The Audit Committee annually reviews PwC's independence and performance in deciding whether to retain PwC as the Company's independent registered public accounting firm. As part of its determination to retain PwC as the Company's independent registered public accounting firm for fiscal year 2023,2024, the Audit Committee took into account multiple factors, including: ▪Depth of Institutional and Industry Knowledge. PwC possesses significant institutional knowledge of the Company, including its segments, business and operations, accounting policies and practices, and internal control over financial reporting. Likewise, PwC has substantial experience auditing other companies providing real estate services and business processing services. ▪Quality of Services. The quality of PwC's historical and recent performance on the Company's audits has demonstrated the capability and expertise of its audit team in handling the breadth and complexity of our operations. The Audit Committee also considered data relating to audit quality, including recent Public Company Accounting Oversight Board (PCAOB) reports on PwC and related industry information. ▪Demonstrated Objectivity. The Audit Committee considered the independence, objectivity, and professional skepticism demonstrated by PwC, including the quality and candor of PwC's communications with the Audit Committee and management. ▪Appropriateness of Fee Structure. PwC's fees have been considered appropriate, taking into account both the size and complexity of the Company's business. ▪Potential for Business Disruption. The Audit Committee took into account the potential disruption of operational efficiencies and diversion of management time that could result infrom the engagement of a new independent registered public accounting firm that was not as knowledgeable about our business. The Audit Committee also considered the Company's auditor independence controls, including the Audit Committee's pre-approval policy of all audit and non-audit services by PwC, the Audit Committee's frequent meetings with PwC in executive session and PwC's own independence process. The Audit Committee has considered whether the services provided by PwC, other than audit services, are compatible with maintaining that firm’s independence and has concluded that PwC is independent.
As an additional independence safeguard, PwC rotates its lead audit engagement partner every five years. The Audit Committee oversees the selection
process for each new lead engagement partner, which was last done in 2020 and was effective for PwC's audit of the Company's consolidated financial statements for fiscal year 2021. The next lead audit engagement partner rotation is expected to commence in connection with an engagement of PwC in 2026. The Audit Committee's selection process includes a review of candidate qualifications, candidate interviews and discussions with management. The Audit Committee and the Board believe that the continued retention of PwC as our independent registered public accounting firm is in the best interest of the Company and our stockholders, and we are asking our stockholders to ratify the selection of PwC as our independent registered public accounting firm for 2023.2024. Although ratification is not required by our Bylaws or otherwise, the Board is submitting the selection of PwC to our stockholders for ratification because we value our stockholders’ views on the Company’s independent registered public accounting firm and as a matter of good corporate practice. In the event that our stockholders fail to ratify the selection, it will be considered a recommendation to the Board and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee may in its discretion select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders. Your proxy will be voted FOR the ratification of PwC as our independent registered public accounting firm for 20232024 unless you indicate otherwise when you vote. Representatives of PwC will be present at the Annual Meeting and available to respond to questions and will have the opportunity to make a statement if such representatives desire to do so. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEFOR FOR THE ADOPTION OF THE PROPOSAL TO RATIFY THE APPOINTMENT OF THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. Disclosure About Fees In addition to being retained as independent auditors to audit our consolidated financial statements, PwC provided various other services to us during 20222023 and 2021.2022. The aggregate fees billed for professional services by PwC in 20222023 and 20212022 were as follows: | | | | | | | | | | | 2022 | 2021 | Audit Fees(1) | $ | 4,983,750 | | $ | 5,431,250 | | | Audit-Related Fees | — | | — | | Tax Fees(2) | 550,000 | | 280,000 | | Other(3) | 6,650 | | 4,365 | | | Total | $ | 5,540,400 | | $ | 5,715,615 | |
_______________ | | | | | | | | | | | | | | 2023 | | 2022 | Audit Fees(1) | $ | 5,499,938 | | | $ | 4,983,750 | | | Audit-Related Fees | — | | | — | | Tax Fees(2) | 255,000 | | | 550,000 | | Other(3) | 2,000 | | | 6,650 | | | Total | $ | 5,756,938 | | | $ | 5,540,400 | |
(1) Represents fees for the audit of our consolidated financial statements, the audit of internal controls, the review of interim financial statements included in Form 10-Qs and other attest services primarily related to financial accounting consultations, comfort letters and SEC consents, regulatory and statutory audits and Franchise Disclosure Document filings in various states. (2) Represents fees related to tax compliance services and research and development tax credit consulting. (3) Software license fee.
Pre-Approval of Audit and Non-Audit Services The Audit Committee (which for purposes of this section includes the Audit Committee of Anywhere Group, whose members and purpose are identical to those of the Audit Committee of Anywhere Real Estate) is responsible for approving the terms of the independent auditor's services. The Audit Committee regularly reviews and pre-approves the nature and amount of non-audit services to be provided by the independent auditor, including when determining its independence. All services performed by our independent auditors in 20222023 and 20212022 were pre-approved in accordance with the pre-approval policy and procedures adopted by our Audit Committee (as described below). The pre-approval policy describes the permitted audit, audit-related, tax and other services (collectively, the "Disclosure Categories") that the independent auditor may perform. The policy requires that prior to the beginning of each fiscal year, a description of the nature and amount of services (the "Service List") anticipated to be performed by the independent auditor in each of the Disclosure Categories in the ensuing fiscal year be presented to the Audit Committee for approval. Any requests for audit, audit-related, tax and other services not contemplated by the Service List must be submitted to the Audit Committee for specific pre-approval, irrespective of the amount, and cannot commence until such approval has been granted (subject to the limited de minimis provision described below). Normally, pre-approval is provided at regularly scheduled meetings of the Audit Committee. However, the authority to grant specific pre-approval between meetings, as necessary, has been delegated to the Chair of the Audit Committee, provided the aggregate fees in the particular Designated Category to which a specific pre-approval relates do not exceed the pre-approved amount. The Chair updates the full Audit Committee at the next regularly scheduled meeting for any interim approvals granted. On at least a quarterly basis, the Audit Committee reviews the status of services and fees incurred year-to-date as compared to the Service List. The policy contains a de minimis provision that operates to provide retroactive approval for permissible non-audit services under certain circumstances. No services were provided by PwC during 20222023 or 20212022 under such provision. As an additional internal control measure intended to protect auditor independence, the Audit Committee also maintains a policy that prohibits the Company from hiring the independent auditor's personnel, if such person is being hired in a "financial reporting oversight role" as defined by the PCAOB and such person also participated in the current annual audit, or the immediately preceding annual audit of our financial statements. Audit Committee Report The Board has the ultimate authority for effective corporate governance, including oversight of the management of Anywhere. The Audit Committee assists the Board in fulfilling its responsibilities by overseeing the accounting and financial reporting processes of Anywhere, the audits of Anywhere's consolidated financial statements and internal controls over financial reporting, and the performance of Anywhere's internal audit function. The Audit Committee is comprised of five Directors, each of whom meets the independence standards of the NYSE and the SEC. All members of the Audit Committee have been designated by the Board as "audit committee financial experts" and one of the members, Michael J. Williams, has extensive industry-related experience. Specific responsibilities of the Audit Committee are set forth in its Charter adopted by the Board. The Audit Committee reviews the Charter annually and recommends changes, as appropriate, to the Board to reflect the evolving role of the Audit Committee. The Charter is available onunder the Investors link, Governance page of our website at www.anywhere.re. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of Anywhere's independent registered public accounting firm and approves in advance all services to be performed by Anywhere's independent registered public accounting firm in accordance with SEC rules.
As part of its engagement of Anywhere's independent registered public accounting firm, the Audit Committee evaluates the independent registered public accounting firm's performance, taking into consideration multiple factors, including institutional knowledge of the Company's business and operations, industry knowledge and global reach as it relates to where the Company conducts business, management's and the Audit Committee's evaluation of expertise and the quality of past performance, the appropriateness of fees, and auditor independence. The Audit Committee, with the assistance of
Anywhere management, also is responsible for the selection of the lead partner of the independent registered public accounting firm, evaluates the performance of the lead partner and the other key personnel on the engagement, and ensures that partner rotation practices are in compliance with all applicable SEC rules and other related laws and regulations. The Audit Committee has discussed with PricewaterhouseCoopers LLP matters required to be discussed by applicable standards and rules of the Public Company Accounting Oversight Board ("PCAOB") and the SEC. The Audit Committee has received from PricewaterhouseCoopers LLP the written disclosures required by applicable standards and rules of the PCAOB and the SEC regarding PricewaterhouseCoopers LLP's communications with the Audit Committee concerning independence, and has discussed with PricewaterhouseCoopers LLP the independence of PricewaterhouseCoopers LLP. The Audit Committee has considered whether the permissible non-audit services provided by PricewaterhouseCoopers LLP to Anywhere are compatible with PricewaterhouseCoopers LLP maintaining its independence. The Audit Committee has satisfied itself as to the independence of PricewaterhouseCoopers LLP. The Audit Committee relies on the expertise and knowledge of management, the internal auditors and the independent auditors in carrying out its oversight responsibilities. Management is responsible for Anywhere's financial reporting process, including its system of internal controls, and for the preparation of consolidated financial statements in compliance with generally accepted accounting principles and applicable laws and regulations. In addition, management is responsible for establishing, maintaining and assessing the effectiveness of Anywhere's internal control over financial reporting. PricewaterhouseCoopers LLP, Anywhere's independent registered public accounting firm, is responsible for performing an independent audit of Anywhere's consolidated financial statements and expressing an opinion on such financial statements as well as on the effectiveness of Anywhere's internal control over financial reporting. The Audit Committee has reviewed and discussed Anywhere's 20222023 Annual Report on Form 10-K, including the audited consolidated financial statements of Anywhere for the year ended December 31, 2022,2023, with management and with representatives of PricewaterhouseCoopers LLP. It is not the Audit Committee's duty or responsibility to conduct auditing or accounting reviews or procedures. During 2022,2023, the Audit Committee actively fulfilled its duties and responsibilities as outlined in its Charter. Specifically, the Audit Committee, among other actions: ▪approved in advance all services to be performed by PricewaterhouseCoopers LLP in accordance with SEC rules; ▪reviewed and discussed with management and PricewaterhouseCoopers LLP Anywhere's quarterly earnings, press releases, consolidated financial statements and related periodic reports filed with the SEC; ▪reviewed with the CEO, the CFO and other members of management, the processes that management has in place with respect to evaluating the accuracy and fair presentation of its financial statements and the effectiveness of Anywhere's disclosure controls and procedures and internal controls over financial reporting; ▪reviewed with management and PricewaterhouseCoopers LLP the Company's use of non-GAAP financial measures in its filings with the SEC as well as its other investor communications; ▪reviewed with management and PricewaterhouseCoopers LLP management's assessment of the effectiveness of Anywhere's internal control over financial reporting and PricewaterhouseCoopers LLP's opinion about the effectiveness of Anywhere's internal controls over financial reporting; ▪considered and discussed with management, the Head of Internal Audit and PricewaterhouseCoopers LLP, as appropriate, the audit scopes and plans of both PricewaterhouseCoopers LLP and the internal auditor; ▪in coordination with the full Board and its applicable committees, provided oversight on capital allocation and liquidity matters;
▪received reports on the Company's information security environment from the Company's Chief Information Security Officer, including with respect to data privacy and information technology initiatives as well as the internal and external cyber threat environment; ▪regularly discussed with management and the Head of Internal Audit the Company’s risk assessment and risk management policies and practices;
▪reviewed the integrated risk assessment performed by the internal audit, enterprise risk management, and ethics & compliance teams; ▪approved the Company's annual ethics and compliance program and received quarterly updates on the progress of the program from the Company's Chief Ethics & Compliance Officer, who has a dotted-line reporting relationship to the Audit Committee; ▪conferred regularly with the General Counsel on legal matters; ▪continued to review, in accordance with its governance schedule, those policies and procedures overseen by the Audit Committee; ▪in coordination with the full Board and its applicable committees, reviewed the Company's finance team talent; ▪promoted a culture of high respect for the Company's audit and finance functions; and ▪met in periodic executive sessions with management (including, individually, with the Company's Chief Financial Officer and Chief Ethics & Compliance Officer), the Head of Internal Audit and PricewaterhouseCoopers LLP. Based on the Audit Committee's review and discussions described above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements and management's report on internal control over financial reporting be included in Anywhere's Annual Report on Form 10-K for the year ended December 31, 2022.2023. AUDIT COMMITTEE Felicia Williams (Chair) V. Ann Hailey Bryson R. Koehler Sherry M. Smith Michael J. Williams
PROPOSAL 4: APPROVAL OF THE SECOND AMENDED & RESTATED 2018 LONG-TERM INCENTIVE PLAN
Effective February 27, 2023, the Board approved, subject to stockholder approval at the Annual Meeting, the Second Amended and Restated Anywhere Real Estate Inc. 2018 Long-Term Incentive Plan (the “2018 Plan”) to increase the number of shares authorized for issuance under the 2018 Plan by 5.0 million shares.
The 2018 Plan continues to permit the grant of awards that vest based on the achievement of performance goals. We have a track record of granting performance-based awards to our executive officers, as shown in the executive compensation sections of this proxy statement.
The 2018 Plan no longer has per-person limits on grants that may be made to any individual during any fiscal year, with the exception of the limits on grants that may be made to non-employee Directors during any fiscal year, which remain in place.
Upon stockholder approval, the 2018 Plan will be renamed the “Anywhere Real Estate Inc. Second Amended and Restated 2018 Long-Term Incentive Plan.”
If we do not obtain requisite stockholder approval of the 2018 Plan, the 2018 Amended and Restated Long-Term Incentive Plan in effect immediately prior to Board approval of the 2018 Plan (without giving
effect to the proposed share increase or any of the other changes described above) will remain in effect (referred herein as the "Current Plan").
However, the Board has determined that the remaining share reserve under the Current Plan is not sufficient for our equity award needs. If stockholders do not approve the 2018 Plan, our future ability to issue equity-based awards will be extremely limited, which could have a significant negative impact on our recruitment and retention initiatives and would require us to consider other compensation alternatives.
The Board believes that the types of incentive and equity awards available under the 2018 Plan serve as a powerful attraction, retention and motivation tool for officers and non-employee Directors as well as key employees. If the 2018 Plan is approved, the Board expects to continue to grant awards intended to focus participants on creating stockholder value and promoting our success, align their interests with those of our stockholders, and encourage a long-term commitment to the Company.
Our Compensation Committee, with the assistance of its independent compensation consultant, determined the number of shares available for issuance under the 2018 Plan based on projected equity awards to our existing executive officers, Directors and certain key
employees. We anticipate that if the 2018 Plan is approved, the number of shares available for issuance thereunder will be sufficient to provide equity incentives to this group through 2024.
In 2022, the Company repurchased and retired 8.8 million shares of common stock, which more than offsets the 5.0 million shares that we are requesting be authorized for issuance at the Annual Meeting plus the 3.0 million shares authorized in 2021 (at the time of the last stockholder approval of the plan).
In evaluating whether to adopt the 2018 Plan, our Board considered the dilutive effect of equity awards, including the Company's equity overhang and annual share usage.
Overhang. As of December 31, 2022, we had approximately 11.3 million shares of our common stock subject to outstanding equity awards or available for future equity awards under the Current Plan, which represented approximately 9.4% of fully diluted shares of common stock outstanding (or the "overhang percentage"). The 5.0 million new shares proposed to be included in the 2018 Plan's share reserve would increase the overhang percentage by an additional 3.6% to approximately 13.0%.
