FORWARD-LOOKING STATEMENTS
Some of the statements contained in this Proxy Statement, may constitute “forward-looking statements” for purposesthe words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of the federal securities laws. Oursuch terms and other similar expressions are intended to identify forward-looking statements, include, butalthough not all forward-looking statements contain such identifying words. Such forward-looking statements are not limitedbased on management’s current expectations and assumptions about future events and are based on currently available information as to statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the futureoutcome and our Proposed Business Combination. In addition, any statements that refer to projections, forecasts or other characterizationstiming of future events. Except as otherwise required by applicable law, the Company disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances including any underlying assumptions, are forward-looking statements.
The words “anticipate,” “believe,” “continue,” “could,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “should,” “would” and similar expressions may identify forward-looking statements, butafter the absencedate of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Proxy Statement may include, for example, statements about:
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our ability to complete the Proposed Business Combination (or another initial business combination);
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the anticipated benefits of a business combination; or
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the volatility of the market price and liquidity of Aurora shares and other securities of Aurora.
The forward-looking statements contained in this Proxy Statement are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated.Statement. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under “Item 1A. Risk Factors” ofin the Company’s Annual Report on Form 10-K filedfor the fiscal year ended December 31, 2023 (the "2023 Annual Report"), as well as the Company’s most recent quarterly report on Form 10-Q.
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ii | | Better Home & Finance Holding Company 2024 Proxy Statement |
Our Company
About Better Home & Finance
Better Home & Finance principally operates a digital-first homeownership company with services including mortgage financing, real estate services, title and homeowners’ insurance. We offer a selection of loan products for home purchase and refinance, including cash-out refinance, debt consolidation and home equity lines of credit, across a range of maturities and interest rates as well as a suite of non-mortgage products, including real estate agent services offered by our network of third-party partner real estate agents and, through our insurance partners, title insurance and settlement services, and homeowners insurance.
Business Combination
On August 22, 2023, we consummated the transactions contemplated by the Agreement and Plan of Merger, dated as of May 10, 2021 (as amended, the “Merger Agreement”), by and among Aurora Acquisition Corp. (“Aurora”), Better Holdco, Inc. (“Pre-Business Combination Better”), and Aurora Merger Sub I, Inc., formerly a wholly owned subsidiary of Aurora (“Merger Sub”). On that date, Merger Sub merged with and into Pre-Business Combination Better, with Pre-Business Combination Better surviving the merger (the “First Merger”) and Pre-Business Combination Better merged with and into Aurora, with Aurora surviving the merger and changing its name to “Better Home & Finance Holding Company” (referred to as “Better Home & Finance”) (such merger, the “Second Merger,” and together with the SECFirst Merger, the “Business Combination” and the completion thereof, the “Closing”). In connection with the Closing of the Business Combination, the Company’s Class A common stock, par value $0.0001 per share (“Class A Common Stock”), and warrants to purchase shares of Class A Common Stock at an exercise price of $11.50 per share ("Warrants") began trading on the Nasdaq Global Market and Nasdaq Capital Market, respectively, under the ticker symbols “BETR” and "BETRW.” On March 13, 2024, the Company’s Class A Common Stock transferred listing from the Nasdaq Global Market to the Nasdaq Capital Market.
Unless otherwise indicated, references to “Better,” “Better Home & Finance,” the “Company,” “we,” “us,” “our” and other similar terms refer to (i) Pre-Business Combination Better and its consolidated subsidiaries prior to the Closing and (ii) Better Home & Finance and its consolidated subsidiaries following the Closing.
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Better Home & Finance Holding Company 2024 Proxy Statement | | 1 |
Proposal 1 - Election of Directors
Director Nominees
Our Corporate Governance and Nominations Committee and our Board have determined that each of the nominees possesses the right skills, qualifications and experience to oversee our long-term business strategy. Biographical information about each nominee, as well as highlights of certain notable skills, qualifications and experience that contributed to the nominee’s selection as a member of our Board and nomination for re-election at our 2024 Annual Meeting, are set forth below.