Share Usage.Significant Historical Award Information.The annual usage under our equity compensation program for the last three fiscal years was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fiscal Year 2020 | | Fiscal Year 2021 | | Fiscal Year 2022 | | Average | | A. | Stock Options Granted | | — | | | | — | | | | — | | | | — | | | | B. | Restricted Stock Granted | | — | | | | — | | | | — | | | | — | | | | C. | Restricted Stock Units Granted | | 839,918 | | | | 1,031,952 | | | | 1,035,791 | | | | 969,220 | | | | D. | Performance Awards Granted (at target) | | 853,084 | | | | 560,272 | | | | 817,670 | | | | 743,675 | | | | E. | Performance Awards Earned | | 278,601 | | | | 1,172,119 | | | | 751,540 | | | | 734,087 | | | | F. | Total Full Value Awards (B+C+E) | | 1,118,519 | | | | 2,204,071 | | | | 1,787,331 | | | | 1,703,307 | | | | G. | Total Options and Full Value Awards (A+F) | | 1,118,519 | | | | 2,204,071 | | | | 1,787,331 | | | | 1,703,307 | | | | H. | Basic Weighted Average Shares Outstanding | | 115,231,314 | | | | 116,390,522 | | | | 113,797,689 | | | | 115,139,842 | | | | I. | Annual Share Usage (G / H) | | 0.97 | | % | | 1.89 | | % | | 1.57 | | % | | 1.48 | | % | | J. | Dilution | | 9.98 | | % | | 10.72 | | % | | 9.35 | | % | | 10.02 | | % |
Key Data on Outstanding Equity Awards and Shares Available.(1) Information regarding outstanding equity awards and shares available for future awards under our equity plans, other than the 2018 Plan, as of the close of business on February 28, 2023, is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Current Plan | | 2012 Plan(2) | | Inducement Award(3) | | Shares underlying outstanding stock options (#) | | 728,858 | | | 1,037,140 | | | 261,234 | | | Weighted-average exercise price of outstanding stock options | | $ | 13.40 | | | $ | 31.02 | | | $ | 32.80 | | | Weighted-average remaining term of outstanding stock options | | 5.66 | | 2.71 | | 4.73 | Shares underlying outstanding full value awards(4) | | 8,104,672 | | | 34,118 | | | — | | | Shares available for future grant (#) | | 5,479 | | | — | | | — | |
_______________
(1)As of February 28, 2023, there were 110,182,748 shares of common stock issued and outstanding and the closing price of a share of the Company's common stock as of that date was $5.79.
(2)The Company has ceased granting awards under the 2012 Long-Term Incentive Plan and Amended and Restated 2012 Long-Term Incentive Plan (together, the "2012 Plan").
(3)The inducement award was made outside of our stockholder approved plans on October 23, 2017 and consists of options.
(4)We reserve performance share unit awards assuming payout at maximum and the amount reported in this row includes 5,291,240 performance share unit awards assuming maximum performance. See the table on page 5 for an overview of the three-year performance share unit award cycles outstanding during 2022, which notes estimated performance levels at December 31, 2022.
Best Practices included in the 2018 Plan
The 2018 Plan and our other related governance practices and policies include key provisions designed to protect stockholder interests, promote effective corporate governance and reflect the use of corporate governance best practices including, but not limited to the following:
▪No Discounted Options. Stock options may not be granted with exercise prices lower than the fair market value of the underlying shares on the grant date.
▪No Repricing of Underwater Options. The terms of the 2018 Plan do not allow for the repricing of options, including the cancellation and re-issuance of new options in exchange for stock options whose stock price is above the then-current fair market value of our common stock.
▪No Share Recycling for Net Exercise or Tax Withholding. Shares surrendered or withheld to pay either the exercise price of an award or to withhold taxes in respect of an award do not become available for issuance as future awards under the 2018 Plan.
▪No Single Trigger Acceleration of Awards upon a Change of Control. Awards will not accelerate simply upon the occurrence of a change in control unless the awards are not assumed by the acquiror.
▪No Evergreen Provision. There is no “evergreen” or automatic replenishment provision pursuant to which the shares authorized for issuance under the 2018 Plan are automatically replenished.
▪No Automatic Grants. The 2018 Plan does not provide for automatic grants to any participant.
▪Limits on Awards to Non-Employee Directors. The 2018 Plan provides for a limit on awards granted to non-employee Directors in any consecutive 12-month period equal to $700,000 for both cash and equity-based awards.
▪No Dividends Paid Out on Unearned Awards. The 2018 Plan explicitly prohibits the payment of any dividends and dividend equivalents unless and until the underlying award is vested or settled.
▪Minimum 12-month Vesting Period for Equity Awards. All equity awards under the 2018 Plan must be granted subject to a minimum vesting period of at least 12 months, subject to limited exceptions described on page 79.
▪Clawback. As more fully described in the Compensation Discussion & Analysis section of this proxy statement, we have a Clawback Policy with respect to the forfeiture of equity incentive awards. In addition, we have the right to provide, in the terms of the awards made under the 2018 Plan, that any proceeds, gains or other economic benefit must be paid to the Company under certain circumstances (which include unlawful and/or fraudulent activity) and that the award will terminate and be forfeited.
▪Minimum Stock Ownership Requirements. We mandate robust minimum stock ownership requirements for both executive officers and our Independent Directors (see pages 19 and 50 of this proxy statement).▪No Hedging or Pledging under Trading Plan. As more fully described in the Compensation Discussion and Analysis section of this proxy statement, we maintain trading policies that prohibit hedging or pledging of Company securities by all employees and Directors.
Summary of the 2018 Plan
The text of the 2018 Plan is set forth in Annex B to this proxy statement, and the description of the 2018 Plan set forth herein is qualified in its entirety by reference to the text of the 2018 Plan. We refer to the original 2018 Long-Term Incentive Plan approved by stockholders in 2018 herein as the "Prior 2018 Plan".
Purpose. The purposes of the 2018 Plan are to provide long-term incentives to those individuals with significant responsibility for the success and growth of the Company and its affiliates, to align the interests of such individuals with those of the Company’s stockholders, to assist the Company in recruiting, retaining and motivating qualified employees and other service providers and to provide an effective means to link pay to performance for such employees and service providers.
Plan Administration. The Compensation Committee administers the 2018 Plan. Unless otherwise determined by the Board, the Compensation Committee consists of not fewer than two "independent directors" under NYSE rules, each of whom must also qualify as a non-employee director as defined by Rule 16b-3 of the Securities Exchange Act of 1934, as amended. To the extent permitted by applicable law or the rules of any applicable securities exchange, the Board or the Compensation Committee may from time to time delegate to a committee of one or more members of the Board or to one or more officers of the Company the authority to grant or amend awards or to take other administrative
actions. Any delegation is subject to the restrictions and limits that the Board or Compensation Committee specifies at the time of such delegation.
Under the 2018 Plan, the Compensation Committee has the authority to, among other things:
▪interpret the 2018 Plan and its award agreements;
▪make rules and regulations relating to the administration of the 2018 Plan;
▪designate eligible persons to receive awards;
▪determine the type and number of awards to be granted;
▪establish the terms and conditions of awards; and
▪determine whether the awards or any portion of an award will contain time-based restrictions and/or performance-based restrictions, and, with respect to performance-based awards, the criteria for achievement of performance goals, as set forth in more detail below.
The Compensation Committee generally designates those employees, consultants and non-employee directors eligible to participate in the 2018 Plan.
Eligibility. The Compensation Committee, in its sole discretion may designate those employees, non-employee directors and consultants eligible to whom one or more awards will be granted and will determine the nature and amount of each award. As of February 28, 2023, we had approximately 8,575 employees (including 8 executive officers) and 11 non-employee directors who would be eligible to receive awards under the 2018 Plan. Consultants, including independent sales agents, would also be eligible to receive awards under the 2018 Plan.
During 2022, we granted equity awards under the 2018 Plan to 12 executive officers and 10 non-employee directors, 43 employees and 2 consultants.
As of February 28, 2023, approximately 88 participants held outstanding equity awards under the Current Plan or one of our prior equity plans.
Shares Authorized. Upon approval of the 2018 Plan, we will have approximately 5.0 million shares available for future issuance under the plan, comprised of 5,500 shares available for issuance under the Current Plan as of February 28, 2023 (without giving effect to the amendments described in this proposal) plus the 5.0 million shares which will become authorized for issuance upon such approval.
The number of shares that are subject to or underlie awards which expire or are cancelled or forfeited under the Current Plan (and, as permitted by the Current Plan, the Prior 2018 Plan and 2012 Plan) following the effective date of the 2018 Plan will be added to the 2018 Plan’s share reserve, except for shares surrendered or withheld as payment of either the exercise price of an award and/or withholding taxes in respect of such an award under the Current Plan, Prior 2018 Plan or 2012 Plan, each such share referred to in this paragraph as a forfeited share. Forfeited shares will be reincorporated into the 2018 Plan as one share for every one forfeited share.
The share reserve is subject to adjustment in the event of a merger, recapitalization, stock split, reorganization or similar transaction.
Any unexercised, unconverted or undistributed portion of any award that is not paid in connection with the settlement of an award or is forfeited without the issuance of shares will again be available for grant under the 2018 Plan, but shares surrendered or withheld as payment of either exercise price and/or withholding taxes or shares purchased in the open market with option exercise proceeds will not be available for further grant.
Director Share Limits. Non-employee Directors may not be granted awards in any consecutive 12-month period that exceed $700,000 (for share-based awards, based upon the grant date fair value of the awards).
Minimum Vesting. All equity awards will be granted subject to a minimum vesting period of at least 12 months, provided, that the following may be granted without the minimum vesting period requirement:
▪up to 5% of the shares initially available under the 2018 Plan;
▪awards granted in connection with the Company’s acquisition of another corporation;
▪the treatment of the awards upon a change in control; and
▪the treatment of the awards upon certain terminations of employment.
Change in Control. The 2018 Plan provides that, unless otherwise determined by the Board and/or evidenced in an award agreement, in the event of a change in control (as defined in the 2018 Plan):
▪for performance awards, immediately prior to the change in control, (1) the performance goals subject to each outstanding performance award will be deemed to be achieved at the actual level
of performance, (2) the performance award will cease to be subject to the achievement of the performance goals and (3) the performance award will vest in full at the end of the performance period, subject to continued employment; and
▪with respect to each outstanding award that is assumed or substituted in connection with a change in control, if within twenty-four months following such change in control, a participant's employment or service is terminated for any of the reasons described below, all of the participant's outstanding equity awards which have not yet vested will immediately vest and become exercisable and all restrictions on such awards will immediately lapse. An award is deemed to have been assumed or substituted if the new award:
◦is based on shares of common stock that are traded on an established U.S. securities market;
◦has comparable value to that of the original award; and
◦has terms and conditions that were applicable to the original award immediately before the change in control.
The reasons for termination that will trigger an acceleration are:
▪termination by the Company, for any reason other than for Cause (as defined in the 2018 Plan); or
▪termination by the participant for Good Reason (as defined in the 2018 Plan).
Amendment and Termination. The 2018 Plan will terminate by its terms on February 27, 2033. However, our Board may at any time terminate, suspend or discontinue the 2018 Plan. Our Board may amend the 2018 Plan at any time, provided that any increase in the number of shares available for issuance under the 2018 Plan must be approved by our stockholders. In addition, our Board may not, without stockholder approval, extend the term of the 2018 Plan, materially expand the types of awards available under the 2018 Plan, add a category or categories of individuals who are eligible to participate in the 2018 Plan, limit any prohibition against re-pricing options or stock appreciation rights, or make any other changes that require approval by stockholders in order to comply with applicable laws or stock market rules. No amendment or termination of the 2018 Plan may adversely change a participant’s rights under an outstanding award without the participant’s prior written consent.
Types of Awards under the 2018Plan
The 2018 Plan provides for the grant of stock options (including non-qualified stock options and incentive stock options), restricted stock, restricted stock units, performance awards (which include, but are not limited to, cash awards), dividend equivalents, stock payment awards, stock appreciation rights, and other incentive awards.
Options. Options to purchase shares of common stock may be granted alone or in tandem with stock appreciation rights. A stock option may be granted in the form of a non-qualified stock option or an incentive stock option. No incentive stock options will be granted to any person who is not one of our employees. The price at which a share may be purchased under an option (the exercise price) will be determined by the Compensation Committee, but may not be less than the fair market value of our common stock on the date the option is granted (or, as to incentive stock options granted to a greater than 10% stockholder, 110% of the fair market value). Except in the case of an adjustment related to a corporate transaction, the exercise price of a stock option may not be decreased after the date of grant and no outstanding option may be surrendered as consideration for the grant of a new option with a lower exercise price without stockholder approval. The award agreement sets forth the terms and conditions of each option. The amount of incentive stock options that become exercisable for the first time in a particular year cannot exceed a value of $100,000 per participant, determined using the fair market value of the shares on the date of grant.
Stock Appreciation Rights. Stock appreciation rights, or SARs, may be granted either alone or in tandem with stock options. The exercise price of a SAR must be equal to or greater than the fair market value of our common stock on the date of grant. The award agreement sets forth the terms and conditions of each SAR.
Restricted Stock/Restricted Stock Units. Restricted stock and restricted stock units may be awarded to eligible participants. The terms and conditions on such awards are set forth in the award agreement which may include time-based, performance-based, and service-based restrictions. Restricted stock units may be settled in cash, shares of common stock or a combination of the two. During the restriction period, holders of restricted stock have the right to vote the shares and to receive dividends and other distributions, provided, however, that any such dividends will be (i) credited by us to an account for the participant and accumulated without interest until the date upon which the underlying award
becomes vested and (ii) reconveyed to us without further consideration or any act or action by the participant if for any reason the underlying award is cancelled, terminated, forfeited or fails to vest. In no event will dividends and other distributions be paid or distributed with respect to shares of restricted stock until the vesting restrictions of the underlying award lapse.
Performance Awards. Performance awards may be issued to any eligible participants. The value of performance awards may be linked to performance goals, or to other specific criteria determined by the 2018 Plan administrator (which may include the Compensation Committee). Performance awards may be paid in cash, shares, or a combination of both. Without limiting the generality of the foregoing, performance awards may be granted in the form of a cash bonus payable upon the attainment of one or more objective performance goals or such other criteria as are established by the 2018 Plan administrator.
Performance goals may be expressed in terms of our overall performance or the performance of an affiliate, or one or more divisions or business units, or the performance of the applicable industry or other benchmarks. In addition, such performance goals may be based upon the attainment of specified levels of performance under one or more measures relative to the performance of other corporations, including those in the Company's peer group. Further, the Compensation Committee, in its sole discretion, may provide objectively determinable adjustments be made to one or more of the performance goals.
Dividend Equivalents. Dividend equivalents may be granted either alone or in tandem with other awards (except for options or stock appreciation rights). Dividend equivalent awards are based on the dividends that are declared on the common stock, to be credited as of the dividend payment dates during the period between the date that the dividend equivalent awards are granted and such dates that the dividend equivalent awards terminate or expire.
Dividend equivalents with respect to shares covered by an award will be (i) subject to the same vesting requirements, settlement provisions, and other terms and conditions as the underlying award to which they relate, (ii) only paid or distributed to a participant at the same time or times and to the same extent that the vesting conditions, if any, are subsequently satisfied and the award vests with respect to such shares, and (iii) reconveyed to us without further consideration or any act or action by the participant if for any reason the underlying award is canceled,
terminated, forfeited or fails to vest. In no event will any dividend equivalents be paid or distributed until the vesting restrictions of the underlying award lapse.
Stock Payment Awards. Stock payments may be granted to eligible participants. The number of shares of any stock payment may be based upon performance goals or any other specific criteria.
Other Incentive Awards. Other incentive awards may be granted to eligible participants. Such other incentive awards may cover shares or the right to purchase shares or have a value derived from the value of, or an exercise or conversion privilege at a price related to, or otherwise payable in or based on shares, stockholder value, or stockholder return. Other incentive awards may be linked to any one or more of the performance criteria or other specific performance criteria and may be paid in cash or shares.
Forfeiture and Recoupment Provisions. Pursuant to the Company’s general authority to determine the terms and conditions applicable to awards under the 2018 Plan, the plan administrator has the right to provide, in the terms of awards made under the 2018 Plan, or to require a participant to agree by separate written or electronic instrument, that any proceeds, gains or other economic benefit must be paid to the Company and the award will terminate and any unexercised portion of the award (whether or not vested) will be forfeited, in either case, if:
▪a termination of employment or other service occurs prior to a specified date, or within a specified time period following receipt or exercise of the award;
▪the participant at any time, or during a specified time period, engages in any activity which violates any applicable restrictive covenants of the Company, as may be further specified in an award agreement;
▪the participant incurs a termination of employment or other service for Cause; or
▪the participant at any time engages in unlawful and/or fraudulent activity or an activity which constitutes a breach of the Company’s Code of Conduct policy as in effect from time to time or a breach of the participant’s employment agreement, as may be further specified in an award agreement.
In addition, all awards are subject to any clawback or recoupment policies of the Company, as in effect from time to time, or as otherwise required by law.
New Plan Benefits
Awards under the 2018 Plan will depend on a number of factors, including the fair market value of our common stock on future dates and the exercise decisions made by the participant. While future benefits under the 2018 Plan will be made at the discretion of the Compensation Committee, the table below shows, as to our named executive officers and the other individuals and groups indicated, the number of shares of Company stock underlying the awards of restricted stock units contemplated under
the 2018 Plan through May 3, 2023, subject to stockholder approval of the 2018 Plan.
In the event that the 2018 Plan is not approved by the stockholders, the awards set forth on the table below will be canceled automatically. In such case, the Compensation Committee will consider what other actions, if any, it may take in order to appropriately compensate the individuals below.
| | | | | | | | | | | | | Name and Position | Dollar Values ($) | Number of Shares | Ryan M. Schneider, CEO and President | — | | — | | | Charlotte C. Simonelli, EVP, CFO and Treasurer | — | | — | | | Melissa McSherry, EVP and Chief Operating Officer | — | | — | | | Marilyn J. Wasser, EVP, GC and Corporate Secretary | — | | — | | | Susan Yannaccone, President & CEO, Anywhere Brands and Advisors | — | | — | | | | Non-Employee Director Group (11 persons) | 1,760,000 | | | (1) | | Other Executive Officer Group (3 persons) | 248,970 | | 43,000 | | (2) | | Employees (other than executive officers) Group | — | | — | | | | Total | 2,008,970 | | 43,000 | | |
______________(1)Number of shares not yet determinable. Represents portion of annual Director retainer ($160,000) to be paid in restricted stock units to 11 Non-Employee Directors. The number of shares will be determined on the date of the grant (the date of the 2023 Annual Meeting) based upon the closing sale price of our common stock on that date.
(2)For the Other Executive Officer Group, includes a restricted stock unit award for one executive officer.
Securities Authorized for Issuance under Equity Compensation Plans
The following tables provide information about shares of our common stock that may be issued upon the exercise of options, that may vest pursuant to awards of restricted stock units or performance share units or that may be issued under deferred stock units under all of our existing equity compensation plans as of December 31, 2022 and after giving effect to the 2023 year-to-date grants, as of the close of business on February 28, 2023.
As of December 31, 2022: | | | | | | | | | | | | | | | | | | | | | | | | | Plan Category | | Number of Securities to be Issued Upon Exercise or Vesting of Outstanding Options, Warrants and Rights | | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans | | | Equity compensation plans approved by stockholders | | 7,641,108 | | (1) | $24.42 | (2) | 3,445,302 | | (3) | | Equity compensation plan not approved by stockholders | | 261,234 | | (4) | $32.80 | | — | | |
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(1)Consists of 1,944,532 outstanding options, 1,651,487 stock-settled restricted stock units, 3,821,248 performance share units and 223,841 deferred stock units issuable under the Current Plan, Prior 2018 Plan and 2012 Plan. The amount set forth in the table assumes maximum payout under the unvested performance share unit awards. The number of shares, if any, to be issued pursuant to unvested performance share unit awards will be determined based upon the extent to which the performance goals are achieved.
(2)Weighted average exercise price of outstanding options under the Current Plan, the Prior 2018 Plan and the 2012 Plan. The weighted average remaining term of outstanding options is 3.9 years. The other outstanding awards do not have exercise prices and are accordingly excluded from this column.
(3)Consists of shares available for future grant under the Current Plan.
(4)Consists of options granted to Mr. Schneider on October 23, 2017 as an inducement material to his entry into employment with us, which were approved by our Compensation Committee and disclosed in a press release. Under applicable NYSE Listing Rules, inducement grants are not subject to security holder approval. The terms of this award are materially consistent with the terms of awards made under the 2018 Plan. The options expire ten years from the grant date and vest over a four-year period, in equal annual installments on each anniversary date of the grant date.
As of Close of Business on February 28, 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | Plan Category | | Number of Securities to be Issued Upon Exercise or Vesting of Outstanding Options, Warrants and Rights | | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans | | | Equity compensation plans approved by stockholders | | 9,904,788 | | (1) | $23.75 | (2) | 5,479 | | (3) | | Equity compensation plan not approved by stockholders | | 261,234 | | (4) | $32.80 | | — | | |
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(1)Consists of 1,765,998 outstanding options, 2,633,901 stock-settled restricted stock units, 5,281,048 performance share units and 223,841 deferred stock units issuable under the Current Plan, the Prior 2018 Plan and the 2012 Plan. The amount set forth in the table assumes maximum payout under the unvested performance share unit awards. The number of shares, if any, to be issued pursuant to unvested performance share unit awards will be determined based upon the extent to which the performance goals are achieved.
(2)Weighted average exercise price of outstanding options under the Current Plan, the Prior 2018 Plan and the 2012 Plan. The weighted average remaining term of outstanding options is 3.9 years. The other outstanding awards do not have exercise prices and are accordingly excluded from this column.
(3)Consists of shares available for future grant under the Current Plan.
(4)See footnote 4 to the table presented as of December 31, 2022 for additional information concerning the inducement option award granted to Mr. Schneider on October 23, 2017 under applicable NYSE Listing Rules.
Certain Federal Income Tax Consequences
The following discussion addresses only the general federal income tax consequences relating to participation under the 2018 Plan. It does not purport to be a complete description of all applicable rules, and those rules (including those summarized here) are subject to change. Further, the summary below does not address the impact of state and local taxes, or the federal alternative minimum tax and is not intended as tax advice to participants under the 2018 Plan.
Non-Qualified Stock Options.A participant who has been granted a non-qualified stock option will not realize taxable income at the time of grant, and we will not be entitled to a tax deduction at that time. In general, when the option is exercised, the participant will realize ordinary income in an amount equal to the excess of the fair market value of the acquired shares over the exercise price for those shares, and we generally will be entitled to a corresponding tax deduction. Any gains or losses realized by the participant upon disposition of the shares will be treated as capital gains or losses, and the
participant’s basis in such shares will be equal to the fair market value of the shares at the time of exercise.
Incentive Stock Options.A participant who has been granted an incentive stock option will not realize taxable income at the time of grant, and we will not be entitled to a tax deduction at that time. The exercise of an incentive stock option will not result in taxable income to the participant provided that the participant was, without a break in service, an employee of us or a subsidiary during the period beginning on the date of the grant of the option and ending on the date three months prior to the date of exercise (one year prior to the date of exercise if the participant is disabled). The excess of the fair market value of the shares at the time of the exercise of an incentive stock option over the exercise price is included in calculating the participant’s alternative minimum taxable income for the tax year in which the incentive stock option is exercised unless the participant disposes of the shares in the year of exercise. If the participant does not sell or otherwise dispose of the shares within two years from the date of the grant of the incentive stock option or within one year after the
transfer of such shares to the participant, then, upon disposition of such shares, any amount realized in excess of the exercise price will be taxed to the participant as capital gain and we will not be entitled to a corresponding tax deduction. The participant will generally recognize a capital loss to the extent that the amount realized is less than the exercise price. If the foregoing holding period requirements are not met, the participant will generally realize ordinary income at the time of the disposition of the shares in an amount equal to the lesser of (i) the excess of the fair market value of the shares on the date of exercise over the exercise price or (ii) the excess, if any, of the amount realized upon disposition of the shares over the exercise price, and we generally will be entitled to a corresponding tax deduction. Any amount realized in excess of the value of the shares on the date of exercise will be capital gain. If the amount realized is less than the exercise price, the participant will not recognize ordinary income, and the participant will generally recognize a capital loss equal to the excess of the exercise price over the amount realized upon the disposition of the shares.
Stock Appreciation Rights. A participant who has been granted a SAR will not realize taxable income at the time of the grant, and we will not be entitled to a tax deduction at that time. Upon the exercise of a SAR, the amount of cash or the fair market value of any shares received will be taxable to the participant as ordinary income and we generally will be entitled to a corresponding tax deduction. Any gains or losses realized by the participant upon disposition of any such shares will be treated as capital gains or losses, and the participant’s basis in such shares will be equal to the fair market value of the shares at the time of exercise.
Restricted Stock Units. A participant who has been granted a restricted stock unit award will not realize taxable income at the time of grant and we will not be entitled to a tax deduction at that time. The participant will generally have compensation income at the time of settlement equal to the amount of cash received and the then fair market value of the distributed shares, and will have a tax basis in the shares equal to the amount of compensation income recognized. We generally will then be entitled to a corresponding tax deduction.
Restricted Stock.In general, a participant who has been granted a restricted stock award will not realize taxable income at the time of grant and we will not be entitled to a tax deduction at that time, assuming that the shares are not transferable and that the restrictions create a “substantial risk of forfeiture” for federal income tax purposes. Upon the vesting of the shares subject to an award, the participant will realize ordinary income in an amount equal to the then fair market value of the shares, and we generally will be entitled to a corresponding tax deduction. Any gains or losses realized by the participant upon disposition of such shares will be treated as capital gains or losses, and the participant’s basis in such shares will be equal to the fair market value of the shares at the time of vesting. A participant may elect, pursuant to Section 83(b) of the Code, to have income recognized at the date of grant of a restricted stock award and to have the applicable capital gain holding period commence as of that date. If a participant makes this election, we generally will be entitled to a corresponding tax deduction in the year of grant. If the participant does not make an election pursuant to Section 83(b) of the Code, dividends paid to the participant during the restriction period will be treated as compensation income to the participant and we generally will be entitled to a corresponding tax deduction.
Performance Awards; Dividend Equivalent Awards; Stock Payment Awards; Other Incentive Awards.With respect to these types of awards, a participant generally will not recognize taxable income until the cash or shares of common stock are delivered to the participant upon satisfaction of the conditions of the award, and we generally will be entitled to a corresponding tax deduction. The amount of ordinary income recognized by the participant generally will be equal to the amount of the cash or the fair market value of the shares received.
Approval of the 2018 Plan requires the affirmative vote of the holders of a majority of the shares represented at the Annual Meeting in person or by proxy and entitled to vote on the proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
APPROVAL OF THE SECOND AMENDED AND RESTATED 2018 LONG-TERM INCENTIVE PLAN
PROPOSAL 5: APPROVAL OF THE AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO LIMIT THE LIABILITY OF CERTAIN OFFICERS OF THE COMPANY
The Board, after careful consideration, recommends that our stockholders approve an amendment to Article IX to our Certificate of Incorporation to limit the liability of certain officers of the Company, as described in this Proposal 5 and as shown in Annex C (the “Amendment”).
Effective August 1, 2022, Section 102(b)(7) of the General Corporation Law of the State of Delaware “DGCL”) was amended to enable Delaware companies to limit monetary liability for certain corporate officers for breach of the duty of care in certain actions in a manner similar to that already permitted for company directors.
The Amendment would allow for the exculpation of certain officers only in connection with certain claims brought by stockholders, but importantly would not eliminate officers’ liability for any: (i) breach of the duty of loyalty to the Company or its stockholders; (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or (iii) transaction from which the officer derived any improper personal benefit. Additionally, officers would not be exculpated from liability arising out of actions by or in the name of the Company – which means that the Board will retain the right to bring appropriate actions against officers and that stockholder derivative claims against officers for breach of the duty of care may continue to be brought if demand requirements are met.
The Board believes that amending our Certificate of Incorporation to add the authorized liability protection for such officers in a manner consistent with the DGCL is in the best interests of the Company and will be important to the recruitment and retention of experienced officers. Further, the Board believes that the Amendment would not negatively impact stockholder rights, particularly taking into account the narrow class and type of claims for which officers’ liability would be exculpated.
The form of amendment to Article IX of our Certificate of Incorporation, marked to show the proposed changes to the existing Article IX is attached as Annex C.
If the Amendment is approved, it will become effective upon the filing of an Amended and Restated Certificate of Incorporation with the Delaware Secretary of State, which we intend to do promptly following the Annual Meeting. If the Amendment is not approved by stockholders, it will not be implemented.
The Amendment requires approval by the affirmative vote of the holders of a majority of the voting power of all shares of the Company entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO LIMIT THE LIABILITY OF CERTAIN OFFICERS OF THE COMPANY
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR Proxy Access Nominations for 20242025 Annual Meeting Our Bylaws permit a stockholder, or a group of up to 20 stockholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of 2 nominees or 20% of the Board, provided that the stockholder(s) and the director nominee(s) satisfy the requirements specified in our Bylaws. Eligible stockholders who wish to have a director nominee included in our proxy statement relating to the annual meeting of stockholders to be held in 20242025 must deliver a written notice, containing the information specified in our Bylaws regarding the stockholder(s) and the proposed nominee(s), to us by November 18, 2023,20, 2024, but not before October 19, 2023,23, 2024, which is not less than 120 days nor more than 150 days prior to March 17, 2024,19, 2025, the first anniversary of the date that we first distributed our proxy statement to stockholders for the 20232024 Annual Meeting. The requirements for a stockholder nomination using proxy access are more fully set forth in Section 2.12 of our Bylaws, and the foregoing summary is qualified by reference to the applicable provisions of our Bylaws. Our Bylaws have been filed as an exhibit to our Annual Report on Form 10-K filed on February 24,20, 2023. A stockholder may also obtain a copy of our Bylaws by writing to our Corporate Secretary. Other Stockholder Proposals to be Included in the 20242025 Proxy Statement Stockholders interested in presenting a proposal for inclusion in our proxy statement and proxy relating to our 20242025 Annual Meeting of Stockholders may do so by following the procedures prescribed in Rule 14a-8 under the Securities Exchange Act of 1934, as amended. To be eligible for inclusion in next year's proxy statement, stockholder proposals must be received by the Corporate Secretary at our principal executive offices no later than the close of business on November 18, 2023.20, 2024. Other Stockholder Proposals and Director Nominations to be Brought Before the 20242025 Annual Meeting Our Bylaws establish an advance notice procedure for stockholder proposals (including nominations to the Board) to be considered at next year's annual meeting, but not included in the proxy statement. Such proposals must be submitted in writing to and received by the Corporate Secretary at our principal executive offices not earlier than January 4, 20243, 2025, and not later than February 3, 2024.2, 2025. However, if the date of the 2024 Annual Meeting is more than 30 days before or more than 60 days after May 3, 2024,2, 2025, then a stockholder will be able to submit a proposal for consideration at the annual meeting not earlier than the close of business on the 120th day prior to the date of the 2024 Annual Meeting and not later than the close of business on the later of the 90th day prior to the date of such annual meeting or, if the first public announcement of the date of the 20242025 Annual Meeting is less than 100 days prior to the date of such meeting, not later than the close of business on the 10th day following the day on which public disclosure of the date of the annual meeting was made. Any notification to bring any proposal before the 20242025 Annual Meeting must comply with the requirements of our Bylaws, including information specified therein concerning the nominee or proposal, as the case may be, and information about the stockholder’s ownership of and agreements related to our stock. In addition, to satisfying the foregoing advance notice and informational requirements under our Bylaws, to comply with the universal proxy rules under the Exchange Act, stockholders who intend to solicit proxies in support of director nominees other than the Company’scompany’s nominees must provide notice tocomply with the Company that sets forth the information required byadditional requirements of Rule 14a-19 under the Securities Exchange Act of 1934, as amended no later than March 4, 2024.