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Name | Principal Occupation | Age |
Harit Talwar | Former Partner, Goldman Sachs and Former President, U.S. Cards, Discover Financial Services | 63 |
Vishal Garg | Chief Executive Officer, Better Home & Finance | 46 |
Michael Farello | Managing Partner, L Catterton | 59 |
Arnaud Massenet | Managing Partner, NaMa Capital Advisors LLP | 58 |
Prabhu Narasimhan | Managing Partner, NaMa Capital Advisors LLP | 44 |
Steven Sarracino | Founder and Chief Executive Officer, Activant Capital Group, LLC | 47 |
Riaz Valani | General Partner and Founder, Global Asset Capital | 47 |
Harit Talwar, Chairman
Mr. Talwar has served as a member of our board of directors (the "Board") and our Chairman since the Closing. Mr. Talwar served as Chairman of the board of directors of Pre-Business Combination Better (the "Pre-Business Combination Better Board") from May 2022 until the Closing. He was most recently at Goldman Sachs, where he served as Chairman of the Consumer Business from January 2021 through December 2021 and Global Head of the Consumer Business from May 2015 to January 2021, leading the firm’s entry into the consumer space and helping to build Marcus by Goldman Sachs as the division’s head and first employee. Prior to Goldman Sachs, Mr. Talwar was President, U.S. Cards, at Discover Financial Services. He also worked at Citicorp/Citigroup for 15 years in various management roles. Mr. Talwar has served as a member of the board of directors of Mastercard Inc. since April 2022. In addition, Mr. Talwar has served as a member of the board of directors of KPMG U.S. since January 2024, a member of the board of directors of Apexon, a digital engineering services company, since 2022 and a member of the board of directors of Inveniam, a block chain company digitizing assets in private markets, since 2023. Mr. Talwar holds a B.A. in economics from Delhi University and an M.B.A. from the Indian Institute of Management, Ahmedabad. Mr. Talwar was selected to serve on the Board and as Chairman of the Board due to his strong background in direct-to-consumer financial businesses and experience building public companies.
Vishal Garg, Chief Executive Officer
Mr. Garg has served as a member of our Board and Chief Executive Officer of the Company since the Closing. Mr. Garg founded Pre-Business Combination Better and served as Chief Executive Officer of Pre-Business Combination Better from its inception in 2015 until the Closing. Since 1999, Mr. Garg has served as the founding partner of 1/0 Capital, an investment holding company focused on creating and investing in businesses within consumer finance, technology and digital marketing, and which is a significant stockholder of the Company. Before this, Mr. Garg was an entrepreneur in the consumer finance industry. Mr. Garg holds a B.S. in Finance and International Business from New York University. Mr. Garg was selected to serve on the Board due to, among other things, the perspective and experience he brings as our Chief Executive Officer and co-founder of Pre-Business Combination Better.
Michael Farello
Mr. Farello has served as a member of our Board since the Closing. Mr. Farello served as a member of the Pre-Business Combination Better Board from February 2020 until the Closing. He is also a Managing Partner of L Catterton, a private equity firm, focused on its Growth fund, a position he has held since January 2006. Mr. Farello serves as a member of the board of several private companies, and on several of their audit committees and compensation committees. In addition, since July 2015, Mr. Farello has served on the board of directors of Vroom, an e-commerce used vehicle sales platform, including as chair of the compensation committee since July 2015. Mr. Farello holds a B.S. in industrial engineering from Stanford University and an M.B.A. from Harvard Business School. Mr. Farello was selected to serve on the Board due to his strong background in technology and direct-to-consumer businesses, knowledge of growth strategies, and extensive board and committee experience.