FREQUENTLY ASKED QUESTIONS Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials? We provide access to our proxy materials over the Internet. On or about March 17, 2023,19, 2024, we will begin mailing to our stockholders a "Notice of Internet Availability of Proxy Materials" (the "Notice") telling them how to access and review the information contained in the proxy materials and how to vote their proxies over the Internet. You will not receive a printed copy of the proxy materials in the mail unless you request the materials by following the instructions included in the Notice. In addition, by following the instructions included in the Notice, stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis. Your election to receive proxy materials in printed form by mail or by e-mail will remain in effect until you terminate it. How can I get electronic access to the proxy materials? The Notice will provide you with instructions regarding how to view our proxy materials on the Internet. You can view the proxy materials for the Annual Meeting on the Internet at www.proxyvote.com. Our proxy materials are also available on the Investors section of our website at www.anywhere.re. When and where will the Annual Meeting be held? The Annual Meeting will be held on May 3, 20232, 2024, at 9:00 a.m., Eastern Daylight Time, in a virtual-only format. Any stockholder as of the record date can attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/HOUS2023HOUS2024 We encourage you to access the Annual Meeting online prior to its start time. Online access will open approximately 15 minutes prior to the start of the Annual Meeting. How do I attend the Annual Meeting? To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/HOUS2023,HOUS2024, which we call the Annual Meeting Website, you must enter the 16-digit control number on your proxy card, voting instruction form or Notice of Internet Availability you previously received. If you wish to submit a question during the Annual Meeting, you may do so from the Annual Meeting Website by entering your question at the applicable place and clicking “submit.” We will answer questions relevant to meeting matters that comply with the meeting rules of conduct during the Annual Meeting, subject to time constraints. You also may vote online and examine our stockholder list during the Annual Meeting by following the instructions provided on the Annual Meeting Website. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the log in page to the Annual Meeting Website. What am I being asked to vote on at the Annual Meeting? You are being asked to vote on the following: ▪the election of twelvethirteen Directors for a one-year term; ▪the advisory approval of our executive compensation program; ▪the ratification of the appointment of PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for fiscal year 2023; ▪to vote on a proposal to approve the Second Amended and Restated 2018 Long-Term Incentive Plan;
▪to vote on a proposal to amend our Certificate of Incorporation to limit the liability of certain officers of the Company;2024; and
▪to transact any other business that may be properly brought before the Annual Meeting or any adjournment or postponement of the Annual Meeting. We are not aware of any other matters that will be brought before the stockholders for a vote at the Annual Meeting. If any other matters are properly presented for a vote, the individuals named as proxies will have discretionary authority, to the extent permitted by law, to vote on such matters according to their best judgment.
How does the Board recommend that I vote? The Board recommends the following votes: ▪FOR the election of each of the Director nominees; ▪FOR the advisory vote to approve our executive compensation program; and ▪FOR the ratification of the appointment of PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for fiscal year 2023; ▪FOR the proposal to approve the Second Amended and Restated 2018 Long-Term Incentive Plan; and
▪FOR the proposal to approve the amendment of our Certificate of Incorporation to limit the liability of certain officers of the Company.2024.
How do I vote? Even if you plan to attend the Annual Meeting, you are encouraged to vote by proxy. If you are a stockholder of record, also known as a registered stockholder, you may vote by proxy in one of the following ways: ▪by telephone by calling the toll-free number 800-690-6903 (have your Notice or proxy card in hand when you call); ▪by Internet before the Annual Meeting at www.proxyvote.com (have your Notice or proxy card in hand when you access the website); ▪by mail if you have requested and received a printed copy of the annual meeting materials, by returning the enclosed proxy card (signed and dated) in the envelope provided; or ▪by Internet during the Annual Meeting (please see above under "How do I attend the Annual Meeting?"). When you vote by proxy, your shares will be voted according to your instructions. If you sign your proxy card, vote by Internet or by telephone, but do not specify how you want your shares to be voted, they will be voted as the Board recommends. Our proxy tabulator, Broadridge Financial Solutions, Inc., must receive any proxy that will not be delivered by Internet during the Annual Meeting by 11:59 p.m., Eastern Daylight Time on Tuesday,Wednesday, May 2, 2023.1, 2024. If your shares are registered in the name of a bank, broker or other nominee, follow the proxy instructions on the form you receive from the bank, broker or other nominee. You may also vote by Internet during the Annual Meeting by following the instructions provided at www.virtualshareholdermeeting.com/HOUS2023.HOUS2024. Have your Notice, proxy card or voting instruction form available when you access the Annual Meeting Website. Who may vote and how many votes does a stockholder have? All holders of record of our common stock as of the close of business on March 8, 20236, 2024, (the record date) are entitled to vote at the Annual Meeting. Each stockholder will have one vote for each share of our common stock held as of the close of business on the record date. As of the record date, 110,346,549111,085,164 shares of our common stock were outstanding. There is no cumulative voting and the holders of our common stock vote together as a single class. How many votes must be present to hold the Annual Meeting? The holders of a majority of the outstanding shares of our common stock entitled to vote at the Annual Meeting (also known as a quorum) must be present, in person or by proxy, at the meeting in order to constitute a quorum necessary to conduct the meeting. Abstentions and broker non-votes will be counted for the purposes of establishing a quorum at the Annual Meeting. We urge you to vote by proxy even if you plan to attend the Annual Meeting so that we will know as soon as possible that a quorum has been achieved. A broker non-vote occurs when a broker or other nominee submits a proxy that states that the broker does not vote for some or all of the proposals because the broker has not received instructions from the beneficial owner on how to vote on the proposals and does not have discretionary authority to vote in the absence of instructions. How many votes are required to approve each proposal? Election of Directors (Proposal 1): The election of Directors at the Annual Meeting requires the affirmative vote of a majority of the votes cast with respect to a Director nominee to elect that nominee. This means that the number of votes cast "for" each Director nominee must exceed the number of votes cast "against" that nominee. Any abstentions or broker non-votes are not counted as votes cast "for" or "against" that nominee's election and will have no effect on the election of Directors. (A plurality voting
standard would apply in the event of a contested Director election.) For information on our Board's Director Resignation Policy, see "Proposal"Proposal 1: Election of Directors—Stockholder Voting for Election of Directors"Directors" on page 2631.
Advisory Vote on Executive Compensation (Proposal 2): As this agenda item is a non-binding, advisory vote, there is no "required vote" that would constitute approval. We value the opinions expressed by our stockholders in these advisory votes, and our Compensation and Talent Management Committee, which is responsible for overseeing and administering our executive compensation programs, will consider the outcome of these votes when designing our compensation programs and making future compensation decisions for our named executive officers. Abstentions and broker non-votes will have no effect on the outcome of this proposal. Ratification of Independent Auditor (Proposal 3)and Approval of the Amended and Restated 2018 Long-Term Incentive Plan (Proposal 4)): These proposals requireThis proposal requires the affirmative vote of the holders of a majority of the shares represented at the Annual Meeting in person or by proxy and entitled to vote on the proposal for approval. Amendment of Certificate of Incorporation (Proposal 5): This proposal requires the affirmative vote of the holders of a majority of the voting power of all shares of the Company entitled to vote at the Annual Meeting.
Abstentions will have the effect of a vote "against" Proposals 3, 4 and 5.Proposal 3. Broker non-votes will have no effect on the outcome of Proposals 3 and 4. Broker non-votes will have the same effect as votes cast "against" Proposal 5.3. Will my shares be voted if I do not return my proxy? If your shares are registered directly in your name, your shares will not be voted if you do not vote before the Annual Meeting via the Internet, by telephone, or by returning your proxy or via the Internet during the Annual Meeting. If your shares are registered in the name of a bank, broker or other nominee and you do not give your broker or other nominee specific voting instructions for your shares, under rules of The New York Stock Exchange, or the NYSE, your record holder has discretion to vote your shares on proposals relating to what are deemed to be routine matters, which include the ratification of our independent auditor, and does not have discretion to vote on proposals relating to what are deemed to be non-routine matters, which include the other matters to be presented for vote at the Annual Meeting. Your broker will not be permitted to vote on your behalf on these non-routine matters unless you provide specific instructions by completing and returning the voting instruction or proxy card or following the instructions provided to you to vote your shares by telephone or the Internet. For your vote to be counted, you will need to communicate your voting decisions to your broker, bank or other financial institution before the date of the Annual Meeting. Can I change or revoke my vote? You may change or revoke your proxy at any time prior to the voting at the Annual Meeting by submitting a later dated proxy, by entering new instructions by Internet or telephone, by giving timely written notice of such change or revocation to the Corporate Secretary or by attending and voting by Internet during the Annual Meeting. How are proxies solicited? Morrow Sodali LLC has been retained to advise and assist in soliciting proxies at a cost of $8,000 plus reasonable expenses. Proxies may also be solicited by our Directors, officers and employees personally, by mail, phone or electronic means. We will pay all costs relating to the solicitation of proxies. We will also reimburse brokers, custodians, nominees and fiduciaries for reasonable expenses in forwarding proxy materials to beneficial owners of our stock. What is "householding"? We have adopted a procedure approved by the Securities and Exchange Commission, or SEC, called householding. Under this procedure, stockholders of record who have the same address and have not previously requested electronic delivery of proxy materials will receive a single envelope containing the Notice (or, if applicable, the proxy statement and annual report) for each holder having that address. This procedure will reduce our printing costs and postage fees. If, in the future, you do not wish to participate in householding and prefer to receive your Notice (or, if applicable, the proxy statement and annual report) in a separate envelope, please contact our transfer agent, Computershare, in writing at 462 S. 4th Street, Suite 1600, Louisville, KY 40202 or via their toll freetoll-free number (800) 962-4284. Beneficial stockholders may request information about householding from their banks, brokers or other holders of record.
ANNEX A A: NON-GAAP DEFINITIONS & RECONCILIATIONS Operating EBITDAis defined by us as net income (loss) beforeadjusted for depreciation and amortization, interest expense, net (other than(excluding relocation services interest for securitization assets and securitization obligations), income taxes, and othercertain non-core items. Non-core items that are not core to the operating activities of the Company such asinclude restructuring charges, former parent legacy items, gains or losses on the early extinguishment of debt, impairments, and gains or losses on discontinued operations and gains or losses on the sale of businesses, investments or other assets. Operating EBITDA is our primary non-GAAP measure. We present Operating EBITDA because we believe it is useful as a supplemental measure in evaluating the performance of our operating businesses and provides greater transparency into our results of operations. Our management, including our chief operating decision maker, uses Operating EBITDA as a factor in evaluating the performance of our business. Operating EBITDA should not be considered in isolation or as a substitute for net income or other statement of operations data prepared in accordance with GAAP. We believe Operating EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting net interest expense), taxation, the age and book depreciation of facilities (affecting relative depreciation expense) and the amortization of intangibles, as well as other items that are not core to the operating activities of the Company such as restructuring charges, gains or losses on the early extinguishment of debt, former parent legacy items, impairments, gains or losses on discontinued operations and gains or losses on the sale of businesses, investments or other assets, which may vary for different companies for reasons unrelated to operating performance. We further believe that Operating EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present an Operating EBITDA measure when reporting their results. Operating EBITDA has limitations as an analytical tool, and you should not consider Operating EBITDA either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations are: ▪•this measure does not reflect changes in, or cash required for, our working capital needs;
▪•this measure does not reflect our interest expense (except for interest related to our securitization obligations), or the cash requirements necessary to service interest or principal payments on our debt;
▪•this measure does not reflect our income tax expense or the cash requirements to pay our taxes;
▪•this measure does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
▪•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often require replacement in the future, and this measure does not reflect any cash requirements for such replacements; and
▪•other companies may calculate this measure differently so they may not be comparable.
Free Cash Flow is defined as net income (loss) attributable to Anywhere before income tax expense (benefit), income tax payments, interest expense, net, cash interest payments, depreciation and amortization, capital expenditures, restructuring costs and former parent legacy costs (benefits), net of payments, impairments, (gain) loss on the sale of businesses, investments or other assets, (gain) loss on the early extinguishment of debt, working capital adjustments and relocation receivables (assets), net of change in securitization obligations. We use Free Cash Flow in our internal evaluation of operating effectiveness and decisions regarding the allocation of resources, as well as measuring the Company's ability to generate cash. Since Free Cash Flow can be viewed as both a performance measure and a cash flow measure, the Company has provided a reconciliation to both net income attributable to Anywhere and net cash provided by operating activities. Free Cash Flow is not defined by GAAP and should not be considered in isolation or as an alternative to net income (loss), net cash provided by (used in) operating, investing and financing activities or other financial data prepared in accordance with GAAP or as an indicator of the Company’s operating performance or liquidity. Free Cash Flow may differ from similarly titled measures presented by other companies.
Reconciliation of Net (loss) income to (i) Operating EBITDA for the years ended December 31, 2023, 2022 2021 and 20202021 (in millions): | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2022 | | 2021 | | 2020 | | Net (loss) income attributable to Anywhere Real Estate | $ | (287) | | | $ | 343 | | | $ | (360) | | | Add: Income tax (benefit) expense | (68) | | | 133 | | | (104) | | | (Loss) income before income taxes | (355) | | | 476 | | | (464) | | | Add: Depreciation and amortization | 214 | | | 204 | | | 186 | | | Interest expense, net | 113 | | | 190 | | | 246 | | | Restructuring costs, net (a) | 32 | | | 17 | | | 67 | | | Impairments (b) | 483 | | | 4 | | | 682 | | | Former parent legacy cost, net (c) | 1 | | | 1 | | | 1 | | | Loss on the early extinguishment of debt (c) | 96 | | | 21 | | | 8 | | | Gain on the sale of businesses, investments or other assets, net (d) | (135) | | | (11) | | | — | | | Operating EBITDA | $ | 449 | | | $ | 902 | | | $ | 726 | |
_______________ | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | 2023 | | 2022 | | 2021 | | Net (loss) income attributable to Anywhere Real Estate | $ | (97) | | | $ | (287) | | | $ | 343 | | | Income tax (benefit) expense | (15) | | | (68) | | | 133 | | | (Loss) income before income taxes | (112) | | | (355) | | | 476 | | | Add: Depreciation and amortization | 196 | | | 214 | | | 204 | | | Interest expense, net | 151 | | | 113 | | | 190 | | | Restructuring costs, net (a) | 49 | | | 32 | | | 17 | | | Impairments (b) | 65 | | | 483 | | | 4 | | | Former parent legacy cost, net (c) | 18 | | | 1 | | | 1 | | | (Gain) loss on the early extinguishment of debt (c) | (169) | | | 96 | | | 21 | | | Loss (gain) on the sale of businesses, investments or other assets, net (d) | 2 | | | (135) | | | (11) | | | Operating EBITDA | $ | 200 | | | $ | 449 | | | $ | 902 | |
(a)Restructuring charges incurred for the year ended December 31, 2023, include $11 million at Anywhere Brands, $25 million at Anywhere Advisors, $4 million at Anywhere Integrated Services and $9 million at Corporate and Other. Restructuring charges incurred for the year ended December 31, 2022 include $1 million at Anywhere Brands, $19 million at Anywhere Advisors and $12 million at Corporate and Other. Restructuring charges incurred for the year ended December 31, 2021, include $5 million at Anywhere Brands, $7 million at Anywhere Advisors and $5 million at Corporate and Other. Restructuring charges incurred for the year ended December 31, 2020 include $15 million at Anywhere Brands, $37 million at Anywhere Advisors, $4 million at Anywhere Integrated Services and $11 million at Corporate and Other. (b)Non-cash impairments for the year ended December 31, 2023, include $25 million at Anywhere Brands to reduce goodwill related to Cartus, $25 million related to franchise trademarks and $15 million related to leases and other assets. Non-cash impairments for the year ended December 31, 2022, include an impairment of goodwill at the Anywhere Advisors reporting unit of $280 million an impairment of goodwill at the Anywhere Brands segment ofand $114 million related to the Cartus/Leads Group reporting unit, an impairment ofgoodwill at Anywhere Advisors and Anywhere Brands, respectively, $76 million related to franchise trademarks of $76 million and $13 million of other impairment charges related to lease asset, investmentleases and software impairments. other assets including an investment. Non-cash impairments for the year ended December 31, 2021, primarily relate to software and lease asset impairments. Non-cash impairments for the year ended December 31, 2020 include a goodwill impairment charge of $413 million related to Anywhere Advisors; an impairment charge of $30 million related to Anywhere Brands' trademarks; $133 million of reserves recorded during the nine months ended September 30, 2020 (while Cartus Relocation Services was held for sale) to reduce the net assets to the estimated proceeds; a goodwill impairment charge of $22 million related to Cartus Relocation Services; an impairment charge of $34 million related to Cartus Relocation Services' trademarks; and other asset impairments of $50 million primarily related to lease asset impairments.
(c)Former parent legacy items and Loss(Gain) loss on the early extinguishment of debt are recorded in Corporate and Other. Former parent legacy cost in 2023 relates to developments in a legacy tax matter in the first quarter of 2023. Gain on the early extinguishment of debt in 2023 relates to the debt exchange transactions and open market repurchases that occurred during the third quarter of 2023. Loss on the early extinguishment of debt in 2022 primarily relates to the refinancing transactions that occurred during the first quarter of 2022. (d)Gain on the sale of businesses, investments or other assets, net for the year ended December 31,in 2022 is recorded in Anywhere Integrated Services and is related to the sale of the Title Underwriter during the first quarter of 2022 and the salesubsequent sales of a portion of the Company's ownership in the Title Insurance Underwriter Joint Venture during the second quarter of 2022.Venture. Gain on the sale of businesses, investments or other assets, net for the year ended December 31, 2021, is primarily recorded in Anywhere Advisors.
Reconciliation of Net (loss) income to Free Cash Flow for the years ended December 31, 2023, 2022 2021 and 2020*2021 (in millions): | | | | Year Ended December 31, | | Year Ended December 31, | | 2022 | | 2021 | | 2020 | | 2023 | | | 2023 | | 2022 | | 2021 | | Net (loss) income attributable to Anywhere Real Estate | Net (loss) income attributable to Anywhere Real Estate | $ | (287) | | | $ | 343 | | | $ | (360) | | | Income tax (benefit) expense | Income tax (benefit) expense | (68) | | | 133 | | | (104) | | | Income tax payments | Income tax payments | (62) | | | (64) | | | — | | | Interest expense, net | Interest expense, net | 113 | | | 190 | | | 246 | | | Cash interest payments | Cash interest payments | (164) | | | (188) | | | (209) | | | Depreciation and amortization | Depreciation and amortization | 214 | | | 204 | | | 186 | | | Capital expenditures | Capital expenditures | (109) | | | (101) | | | (95) | | | Restructuring costs/reversals and former parent legacy items, net of payments | Restructuring costs/reversals and former parent legacy items, net of payments | 2 | | | (9) | | | 26 | | | Impairments | Impairments | 483 | | | 4 | | | 682 | | | Loss on the early extinguishment of debt | 96 | | | 21 | | | 8 | | | Gain on the sale of businesses, investments or other assets, net | (135) | | | (11) | | | — | | | (Gain) loss on the early extinguishment of debt | | | Loss (gain) on the sale of businesses, investments or other assets, net | | | Working capital adjustments | Working capital adjustments | (190) | | | 19 | | | 210 | | | Relocation receivables (assets), net of securitization obligations | Relocation receivables (assets), net of securitization obligations | (52) | | | 12 | | | (35) | | | Free Cash Flow | Free Cash Flow | $ | (159) | | | $ | 553 | | | $ | 555 | |
_______________
* Cumulative Free Cash Flow achievement for the 2020 to 2022 Performance Share Units was calculated by increasing the Free Cash Flow total for each year by the amount shown on the capital expenditures line.
Reconciliation of net cash provided by (used in) provided by operating activities to Free Cash Flow for the years ended December 31, 2023, 2022 2021 and 20202021 (in millions): | | | | Year Ended December 31, | | Year Ended December 31, | | 2022 | | 2021 | | 2020 | | Net cash (used in) provided by operating activities | $ | (92) | | | $ | 643 | | | $ | 748 | | | 2023 | | | 2023 | | 2022 | | 2021 | | Net cash provided by (used in) operating activities | | | Property and equipment additions | Property and equipment additions | (109) | | | (101) | | | (95) | | | Net change in securitization | Net change in securitization | 44 | | | 12 | | | (99) | | | Effect of exchange rates on cash and cash equivalents | Effect of exchange rates on cash and cash equivalents | (2) | | | (1) | | | 1 | | | Free Cash Flow | Free Cash Flow | $ | (159) | | | $ | 553 | | | $ | 555 | | | | Net cash used in investing activities | Net cash used in investing activities | $ | (55) | | | $ | (147) | | | $ | (90) | | | Net cash used in investing activities | | | Net cash used in investing activities | | | Net cash used in financing activities | Net cash used in financing activities | $ | (376) | | | $ | (275) | | | $ | (402) | |
DEFINITIONS OF CERTAIN COMPENSATION MEASURES Plan Operating EBITDA Definition Plan Operating EBITDA for fiscal year 20222023 is defined by us as Operating EBITDA adjusted for the impact of foreign exchange movements, pension expense, earnings/losses from RealSure and the impact of a change in the expected timing of the close of our title insurance underwriterexpenses that differsdiffer from the 2022 Budget,budget, the impact of natural disasters, (netnet of insurance reimbursements), the impact of certain legalreimbursement, revenue/EBITDA lost or expenses incurred relating to litigation, arbitration, regulatory investigations, tax audits and regulatory compliance, net of insurance reimbursement, that either exceed $1.0 million or, in the case of complex litigation matters listed in our Form 10-K for 2022, that differsdiffer from the 2022 Budget,budget, or EBITDA lost or expenses incurred to pay liability management expenses within Board oversight that differ from forecasts and other items, determined in the discretion of the Compensation Committee, including, but not limited to,such as unusual, non-recurring or extraordinary corporate transactions (including, but not limited to divestitures), unanticipated legal or regulatory developments, or changestransactions. Set forth in accounting principles provided that any adjustment due to changes in accounting principles would be made to both the Plan Operating EBITDA target goal andtable below is the calculation of Plan Operating EBITDA. As described in the Proxy Statement, the Committee determined that no funding was achievedEBITDA under the 2022 Executive Incentive Plan and determined not to make any adjustments permitted under the 2022 Executive Incentive Plan.2023 EIP (in millions):
| | | | | | | Year Ended December 31, 2023 | | Operating EBITDA | $ | 200.0 | | | Adjustment for impact of foreign exchange movements | (3.2) | | | Adjustment for pension expense that differs from 2023 budget | 3.7 | | | Adjustment for litigation (including legal reserves), arbitration, regulatory investigations, tax audits and regulatory compliance | 45.0 | | | Adjustment for CEO extraordinary achievements award | 5.0 | | | Plan Operating EBITDA | $ | 250.4 | |
Cumulative Free Cash Flow under the 20202021 to 20222023 Performance Share Units Neither the Cumulative Free Cash Flow target goal or actual achievement againstmeans free cash flow attributable to the target goal take into accountCompany for the three-year period ended December 31, 2023, (the "Performance Period") as reported in the Free Cash Flow in Table 7 to the Company’s year end earnings press releases for 2021, 2022 and 2023; provided that capital expenditures during the performance period.shall not be deducted from net income (loss). In addition, Cumulative Free Cash Flow achievement for the 20202021-2023 PSU awards was permitted to 2022be adjusted for unusual, non-recurring or extraordinary corporate transactions, events or developments or changes in accounting principles and could be increased or decreased, as appropriate, for certain items, such as those that differed from the cash amounts assumed in the forecast underlying the target, including the items reported in the table below.
Set forth in the table below is the calculation of Cumulative Free Cash Flow under the 2021-2023 Performance Share Units was calculated by increasing the Free Cash Flow total for each year shown on page A-3 by the amount shown on the capital expenditures line.(in millions): | | | | | | | Reported 2021-2023 Cumulative Free Cash Flow | $ | 743.3 | | | Adjustment for variations in securitizations | 23.2 | | | Adjustment for variations in legacy cash payments | (5.6) | | | Adjustment for variations in tax | (5.0) | | | Adjustment for variations in restructuring savings | 10.2 | | | Adjustment for cash used or revenue/EBITDA lost relating to litigation (settlement payments) | 10.0 | | | Adjustment for unusual, non-recurring or extraordinary corporate transactions: | | | Cash impact from the sale of the title underwriter in 2022 | 61.0 | | | Cash outlays from the investment in RealSure (which was not contemplated at the time the CFCF goal was established) | 23.7 | | | CEO extraordinary achievements award | 5.0 | | | Adjusted 2021-2023 Cumulative Free Cash Flow | $ | 865.8 | |
ANNEX B
ANYWHERE REAL ESTATE INC.
SECOND AMENDED AND RESTATED 2018 LONG-TERM INCENTIVE PLAN
ARTICLE I
PURPOSE
The name of the plan is the Anywhere Real Estate Inc. Second Amended and Restated 2018 Long-Term Incentive Plan, effective as of February 27, 2023 (the "Effective Date"); provided, however, that the Plan as further amended and restated shall be subject to the approval by the stockholders of the Company of the Plan at the annual meeting of such stockholders on May 3, 2023 (the “Plan”).
The purposes of the Plan are to provide long-term incentives to those individuals with significant responsibility for the success and growth of the Company and its Affiliates, to align the interests of such individuals with those of the Company's stockholders, to assist the Company in recruiting, retaining and motivating qualified employees and other service providers and to provide an effective means to link pay to performance for such employees and service providers.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.
2.1 "Administrator" shall have the meaning provided in Section 12.1 hereof.
2.2 "Affiliate" shall mean (i) any Parent or Subsidiary, (ii) any entity that, directly or through one or more intermediaries, is controlled by the Company, or (iii) any entity in which the Company has a significant equity interest, in each case as determined by the Committee.
2.3 "Applicable Accounting Standards" shall mean Generally Accepted Accounting Principles in the United States, International Financial Reporting Standards or such other accounting principles or standards as may apply to the Company's financial statements under United States federal securities laws from time to time.
2.4 "Award" shall mean an Option, a Restricted Stock award, a Restricted Stock Unit award, a Performance Award (which includes, but is not limited to, cash bonuses as set forth in Article VIII), a Dividend Equivalent award, a Stock Payment award, an award of Stock Appreciation Rights, or Other Incentive Award, which may be awarded or granted under the Plan.
2.5 "Award Agreement" shall mean the written notice, agreement, contract or other instrument or document evidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine, consistent with the Plan.
2.6 "Board" shall mean the Board of Directors of the Company.
2.7 "Cause" shall mean, with respect to the Participant, "Cause" as defined in such Participant's employment, consulting, severance or similar agreement with the Company or any of its Subsidiaries if such an agreement exists and contains a definition of Cause or, if no such agreement exists or such agreement does not contain a definition of Cause, then Cause shall mean, unless otherwise defined in an Award Agreement, (a) commission of any felony or an act of moral turpitude; (b) engaging in an act of dishonesty or willful misconduct; (c) material breach of the Participant's obligations hereunder or under any agreement entered into between the Participant and the Company or any of its Subsidiaries or Affiliates; (d) material breach of the Company's policies or procedures, including but not limited to the Company's Code of Ethics or any of the Key Policies of the Company; or (e) the Participant's willful failure to substantially perform his or her duties as an employee of the Company or any Subsidiary or Affiliate (other than any such failure resulting from incapacity due to physical or mental illness). A termination will not be for "Cause" pursuant to clause (b), (c), (d) or (e), to the extent such conduct is curable, unless the Company shall have notified the Participant in writing describing such conduct and the Participant shall have failed to cure such conduct within ten (10) business days after the receipt of such written notice.
2.8 "Change in Capitalization" shall have the meaning provided in Section 3.2(a) hereof.
2.9 "Change in Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:
(a) the acquisition (other than from the Company), by any person (as such term is defined in Section 13(c) or 14(d) of the Securities and Exchange Act of 1934, as amended (the "Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of the combined voting power of the Company's then outstanding voting securities; or
(b) the individuals who, as of the date hereof, are members of the Board (the "Incumbent Board"), cease for any reason to constitute at least a majority of the Board, unless the election, or nomination for election by the Company's shareholders, of any new director was approved by a vote of at least a majority of the Incumbent Board, and such new director shall be considered as a member of the Incumbent Board; or
(c) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation or other entity, if (1) the shareholders of the Company, immediately before such merger or consolidation, do not, as a result of such merger or consolidation, own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the entity resulting from such merger or consolidation in substantially the same proportion as their ownership of the combined voting power of the voting securities of the Company outstanding immediately before such merger or consolidation or (2) immediately following the merger or consolidation, the individuals who comprised the Board immediately prior thereto do not constitute at least a majority of the board of directors of the entity resulting from such merger or consolidation (or, if the entity resulting from such merger or consolidation is then a subsidiary, the ultimate parent thereof); or
(d) a complete liquidation or dissolution of the Company or the closing of an agreement for the sale or other disposition of all or substantially all of the assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities is acquired by (1) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained by the Company or any of its subsidiaries or (2) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the shareholders of the Company in the same proportion as their ownership of shares in the Company immediately prior to such acquisition.
In addition, for each Award that constitutes deferred compensation under Section 409A of the Code, solely to the extent required to avoid the imposition of additional taxes and penalties under Section 409A of the Code, a Change in Control shall be deemed to have occurred under the Plan with respect to such Award only if a change in the ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company shall also be deemed to have occurred under Section 409A of the Code. Consistent with the terms of this Section 2.9, the Administrator shall have full and final authority to determine conclusively whether a Change in Control of the Company has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto.
2.10 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.11 "Committee" shall mean the Compensation Committee of the Board, or another committee or subcommittee of the Board described in Article XII hereof.
2.12 "Common Stock" shall mean the common stock of the Company, par value $0.01 per share.
2.13 "Company" shall mean Anywhere Real Estate Inc., a Delaware corporation, and any successor corporation.
2.14 "Consultant" shall mean any consultant or adviser engaged to provide services to the Company or any Affiliate that qualifies as a consultant under the applicable rules of the Securities and Exchange Commission for registration of Shares on a Form S-8 Registration Statement or any successor Form thereto.
2.15 "Current Plan" shall mean the Anywhere Real Estate Inc. Amended and Restated 2018 Long-Term Incentive Plan, effective as of February 26, 2021.
2.16 "Director" or "Non-Employee Director" shall mean a non-employee member of the Board, as constituted from time to time.
2.17 "Dividend Equivalent" shall mean a right to receive the equivalent value (in cash or Shares) of dividends paid on Shares, awarded under Section 8.2 hereof.
2.18 "EBITDA" shall mean earnings before or after deduction for all or any portion of interest, taxes, depreciation, or amortization, whether or not on a continuing operations or an aggregate or per Share basis.