Arnaud Massenet
Mr. Massenet has served as a member of our Board since the Closing. Mr. Massenet served as Chief Executive Officer of
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Better Home & Finance Holding Company 2024 Proxy Statement | | 1 |
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Proposal 1 - Election of Directors |
Aurora and as an executive officer of Novator Capital Sponsor Ltd., a Cyprus limited liability company (the "Sponsor"), in each case from inception until the Closing. Mr. Massenet is a managing partner of NaMa Capital Advisors LLP (previously Novator Capital). Mr. Massenet holds a Bachelor of Arts from the Lincoln International School of Business in Paris, France and a M.B.A. from the University of North Carolina. Mr. Massenet started his career in 1994 in banking at Morgan Stanley & Co. He became the Head of Morgan Stanley’s derivatives group in London, United Kingdom, in 1998. In 2003, Mr. Massenet started Lehman Brothers Inc.’s corporate derivatives group (Capital Market) before exiting in 2007 to start South West Capital, a hedge fund focused on real asset investments. Mr. Massenet cofounded Net-a-Porter in 1999, which was sold in a 2-step sale in 2010 and 2015 to the Richemont Group. Mr. Massenet is currently a board member of Grip, a subsidiary of Intros.at Ltd., an artificial intelligence company specialized in organizing virtual conferences for corporate and virtual meetings. Mr. Massenet also backed many successful tech companies, including Deliveroo, Care Wish Ltd., Houzz Ltd., Urban Ltd., Highsnobiety Inc., Invincible Ltd., NGM Ltd. and Ozon Ltd., and serves on the board of directors of Design Milk Co., a large interior design platform listed on the Australian stock exchange. Mr. Massenet was selected to serve on our Board due to his experience as a senior executive, his experience in investment, marketing and business development, and his experience serving on the boards of directors of other public and private companies.
Prabhu Narasimhan
Mr. Narasimhan has served as member of our Board since the Closing. Mr. Narasimhan served as Aurora’s Chief Investment Officer and as an executive officer of the Sponsor, in each case from inception until the Closing. Mr. Narasimhan is a managing partner of NaMa Capital Advisors LLP (previously Novator Capital) that Mr. Narasimhan co-founded in 2020 together with Thor Björgólfsson and Chiehmi Chan. Mr. Narasimhan has over 15 years of experience as a lawyer at three leading international law firms, two as partner (Mayer Brown, White & Case and Baker & McKenzie). During his time at White & Case, Mr. Narasimhan held the position of partner and Global Head of Family Offices, advising high net worth family offices on all transactional aspects (mergers and acquisitions, bank finance, tax, structuring and execution) of their investments. Mr. Narasimhan then moved to Baker & McKenzie to found their London headquartered Alternative Capital practice, acting as a senior strategic advisor to multi-billion dollar family offices and private equity funds on multibillion dollar mergers and acquisitions and equity and debt capital markets transactions worldwide. His re-structuring of ATP Media Operations Ltd.’s, or ATP Media, tennis broadcasting rights and his crafting of fiscal stimulus laws in Europe have been widely recognized and commended, particularly by the FT Innovative Lawyers awards. Additionally, in 2020, Mr. Narasimhan was appointed to the board of directors of the media company, Prime Focus World, N.V. Mr. Narasimhan was selected to serve on our Board due to his due to his extensive legal experience as well as his investment and business development experience.
Steven Sarracino
Mr. Sarracino has served as a member of our Board since the Closing. Mr. Sarracino served as a member of the Pre-Business Combination Better Board from August 2019 until the Closing. He also serves as Founder and Chief Executive Officer of Activant Capital Group, LLC, a global investment firm, a position he has held since founding Activant in November 2012 and formally launching in January 2015. Mr. Sarracino has served on the board of over a dozen public and private companies including Upland Software, where he served on the audit committee of the board of directors from December 2013 to April 2016. Mr. Sarracino holds a B.B.A. in Finance from Southern Methodist University and an M.B.A. from the Wharton School at the University of Pennsylvania. Mr. Sarracino was selected to serve on the Board due to his strong background in high-growth company investment, knowledge of technology companies and extensive board experience.
Riaz Valani
Mr. Valani has served as a member of our Board since the Closing. Mr. Valani served as a member of the Pre-Business Combination Better Board from February 2021 until the Closing and previously from December 2015 to October 2017. Mr. Valani is a general partner and founder at Global Asset Capital, a private equity investor with diversified interests in venture capital, structured finance and real estate. He previously served as chairman of Viventures Partners SA, a global venture capital firm, president of IMDI/Sonique and a member of Gruntal & Co.’s asset securitization group. Mr. Valani also serves on the board of Pratham USA, a charity that supports the work of Pratham, an innovative learning organization created to improve the quality of education in India. In addition, Mr. Valani has been a principal investor in many private entities since 2000 and serves as a member of the board of several private companies. Mr. Valani was selected to serve on the Board due to his strong background in high-growth company investment, knowledge of technology companies and extensive knowledge of the Company and its business based on his involvement since our inception.