2.19 "EBITDA on a Pro Forma Basis" shall have the meaning ascribed to those terms in the Amended and Restated Credit Agreement dated as of March 5, 2013, as amended, amended and restated, modified or supplemented from time to time, among Anywhere Intermediate Holdings LLC, Anywhere Real Estate Group LLC, the several lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent and the other agents parties thereto.
2.20 "Effective Date" shall have the meaning set forth in Article I.
2.21 "Eligible Individual" shall mean any natural person who is an Employee, a Consultant or a Non-Employee Director, as determined by the Administrator.
2.22 "Employee" shall mean any officer or other employee (as determined in accordance with Section 3401(c) of the Code) of the Company or any Affiliate.
2.23 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time.
2.24 "Fair Market Value" shall mean, as of any given date, the value of a Share determined as follows:
(a) if the Common Stock is (1) listed on any established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (2) listed on any national market system or (3) listed, quoted or traded on any automated quotation system, its Fair Market Value shall be the closing sales price for a Share as quoted on such exchange or system for such date or, if there is no closing sales price for a Share on the date in question, the closing sales price for a Share on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(b) if the Common Stock is traded only otherwise than on a securities exchange and is not quoted on the NASDAQ, the closing quoted selling price of the Common Stock on such date as quoted in "pink sheets" published by the National Daily Quotation Bureau;
(c) if the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a Share on such date, the high bid and low asked prices for a Share on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
(d) if the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Committee in good faith on the date awarded.
2.25 "Forfeited Shares" shall have the meaning provided in Section 3.1(a) hereof.
2.26 "Good Reason" shall mean, with respect to the Participant, "Good Reason" as defined in such Participant's employment, severance or similar agreement with the Company or any of its Subsidiaries if such an agreement exists and contains a definition of Good Reason (or a term of like import, such as "constructive discharge") or, if no such agreement exists or such agreement does not contain a definition of Good Reason (or a term of like import, such as "constructive discharge"), then Good Reason shall mean, unless otherwise defined in an Award Agreement, (a) a reduction of the Participant's annual base salary (but not including any diminution related to a broader compensation reduction that is not limited to any particular employee or executive) or (b) a required relocation of the Participant's primary work location to a location more than fifty (50) miles from the Participant's current primary work location and the Participant's commute increases as a result of such relocation; provided, however, that such reduction or relocation in clauses (a) or (b) above shall not constitute Good Reason unless the
Participant shall have notified the Company in writing describing such reduction or required relocation within thirty (30) business days of its initial occurrence and then only if the Company shall have failed to cure such reduction or required relocation within thirty (30) business days after the Company's receipt of such written notice. In the event the Company has failed to cure such reduction or required relocation within the thirty (30) business day period, the Participant's employment with the Company shall terminate for Good Reason at the expiration of such thirty (30) business day period. Unless otherwise determined by the Administrator, a resignation for Good Reason under this Plan shall not constitute an elimination or discontinuation of Participant's job or position under the Anywhere Real Estate Group LLC Severance Pay Plan (or any successor severance pay plan).
2.28 "Greater Than 10% Stockholder" shall mean an individual then-owning (within the meaning of Section 424(d) of the Code) more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any "parent corporation" or "subsidiary corporation" (as defined in Sections 424(e) and 424(f) of the Code, respectively).
2.29 "Incentive Stock Option" shall mean an Option that is intended to qualify as an incentive stock option and conforms to the applicable provisions of Section 422 of the Code.
2.30 "Insider Trading Policy" means the written policy of the Company as in effect from time to time pertaining to the purchase, sale, transfer or other disposition of the Company's equity securities by Directors, officers, Employees or other service providers who may possess material, nonpublic information regarding the Company or its securities.
2.31 "Non-Qualified Stock Option" shall mean an Option that is not an Incentive Stock Option or which is designated as an Incentive Stock Option but does not meet the applicable requirements of the Code.
2.32 "Option" shall mean a right to purchase Shares at a specified exercise price, granted under Article V hereof. An Option shall be either a Non-Qualified Stock Option or an Incentive Stock Option; provided, however, that Options granted to Non-Employee Directors and Consultants shall only be Non-Qualified Stock Options.
2.33 "Other Incentive Award" shall mean an Award denominated in, linked to or derived from Shares or value metrics related to Shares, granted pursuant to Section 8.4 hereof.
2.34 "Parent" shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities ending with the Company if each of the entities other than the Company beneficially owns, at the time of the determination, securities or interests representing more than fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.
2.35 "Participant" shall mean an Eligible Individual who has been granted an Award.
2.36 "Performance Award" shall mean an Award that is granted under Section 8.1 hereof.
2.37 "Performance Goal" shall mean the performance goals (and adjustments) established by the Committee for a Performance Period based on any criteria including, but not limited to, one or more of the following criteria:
(a) (i) EBITDA, (ii) EBITDA on a Pro Forma Basis; (iii) gross or net sales or revenue; (iv) net income (either before or after taxes); (v) adjusted net income; (vi) operating earnings or profit; (vii) cash flow (including, but not limited to, operating cash flow and free cash flow); (viii) return on assets; (ix) return on capital; (x) return on stockholders' equity; (xi) total stockholder return; (xii) gross or net profit or operating margin; (xiii) costs; (xiv) funds from operations; (xv) expenses; (xvi) working capital; (xvii) earnings per Share; (xviii) adjusted earnings per Share; (xix) price per Share; (xx) implementation or completion of critical projects; (xxi) market share; (xxii) debt levels or reduction; (xxiii) customer retention; (xxiv) customer satisfaction and/or growth; (xxv) research and development achievements; (xxvi) financing and other capital raising transactions; (xxvii) risk management; (xxviii) capital expenditures, (xxix) financial results of acquisitions, (xxx) cost savings initiatives, (xxxi) technology initiatives, (xxxii) royalty revenues or net effective royalty rates and (xxxiii) sales agent commission splits, any of which may be measured either in absolute terms for the Company or any operating unit of the Company or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices.
(b) Performance Goals may be expressed in terms of overall Company performance or the performance of an Affiliate or one or more divisions or business units, or the performance of the applicable industry or other benchmarks (e.g., National Association of Realtors, FNMA, etc.). In addition, such Performance
Goals may be based upon the attainment of specified levels of performance under one or more of the measures described above relative to the performance of other corporations, including those in the Company's peer group. Any Performance Goals that are financial metrics may be determined in accordance with Applicable Accounting Principles, or may be adjusted when established to include or exclude any items otherwise includable or excludable under Applicable Accounting Principles.
(c) The Committee may, in its sole discretion, provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Goals. Such adjustments may include, but are not limited to, one or more of the following: (i) items related to a change in accounting principles; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (vii) items related to the disposal or sale of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under Applicable Accounting Standards; (ix) items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or infrequently occurring corporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company's core, on-going business activities; (xiv) items related to acquired in-process research and development; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnership arrangements; (xvii) items relating to asset impairment charges; (xviii) items related to employee retention and former parent legacy costs (benefit); (xix) items relating to gains or losses for litigation, arbitration and contractual settlements; or (xx) items relating to any other unusual or nonrecurring events or changes in applicable laws, accounting principles, business conditions, industry conditions or economic conditions.
2.38 "Performance Period" shall mean one or more periods of time, which may be of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant's right to, and the payment of, a Performance Award.
2.39 "Plan" shall have the meaning set forth in Article I.
2.40 "Prior 2018 Plan" shall mean the Realogy Holdings Corp. 2018 Long-Term Incentive Plan.
2.41 "Prior 2012 Plan" shall mean the Realogy Holdings Corp. Amended and Restated 2012 Long-Term Incentive Plan.
2.42 "Restricted Stock" shall mean an award of Shares made under Article VI hereof that is subject to certain restrictions and may be subject to risk of forfeiture or repurchase.
2.43 "Restricted Stock Unit" shall mean a contractual right awarded under Article VII hereof to receive cash or Shares.
2.44 "Securities Act" shall mean the Securities Act of 1933, as amended.
2.45 "Share Limit" shall have the meaning provided in Section 3.1(a) hereof.
2.46 "Shares" shall mean shares of Common Stock.
2.47 "Stock Appreciation Right" shall mean a stock appreciation right granted under Article IX hereof.
2.48 "Stock Payment" shall mean a payment in the form of Shares awarded under Section 8.3 hereof.
2.49 "Subsidiary" shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing more than fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.
2.50 “Substitute Award” shall mean an award in substitution for stock options and other awards held by employees or directors of other entities who are about to become employees of the Company or its Subsidiaries, whose employer is about to become an Affiliate as the result of a merger or consolidation of the Company with another corporation, or the acquisition by the Company of substantially all the assets of another
corporation, or the acquisition by the Company of at least fifty percent (50%) of the issued and outstanding stock of another corporation as the result of which such other corporation will become a Subsidiary. The terms and conditions of the substitute awards so granted may vary from the terms and conditions set forth in the Plan to such extent as the Board at the time of grant may deem appropriate to conform, in whole or in part, to the provisions of the award in substitution for which they are granted, subject to applicable laws.
ARTICLE III
SHARES SUBJECT TO THE PLAN
3.1 Number of Shares.
(a) Subject to Section 3.2 hereof, the maximum aggregate number of Shares available for issuance under the Plan (the "Share Limit") shall be (i) 5.0 million, (ii) the number of shares that remain available for grant under the Current Plan as of the Effective Date and (iii) the number of Shares that are subject to or underlie awards which expire or for any reason are cancelled, terminated, forfeited, fail to vest, or for any other reason are not paid or delivered in shares under the Current Plan and, as permitted by the Current Plan, the Prior 2018 Plan and Prior 2012 Plan, following the Effective Date, except for Shares surrendered or withheld as payment of either the exercise price of an award and/or withholding taxes in respect of an award under the Current Plan, the Prior 2018 Plan or Prior 2012 Plan (all such shares in this Section 3.1(a)(iii), together, the "Forfeited Shares"). Any Forfeited Shares under the Current Plan and the Prior 2018 Plan shall be reincorporated into the Plan as one Share for every one Forfeited Share. Any Forfeited Shares that were subject to options or stock appreciation rights under the Prior 2012 Plan shall be reincorporated into the Plan as one Share for every one Forfeited Share formerly subject to such option or stock appreciation right and any Forfeited Shares that were subject to awards other than options or stock appreciation rights shall be reincorporated into the Plan as 2.22 Shares for every one Forfeited Share formerly subject to such other award. Notwithstanding the generality of the foregoing, subject to Section 3.2 hereof, the maximum number of Shares available for issuance under the Plan with respect to Incentive Stock Options shall be 5.0 million.
(b) Shares issued under the Plan may, in whole or in part, be authorized but unissued Shares or Shares that shall have been or may be reacquired by the Company in the open market, in private transactions, or otherwise. If an Award entitles the Participant to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan. Except as set forth below, Shares that are subject to or underlie Awards which expire or for any reason are cancelled, terminated, forfeited, fail to vest, or for any other reason are not paid or delivered as Shares under the Plan shall again be available for issuance in connection with future Awards granted under the Plan. Shares with respect to cash-settled Awards shall not count against the Share Limit. Shares surrendered or withheld as payment of either the exercise price of an Award (including Options and Stock Appreciation Rights) and/or withholding taxes in respect of such an Award shall be counted against the Share Limit and shall not again be available for issuance in connection with future Awards (for example, upon exercise of a Stock Appreciation Right, the Share Limit shall be reduced by the full number of Shares underlying the Stock Appreciation Right, regardless of the number of Shares actually delivered in settlement of the Stock Appreciation Right); provided, further that Shares purchased by the Company in the open market using the cash proceeds from the exercise of an Award shall not be available for issuance in connection with future Awards.
(c) If Shares are issued under the Plan with respect to a Substitute Award, such Shares shall not count against the Share Limit.
3.2 Adjustments.
(a) In the event of any stock dividend, stock split, combination or exchange of Shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, amalgamation, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase or other reorganization or corporate transaction or event, or any other change affecting the Shares of the Company's stock or the Share price of the Company's stock (any such occurrence or event, a "Change in Capitalization"), the Administrator shall make equitable adjustments, if any, to reflect such change with respect to (i) the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the Share Limit); (ii) the number and kind of shares (or other securities or property) subject to outstanding Awards; (iii) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and/or (iv) the grant or exercise price per Share for any outstanding Awards under the Plan;
provided, however, that the Administrator shall make such equitable adjustments as it determines to be appropriate and equitable, in its sole discretion, to prevent dilution or enlargement of rights. Without limiting the generality of the foregoing, in connection with a Change in Capitalization, the Administrator may provide, in its sole discretion, for the cancellation of any outstanding Award granted hereunder in exchange for payment in cash or other property having an aggregate Fair Market Value of the Shares covered by such award, reduced by the aggregate exercise price or purchase price thereof, if any. In the case where the exercise price per Share of an Option or a Stock Appreciation Right exceeds the Fair Market Value per Share, the Administrator may cancel, in its sole discretion, such Option or Stock Appreciation Right for no payment. The Administrator's determinations pursuant to this Section 3.2(a) shall be final, binding and conclusive.
(b) No action shall be taken under this Section 3.2 which shall cause an Award to fail to comply with Section 409A of the Code or an exemption therefrom, in either case, to the extent applicable to such Award.
3.3 Limit to Directors. No Director shall be granted Awards under the Plan in any consecutive 12-month period having a value of more than $700,000.
ARTICLE IV
GRANTING OF AWARDS
4.1 Participation. The Committee may, from time to time, select from among all Eligible Individuals, those to whom one or more Awards shall be granted and shall determine the nature and amount of each Award, which shall not be inconsistent with the requirements of the Plan. No Eligible Individual shall have any right to be granted an Award pursuant to the Plan.
4.2 Award Agreement. Each Award may be evidenced by an Award Agreement stating the terms and conditions applicable to such Award, consistent with the requirements of the Plan.
4.3 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the sole discretion of the Administrator, be granted either alone, in addition to or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant of such other Awards.
4.4 Minimum Vesting Period. Subject to Article X and Sections 3.1(c), 5.6, 6.1(c), 7.1(c), 8.5(b) and 9.1(c) of the Plan, all Shares that are subject to Awards shall be granted subject to a minimum vesting period of at least twelve (12) months; provided, that up to five percent (5%) of the Shares initially available under the Plan as of the Effective Date may be granted as Awards that are not subject to the minimum vesting period requirement.
ARTICLE V
OPTIONS
5.1 Granting of Options to Eligible Individuals. The Administrator is authorized to grant Options to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine which shall not be inconsistent with the Plan.
5.2 Eligibility for Incentive Stock Options. No Incentive Stock Option shall be granted to any individual who is not an Employee of the Company or any "parent corporation" or "subsidiary corporation" of the Company (as defined in Sections 424(e) and 424(f) of the Code, respectively).
5.3 Option Exercise Price. The exercise price per Share subject to each Option shall be set by the Administrator, but shall not be less than one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted (or, as to Incentive Stock Options, on the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code). In addition, in the case of Incentive Stock Options granted to a Greater Than 10% Stockholder, such price shall not be less than one hundred ten percent (110%) of the Fair Market Value of a Share on the date the Option is granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).
5.4 Option Term. The term of each Option shall be set forth in the Award Agreement; provided, however, that the term shall not be more than ten (10) years from the date the Option is granted, or five (5) years from the date an Incentive Stock Option is granted to a Greater Than 10% Stockholder. Notwithstanding anything to the contrary in this Section 5.4, if the original term of an Option held by a Participant expires during a
period subject to the Insider Trading Policy, the term of such Option shall be extended until the tenth business day following the end of such period, at which time any unexercised portion of the Option shall expire. The Award Agreement shall set forth the time period, including the time period following a termination of employment or other service, during which the Participant has the right to exercise the vested Options, which time period may not extend beyond the stated term of the Option. Except as limited by the requirements of Section 409A or Section 422 of the Code, the Administrator may extend the term of any outstanding Option, and may extend the time period during which vested Options may be exercised, in connection with any termination of employment or other service of the Participant, and, subject to Section 13.1 hereof, may amend any other term or condition of such Option relating to such a termination of employment or other service.
5.5 Option Vesting.
(a) The terms and conditions pursuant to which an Option vests in the Participant and becomes exercisable shall be set forth in the applicable Award Agreement. Such vesting may be based on service with the Company or any Affiliate, attainment of one or more of the Performance Goals, or any other criteria selected by the Administrator.
(b) No portion of an Option which is unexercisable at a Participant's termination of employment or other service shall thereafter become exercisable, except as may be otherwise provided in the applicable Award Agreement or by action of the Administrator following the grant of the Option.
5.6 Treatment of Options upon Certain Events. The applicable Award Agreement shall provide for the treatment of each Option upon a termination of employment or other service with the Company.
5.7 Substitution of Stock Appreciation Rights. The Administrator may, in its sole discretion, substitute an Award of Stock Appreciation Rights for an outstanding Option at any time prior to or upon exercise of such Option; provided, however, that such Stock Appreciation Rights shall be exercisable with respect to the same number of Shares for which such substituted Option would have been exercisable, and shall also have the same exercise price and remaining term as the substituted Option.
5.8 Partial Exercise of Options. An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable with respect to fractional Shares and the Administrator may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number of Shares.
5.9 Manner of Exercise of Options. A Participant may exercise an exercisable Option, subject to applicable requirements set forth in the Award Agreement, by paying the full exercise price and applicable withholding taxes to the stock administrator of the Company for the Shares with respect to which the Option, or portion thereof, is exercised, in accordance with one or more of the following: (i) cash or check, (ii) Shares (including, in the case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the Award), in each case, having a Fair Market Value on the date of delivery equal to the aggregate payments required, or (iii) other form of legal consideration acceptable to the Administrator. Notwithstanding any other provision of the Plan to the contrary, no Participant who is a Director or an "executive officer" of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.
5.10 Notification Regarding Disposition. The Participant shall give the Company prompt written or electronic notice of any disposition of Shares acquired by exercise of an Incentive Stock Option which occurs within (a) two (2) years from the date of granting (including the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) such Option to such Participant, or (b) one (1) year after the transfer of such Shares to such Participant.
5.11 Prohibition on Repricing. Subject to limitations imposed by Section 409A of the Code or other applicable law and the limitations contained in Section 13.1 herein, and except in connection with an equitable adjustment pursuant to Section 3.2 herein, in no event shall the exercise price with respect to an Award be reduced following the grant of an Award, nor shall an Award be cancelled in exchange for a replacement Award with a lower exercise price or in exchange for another type of Award or cash payment without stockholder approval.
ARTICLE VI
RESTRICTED STOCK
6.1 Award of Restricted Stock.
(a) The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determine the terms and conditions, including the restrictions, applicable to each award of Restricted Stock, which terms and conditions shall be set forth in the Award Agreement and shall not be inconsistent with the Plan, and may impose such conditions on the issuance of such Restricted Stock as it deems appropriate.
(b) The Award Agreement shall set forth the purchase price, if any, and form of payment for Restricted Stock; provided, however, that if a purchase price is charged, such purchase price shall be no less than the par value of the Shares to be purchased, unless otherwise permitted by applicable law. In all cases, legal consideration shall be required for each issuance of Restricted Stock to the extent required by applicable law.
(c) The Award Agreement shall set forth the treatment of each Award of Restricted Stock upon a termination of employment or other service with the Company.
6.2 Rights as Stockholders. Upon issuance of Restricted Stock, the Participant shall have, except as otherwise provided herein or in the Award Agreement, all the rights of a stockholder with respect to said Shares. This includes, but is not limited to, the right to vote Shares of Restricted Stock as the record owner thereof and the right to receive dividends and other distributions payable to an Eligible Individual during the restriction period; provided, however, that any dividends or other distributions with respect to the Shares shall be (i) credited by the Company to an account for the Participant and accumulated without interest until the date upon which the underlying Award becomes vested and (ii) reconveyed to the Company without further consideration or any act or action by the Participant if for any reason the underlying Award is cancelled, terminated, forfeited or fails to vest. In no event shall dividends and other distributions be paid or distributed with respect to Shares of Restricted Stock until the vesting restrictions of the underlying Award lapse.
6.3 Restrictions. All Shares of Restricted Stock (including any Shares received by Participants thereof with respect to Shares of Restricted Stock as a result of stock dividends, stock splits or any other Change in Capitalization) shall, in the terms of an applicable Award Agreement, be subject to such restrictions and vesting requirements as the Administrator shall provide. Such restrictions may include, without limitation, restrictions concerning voting rights and transferability and such restrictions may lapse separately or in combination at such times and pursuant to such circumstances or based on such criteria as selected by the Administrator, including, without limitation, criteria based on the Participant's duration of employment, directorship or consultancy with the Company, the Performance Goals, Company or Affiliate performance, individual performance or other criteria selected by the Administrator. Restricted Stock may not be sold or encumbered until all restrictions are terminated or expire.
6.4 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan may be evidenced in such manner as the Administrator shall determine. Certificates or book entries evidencing Shares of Restricted Stock must include an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, and the Company may, in its sole discretion, retain physical possession of any stock certificate until such time as all applicable restrictions lapse.
6.5 Section 83(b) Election. If a Participant makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Participant would otherwise be taxable under Section 83(a) of the Code, the Participant shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service.
ARTICLE VII
RESTRICTED STOCK UNITS
7.1 Award of Restricted Stock Units.
(a) The Administrator is authorized to grant Restricted Stock Units to Eligible Individuals, and shall determine the terms and conditions, including the restrictions, applicable to each award of Restricted Stock Units, which terms and conditions shall be set forth in the Award Agreement and shall not be inconsistent with the Plan, and may impose such conditions on the issuance of such Restricted Stock Units as it deems appropriate. The Award Agreement shall set forth the time and form of payment of each award of Restricted Stock Units.
(b) The Administrator shall specify, or permit the Participant to elect, the conditions and dates upon which the Shares underlying the Restricted Stock Units shall be issued (or cash in lieu thereof shall be paid), which dates shall not be earlier than the date as of which the Restricted Stock Units vest and become
nonforfeitable. Such conditions and dates shall be established in accordance with the applicable provisions of Section 409A of the Code or an exemption therefrom.
(c) The Award Agreement shall set forth the treatment of each Award of Restricted Stock Units upon a termination of employment or other service with the Company. On the distribution dates, the Company shall issue to the Participant one unrestricted, fully transferable Share (or, if provided in the Award Agreement, the Fair Market Value of one such Share in cash) for each vested and nonforfeitable Restricted Stock Unit.
ARTICLE VIII
PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS,
STOCK PAYMENTS, OTHER INCENTIVE AWARDS
8.1 Performance Awards.
(a) The Administrator is authorized to grant Performance Awards to any Eligible Individual. The vesting and value of Performance Awards may be linked to any one or more of the Performance Goals or other specific criteria determined by the Administrator, in each case on a specified date or dates or over any period or periods as set forth in the Award Agreement. Performance Awards may be paid in cash, Shares or a combination of both, as set forth in the Award Agreement.
(b) Without limiting Section 8.1(a) hereof, the Administrator may grant Performance Awards to any Eligible Individual in the form of a cash bonus payable upon the attainment of objective Performance Goals, or such other criteria, whether or not objective, which are established by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator.
(c) Performance Awards shall be paid, unless otherwise determined by the Committee, no later than 2 ½ months after the tax year in which the Performance Award vests. Unless otherwise provided in the applicable Performance Goals or Award Agreement, a Participant shall be eligible to receive payment pursuant to such Awards for a Performance Period only if and to the extent the Performance Goals for such applicable Performance Period are achieved.
8.2 Dividend Equivalents.
(a) Subject to Section 8.2(b) hereof, Dividend Equivalents may be granted by the Administrator, either alone or in tandem with another Award, based on dividends declared on the Common Stock, to be credited as of dividend payment dates during the period between the date the Dividend Equivalents are granted to a Participant and the date such Dividend Equivalents terminate or expire, as determined by the Administrator. Such Dividend Equivalents shall be converted to cash or additional Shares by such formula, at such time and subject to such limitations as set forth in the applicable Award Agreement, provided, however, Dividend Equivalents with respect to Shares covered by an Award shall be (i) subject to the same vesting requirements, settlement provisions, and other terms and conditions as the underlying Award to which they relate, (ii) only paid or distributed to a Participant at the same time or times and to the same extent that the vesting conditions (including Performance Goals), if any, are subsequently satisfied and the Award vests with respect to such Shares, and (iii) reconveyed to the Company without further consideration or any act or action by the Participant if for any reason the underlying Award is cancelled, terminated, forfeited or fails to vest. In no event shall Dividend Equivalents be paid or distributed until the vesting restrictions of the underlying Award lapse. A Participant shall have no right to any outstanding Dividend Equivalents granted in tandem with an Award, if such Award is expired, forfeited or otherwise terminated.
(b) Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights.
8.3 Stock Payments. The Administrator is authorized to make one or more Stock Payments to any Eligible Individual. The number or value of Shares of any Stock Payment shall be determined by the Administrator and may be based upon one or more Performance Goals or any other specific criteria, including service to the Company or any Affiliate, determined by the Administrator.
8.4 Other Incentive Awards. The Administrator is authorized to grant Other Incentive Awards to any Eligible Individual, which Awards may cover Shares or the right to purchase Shares or have a value derived from the value of, or an exercise or conversion privilege at a price related to, or that are otherwise payable in or based on, Shares, stockholder value or stockholder return, in each case, on a specified date or dates or over any period or periods determined by the Administrator. The terms and conditions applicable to such Other Incentive
Awards shall be set forth in the applicable Award Agreement. Other Incentive Awards may be linked to any one or more of the Performance Goals or other specific criteria determined appropriate by the Administrator and may be payable in cash or Shares.
8.5 Other Terms and Conditions.
(a) All applicable terms and conditions of each Award described in this Article VIII, including without limitation, as applicable, the term, vesting conditions and exercise/purchase price applicable to the Award, shall be set by the Administrator in its sole discretion, provided, however, that the value of the consideration paid by a Participant for an Award shall not be less than the par value of a Share, unless otherwise permitted by applicable law.
(b) The rights of Participants granted Performance Awards, Dividend Equivalents, Stock Payments or Other Incentive Awards upon termination of employment or other service shall be set forth in the Award Agreement.
ARTICLE IX
STOCK APPRECIATION RIGHTS
9.1 Grant of Stock Appreciation Rights.
(a) The Administrator is authorized to grant Awards of Stock Appreciation Rights to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine which shall not be inconsistent with the Plan.
(b) Each Award of Stock Appreciation Rights shall entitle the Participant (or other individual entitled to exercise the Award of Stock Appreciation Rights pursuant to the Plan) to exercise all or a specified portion of the Award of Stock Appreciation Rights (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference obtained by subtracting the exercise price per Share of the Stock Appreciation Rights from the Fair Market Value on the date of exercise of the Stock Appreciation Right by the number of Stock Appreciation Rights that shall have been exercised, subject to any limitations the Administrator may impose or as set forth in the Award Agreement. The exercise price per Share subject to each Award of Stock Appreciation Rights shall be set by the Administrator, but shall not be less than one hundred percent (100%) of the Fair Market Value on the date the Stock Appreciation Rights are granted.
(c) The Award Agreement shall set forth the treatment of each Award of Stock Appreciation Rights upon a termination of employment or other service with the Company.
9.2 Stock Appreciation Right Vesting.
(a) The Award Agreement shall set forth the period during which a Participant shall vest in an Award of Stock Appreciation Rights and have the right to exercise such Stock Appreciation Rights (subject to Section 9.4 hereof) in whole or in part. Such vesting may be based on service with the Company or any Affiliate, any of the Performance Goals or any other criteria selected by the Administrator.
(b) No portion of an Award of Stock Appreciation Rights which is unexercisable upon termination of employment or other service shall thereafter become exercisable, except as may be otherwise provided in an Award Agreement or by action of the Administrator following the grant of the Stock Appreciation Rights; provided, that in no event shall an Award of Stock Appreciation Rights become exercisable following its expiration, termination or forfeiture.
9.3 Manner of Exercise. A Participant may exercise an exercisable Stock Appreciation Right as follows, subject to applicable requirements established by the Administrator; full payment of the applicable withholding taxes shall be made to the stock administrator of the Company for the Shares with respect to which the Stock Appreciation Rights, or portion thereof, are exercised, in a manner permitted by Section 6.2 in respect of Options.
9.4 Stock Appreciation Right Term. The term of each Award of Stock Appreciation Rights shall be set forth in the Award Agreement; provided, however, that the term shall not be more than ten (10) years from the date the Stock Appreciation Rights are granted. Notwithstanding anything to the contrary in this Section 9.4, if the original term of a Stock Appreciation Right held by a Participant expires during a period subject to the Insider Trading Policy, the term of such Stock Appreciation Right shall be extended until the tenth business day following the end of such period, at which time any unexercised portion of the Stock Appreciation Right shall expire. The
Award Agreement shall set forth the time period, including any time period following a termination of employment or other service, during which the Participant has the right to exercise any vested Stock Appreciation Rights, which time period may not extend beyond the expiration date of the Award term. Except as limited by the requirements of Section 409A of the Code, the Administrator may extend the term of any outstanding Stock Appreciation Rights, and may extend the time period during which vested Stock Appreciation Rights may be exercised in connection with any termination of employment or other service of the Participant, and, subject to Section 13.1 hereof, may amend any other term or condition of such Stock Appreciation Rights relating to such a termination of employment or other service.
9.5 Prohibition on Repricing. Subject to limitations imposed by Section 409A of the Code or other applicable law and the limitations contained in Section 13.1 herein, and except in connection with an equitable adjustment pursuant to Section 3.2, in no event shall the exercise price with respect to an Award be reduced following the grant of an Award, nor shall an Award be cancelled in exchange for a replacement Award with a lower exercise price or in exchange for another type of Award or cash payment without stockholder approval.
ARTICLE X
CHANGE IN CONTROL
10.1 Change in Control Treatment of Outstanding Awards. Unless otherwise determined by the Board and/or evidenced in an Award Agreement:
(a) Performance Awards. In the event that a Change in Control occurs during a Performance Period, then immediately prior to the Change in Control, (1) the Performance Goals subject to each outstanding Performance Award shall be deemed to be achieved at the actual level of performance based on an assumed Performance Period ending as of the date immediately prior to the Change in Control, (2) each such Performance Award shall then cease to be subject to the achievement of the Performance Goals and (3) each such Performance Award shall vest in full at the end of the Performance Period provided the Participant is employed by or is providing services to the Company or any Affiliate on such date, subject to the terms of this Section 10.1.
(b) Assumption/Substitution of Awards. With respect to each outstanding Award that is assumed or substituted in connection with a Change in Control, in the event that (1) a Change in Control occurs and (2) during the twenty-four (24) month period following such Change in Control a Participant's employment or service is terminated without Cause by the Company or any Affiliate or the Participant resigns from employment or service from the Company or any Affiliate with Good Reason, then:
(i) Any and all Options and Stock Appreciation Rights shall become fully vested and exercisable;
(ii) Any and all Restricted Stock Awards, Restricted Stock Units Awards, Performance Awards, Dividend Equivalent Awards, Stock Payment Awards or Other Incentive Award shall become fully vested and all restrictions, payment conditions and forfeiture conditions applicable to such Award shall lapse and be settled as soon as reasonable practicable, but in no event later than ten (10) days following such termination of employment; and
(iii) Notwithstanding anything to the contrary, if the Change in Control event does not constitute a change in ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company under Section 409A of the Code, and if the Company determines any Award constitutes deferred compensation subject to Section 409A of the Code, then the vesting of such Award shall be accelerated as of the date of termination of employment, but the Company shall pay such Award on its scheduled payment date (which may be a "separation from service" within the meaning of Section 409A of the Code), but in no event more than 90 days following the scheduled payment date.
(c) No Assumption/Substitution of Awards. With respect to each outstanding Award that is not assumed or substituted in connection with a Change in Control, immediately upon the occurrence of the Change in Control,
(i) Any and all Options and Stock Appreciation Rights shall become fully vested and exercisable;
(ii) Any and all Restricted Stock Awards, Restricted Stock Units Awards, Performance Awards, Dividend Equivalent Awards, Stock Payment Awards or Other Incentive Award shall become fully vested and all restrictions, payment conditions and forfeiture conditions applicable to such Award shall lapse
and be settled as soon as reasonable practicable, but in no event later than ten (10) days following the Change in Control; and
(iii) Notwithstanding anything to the contrary, if the Company determines any Award constitutes deferred compensation subject to Section 409A of the Code, then to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, the vesting of such Award shall be accelerated as of the effective date of the Change in Control in accordance with clauses (i) and (ii) above, but the Company shall pay such Award on its scheduled payment date, but in no event more than 90 days following the scheduled payment date.
(d) Restrictive Covenants Agreements. The Participant's obligations under restrictive covenants contained in any Award Agreement or any other agreement with the Company or any Affiliate of the Company shall not lapse upon a Change in Control.
(e) Assumed/Substituted. For purposes of this Section 10.1, an Award shall be considered assumed or substituted for if, following the Change in Control, the Award is (1) based on shares of common stock that are traded on an established U.S. securities market and (2) of comparable value and remains subject to the same terms and conditions that were applicable to the Award immediately prior to the Change in Control except that, if an Award that relates to Shares shall instead relate to the common stock of the acquiring or ultimate parent entity.
(f) Cashout of Awards. Notwithstanding any other provision of the Plan, in the event of a Change in Control, except as would otherwise result in adverse tax consequences under Section 409A of the Code, the Administrator may, in its discretion, provide that each Award shall, immediately upon the occurrence of a Change in Control, be cancelled in exchange for a payment in cash or securities in an amount equal to (i) the excess (if any) of the consideration paid per Share in the Change in Control over the exercise or purchase price per Share subject to the Award multiplied by (ii) the number of Shares granted under the Award. Without limiting the generality of the foregoing, in the event that the consideration paid per Share in the Change in Control is less than or equal to the exercise or purchase price per Share subject to the Award, then the Administrator may, in its discretion, cancel such Award without any consideration upon the occurrence of a Change in Control.
ARTICLE XI
ADDITIONAL TERMS OF AWARDS
11.1 Tax Withholding and Consequences. The Company and its Affiliates shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company or an Affiliate, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Participant's social security, Medicare and any other employment tax obligation) required by law to be withheld with respect to any taxable event concerning a Participant arising in connection with any Award. The Administrator may in its sole discretion and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company or an Affiliate withhold Shares otherwise issuable under an Award (or allow the surrender of Shares), provided that the number of Shares which may be so withheld or surrendered shall be limited to the number of Shares which have a Fair Market Value on the date of withholding in such amount that will not cause adverse accounting consequences for the Company and its Affiliates and is permitted under applicable withholding rules promulgated by the Internal Revenue Service or another governmental entity. Neither the Company nor any Affiliate, nor any director, officer, agent, representative or employee of either, guarantees to any Participant or any other person any particular tax consequences as a result of the grant of, exercise of rights under or payment in respect of an Award, including but not limited to that an Option granted as an Incentive Stock Option has or will qualify as an "incentive stock option" within the meaning of Section 422 of the Code or that the provisions and penalties of Section 409A of the Code, pertaining to non-qualified plans of deferred compensation, will or will not apply.
11.2 Transferability of Awards.
(a) No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution;
(b) No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) unless and until such Award has been exercised, or the
Shares underlying such Award have been issued, and all restrictions applicable to such Shares have lapsed, and any attempted disposition of an Award prior to the satisfaction of these conditions shall be null and void and of no effect; and
(c) During the lifetime of the Participant, only the Participant may exercise an Award (or any portion thereof) granted to him or her under the Plan; after the death of the Participant, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable program or Award Agreement, be exercised by his personal representative or by any individual empowered to do so under the deceased Participant's will or under the then-applicable laws of descent and distribution.
11.3 Conditions to Issuance of Shares.
(a) Notwithstanding anything herein to the contrary, neither the Company nor its Affiliates shall be required to issue or deliver any certificates or make any book entries evidencing Shares pursuant to the exercise of any Award, unless and until the Administrator has determined, with advice of counsel, that the issuance of such Shares is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded, and the Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein, the Administrator may require that a Participant make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements.
(b) All Share certificates delivered pursuant to the Plan and all Shares issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state, or foreign securities or other laws, rules and regulations and the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted, or traded. The Administrator may place legends on any Share certificate or book entry to reference restrictions applicable to the Shares.
(c) The Administrator shall have the right to require any Participant to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the sole discretion of the Administrator.
(d) No fractional Shares shall be issued and the Administrator shall determine, in its sole discretion, the treatment of such fractional Shares, including, but not limited to whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down.
(e) Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by any applicable law, rule or regulation, the Company and/or its Affiliates may, in lieu of delivering to any Participant certificates evidencing Shares issued in connection with any Award, record the issuance of Shares in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).
11.4 Forfeiture and Recoupment Provisions. Pursuant to its general authority to determine the terms and conditions applicable to Awards under the Plan, the Administrator shall have the right to provide, in the terms of Awards made under the Plan, or to require a Participant to agree by separate written or electronic instrument, that any proceeds, gains or other economic benefit must be paid to the Company and the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall be forfeited, in either case, if (i) a termination of employment or other service occurs prior to a specified date, or within a specified time period following receipt or exercise of the Award, (ii) the Participant at any time, or during a specified time period, engages in any activity which violates any applicable restrictive covenants of the Company, as may be further specified in an Award Agreement, (iii) the Participant incurs a termination of employment or other service for Cause or (iv) the Participant at any time engages in unlawful and/or fraudulent activity or an activity which constitutes a breach of the Company's Code of Conduct policy as in effect from time to time or a breach of the Participant's employment agreement, as may be further specified in an Award Agreement. In addition, all Awards made under the Plan shall be subject to any clawback or recoupment policies of the Company, as in effect from time to time, or as otherwise required by law.
11.5 Leave of Absence. Unless the Administrator provides otherwise, vesting of Awards granted hereunder shall be suspended during any unpaid leave of absence. A Participant shall not cease to be considered an Employee, Non-Employee Director or Consultant, as applicable, in the case of any (a) leave of absence approved by the Company, or (b) transfer between locations of the Company or between the Company and any of its Affiliates or any successor thereof.
ARTICLE XII
ADMINISTRATION
12.1 Administrator. The Committee (or another committee or a subcommittee of the Board assuming the functions of the Committee under the Plan) shall administer the Plan (except as otherwise permitted herein) and shall be referred to herein as the "Administrator." Unless otherwise determined by the Board, the Committee shall consist solely of two or more Non-Employee Directors appointed by and holding office at the pleasure of the Board, each of whom is intended to qualify as a "non-employee director" as defined by Rule 16b-3 of the Exchange Act and an "independent director" under the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded, in each case, to the extent required under such provision; provided, however, that any action taken by the Committee shall be valid and effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 12.1 or otherwise provided in any charter of the Committee. Notwithstanding the foregoing, (a) the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to Awards granted to Non-Employee Directors and (b) the Board or Committee may delegate its authority hereunder to the extent permitted by Section 12.5 hereof.
12.2 Duties and Powers of Administrator. It shall be the duty of the Administrator to conduct the general administration of the Plan in accordance with its provisions. The Administrator shall have the power to interpret the Plan and all Award Agreements, and to adopt such rules for the administration, interpretation and application of the Plan as are not inconsistent with the Plan, to interpret, amend or revoke any such rules and to amend any Award Agreement, provided that the rights or obligations of the holder of the Award that is the subject of any such Award Agreement are not affected adversely by such amendment unless the consent of the Participant is obtained or such amendment is otherwise permitted under Section 13.1 hereof; provided, however, the Participant's consent shall not be required for any amendment required under applicable laws, rules or regulations. In its sole discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b-3 under the Exchange Actor the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded are required to be determined in the sole discretion of the Committee.
12.3 Authority of Administrator. Subject to any specific designation in the Plan, the Administrator has the exclusive power, authority and sole discretion to:
(a) Designate Eligible Individuals to receive Awards;
(b) Determine the type or types of Awards to be granted to each Eligible Individual;
(c) Determine the number of Awards to be granted and the number of Shares to which an Award will relate;
(d) Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any performance criteria, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion determines;
(e) Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;
(f) Prescribe the form of each Award Agreement, which need not be identical for each Participant;
(g) Decide all other matters that must be determined in connection with an Award;
(h) Accelerate the vesting of an Award after the grant of an Award; provided, that in no event shall an Award become exercisable following its expiration, termination or forfeiture;
(i) Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;
(j) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and
(k) Make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan.
12.4 Decisions Binding. The Administrator's interpretation of the Plan, any Awards granted pursuant to the Plan or any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.
12.5 Delegation of Authority. To the extent permitted by applicable law or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded, the Board or Committee may from time to time delegate to a committee of one or more members of the Board or to one or more officers of the Company the authority to grant or amend Awards or to take other administrative actions pursuant to this Article XII; provided, however, that in no event shall an officer of the Company be delegated the authority to grant Awards to, or amend Awards held by, the following individuals: (a) individuals who are subject to Section 16 of the Exchange Act, or (b) officers of the Company (or Directors) to whom authority to grant or amend Awards has been delegated hereunder; provided further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under applicable securities laws or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded. Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation, and the Board may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 12.5 shall serve in such capacity at the pleasure of the Board and the Committee.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 Amendment, Suspension or Termination of the Plan. The Plan may be amended or terminated at any time by action of the Board. However, no amendment may, without stockholder approval, except as set forth in Section 3.2 herein, (i) increase the aggregate number of Shares available for Awards, (ii) extend the term of the Plan, (iii) materially expand the types of awards available under the Plan, (iv) change the definition of Eligible Individual to add a category or categories of individuals who are eligible to participate in the Plan, (v) delete or limit the prohibition against repricing of Options or Stock Appreciation Rights contained in Sections 5.11 and 9.5, or (vi) make other changes which require approval by the stockholders of the Company in order to comply with applicable law or applicable stock market rules. No amendment or termination of the Plan may adversely modify any individual's rights under an outstanding Award unless such individual consents to the modification in writing.
13.2 Paperless Administration. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.
13.3 Titles and Headings, References to Sections of the Code or Exchange Act. The titles and headings of the sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include any amendment or successor thereto.
13.4 Governing Law. The Plan and any programs and agreements hereunder shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof.
13.5 Section 409A. The intent of the parties is that payments and benefits under the Plan comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and be administered to be in compliance therewith. Any payments described in the Plan that are due within the "short-term deferral period" as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, the Participant shall not be considered to have terminated employment with the Company for purposes of the Plan and no payment shall be due to the Participant under the Plan or any Award until the Participant would be considered to have incurred a "separation from service" from the Company within the meaning of Section 409A of the Code. Notwithstanding anything to the contrary in the Plan, to the extent required in
order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following the Participant's termination of employment shall instead be paid on the first business day after the date that is six (6) months following the Participant's separation from service (or upon the Participant's death, if earlier). In addition, for purposes of the Plan, each amount to be paid or benefit to be provided to the Participant pursuant to the Plan, which constitute deferred compensation subject to Section 409A of the Code, shall be construed as a separate identified payment for purposes of Section 409A of the Code. Notwithstanding the foregoing, for each Award that constitutes nonqualified deferred compensation under Section 409A of the Code, if required to avoid accelerated taxation and/or tax penalties, a Change in Control shall be deemed to have occurred for purposes of the payment or settlement of such Award under the Plan only if a "change in the ownership of the corporation," a "change in effective control of the corporation" or a "change in the ownership of a substantial portion of the assets of the corporation," within the meaning of Section 409A(a)(2)(A)(v) of the Code shall also be deemed to have occurred under Section 409A of the Code.
13.6 No Rights to Awards. No Eligible Individual or other individual shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Administrator is obligated to treat Eligible Individuals, Participants or any other individuals uniformly.
13.7 Unfunded Status of Awards. The Plan is intended to be an "unfunded" plan for incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any program or Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the Company or any Affiliate.
13.8 Indemnification. To the extent allowable pursuant to applicable law, each member of the Board and any officer or other employee to whom authority to administer any component of the Plan is delegated shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided, however, that he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled pursuant to the Company's Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
13.9 Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare, or other benefit plan of the Company or any Affiliate except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.
13.10 Successors. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company.
13.11 Expenses. The expenses of administering the Plan shall be borne by the Company and its Affiliates.
13.12 Term of Plan. The Plan shall terminate on February 27, 2033, but all outstanding Awards as of the date of termination shall remain in effect and the terms of the Plan shall apply until such Award terminates as provided in the applicable Award Agreement.
13.13 Not an Employment Contract. Nothing contained in the Plan or in any Award Agreement shall confer upon any Participant of an Award any right with respect to the continuation of his or her employment, consulting, Board member relationship or other association with the Company (or any Affiliate), or interfere in any way with the right of the Company (or any Affiliate), subject to the terms of any separate employment, consulting or Board member agreement or provision of law or corporate articles or by-laws to the contrary, at any time to terminate such employment, consulting or Board member agreement or to increase or decrease, or otherwise adjust, the other terms and conditions of the recipient's employment, consulting, Board member relationship or other association with the Company and its Affiliates.
ANNEX C
Proposed Amendment to the Certificate of Incorporation of Anywhere Real Estate, Inc.
As amended, Article IX would read as follows, with additions indicated by bold underlining and deletions by strike-out:
ARTICLE IX
LIMITED LIABILITY
To the extent permitted by the DGCL, a No director or Officer (as defined below) of the Corporation will not be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director or Officer, except for liability of: (i) a director or Officer for any breach of the director's or Officer’s duty of loyalty to the Corporation or its stockholders, (ii) a director or Officer for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) a director under Section 174 of the DGCL (or any successor provision thereto), or (iv) a director or Officer for any transaction from which the director or Officer derived any improper personal benefit, or (v) an Officer in any action by or in the right of the Corporation. Any amendment, repeal or amendment or modificationelimination of this Article IX by the stockholders of the Corporation or by changes in applicable law, or the adoption of any provision of this Amended and Restated Certificate of Incorporation inconsistent with this Article IX, will, to the extent permitted by applicable law, be prospective only (except to the extent such amendment or change in applicable law permits the Corporation to provide a broader limitation on a retroactive basis than permitted prior thereto), and will not adversely affect any limitation on the personal liability of any director of the Corporation at the time ofwill not adversely affect its application with respect to an act or omission by a director or Officer occurring before such amendment, repeal or amendment or modification or adoption of such inconsistent provisionelimination. If any provision of the DGCL is amended to authorize corporate actionthe further eliminating or limitingelimination or limitation of the personal liability of directors or Officers, then the liability of our directors and/or Officers (as applicable) of the Corporation will be eliminated or limited to the fullest extent permittedauthorized by the DGCL, as so amended. All references in this Article IX to an "Officer" shall mean only a person who, at the time of an act or omission as to which liability is asserted, falls within the meaning of the term “officer,” as defined in Section 102(b)(7) of the DGCL.
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