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☑ | The Board of Directors recommends that stockholders vote FOR the election of each of the director nominees. |
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2 | | Better Home & Finance Holding Company 2024 Proxy Statement |
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Proposal 1 - Election of Directors |
Although our Board does not anticipate that any of the nominees will be unable to stand for election as a director at our 2024 Annual Meeting, if this occurs, proxies will be voted in favor of such other person or persons as may be designated by our Corporate Governance and Nominations Committee and our Board.
How We Evaluate Director Nominees
Upon the recommendation of the Corporate Governance and Nominations Committee, our Board has nominated the seven nominees identified above under "Director Nominees" for election at our 2024 Annual Meeting. If elected, the nominees for election as directors will serve until the next annual meeting and until their successors are elected and qualified or until their death, resignation or removal. All of the nominees are currently directors of the Company. Each of the director nominees was elected during an extraordinary general meeting of stockholders of the Company held on August 11, 2023 (the “2023 Meeting”), in lieu of an annual meeting of stockholders.
The Corporate Governance and Nominations Committee, when making recommendations to the Board regarding director nominations, assesses the overall performance of the Board and its committees, and when re-nominating incumbent Board members or nominating new Board members, evaluates the potential candidate’s ability to make a positive contribution to the Board’s overall function. The Corporate Governance and Nominations Committee considers the actual performance and independence of incumbent Board members over the previous year (or shorter period for directors not serving a full year), as well as whether members of the Board have appropriate experience, skills and other qualifications to support our role as a leading digital homeownership company. The particular experience, independence, qualifications, attributes and skills of the potential candidate are assessed by the Corporate Governance and Nominations Committee to determine whether the potential candidate possesses the professional and personal experiences and expertise necessary to enhance the Board’s mission. After conducting the foregoing analysis, the Corporate Governance and Nominations Committee makes recommendations to the Board regarding director nominees. In its annual assessment of director nominees, the Corporate Governance and Nominations Committee does not take a formulaic approach, but rather considers each prospective nominee’s diversity in viewpoints, personal and professional experiences and background and ability. In making director nominations, the Corporate Governance and Nominations Committee evaluates the Board considering, among other things, the attributes discussed in “Corporate Governance—Board Diversity” below.
The Board also evaluates, from time to time, the size of the Board as well as the structure and membership of its committees. In determining the number of directors, committee membership and structure of the committees, the Board considers several factors, including the attributes and experience of the members of our Board, the oversight responsibilities required for a Company of our size and complexity and the Corporate Governance Requirements of the listing rules of Nasdaq (the "Nasdaq Corporate Governance Rules"). For additional information on the Board selection process see "Corporate Governance" below.
Director Election Standards
The Company maintains a “majority” voting standard for uncontested elections. For a nominee to be elected to our Board, the nominee must receive more “for” than “against” votes. In accordance with our corporate governance guidelines (the "Corporate Governance Guidelines"), each nominee standing for election or re-election as a director must, if the nominee fails to receive a sufficient number of votes contemplated by our bylaws (the "Bylaws"), promptly tender a written offer of resignation to the Board. The Corporate Governance and Nominations Committee will make a recommendation to the Board as to whether to accept or reject the resignation, or whether other action should be taken. In the event of a contested director election, a plurality standard will apply.
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Better Home & Finance Holding Company 2024 Proxy Statement | | 3 |
Corporate Governance
Our business is managed under the direction of our Board. Our Board is committed to sound corporate governance and promoting the long-term interests of our stockholders by adopting structures, policies and practices that promote responsible oversight of management.
Director Independence
Our Corporate Governance Guidelines require that a majority of our Board consist of directors who are neither officers nor employees of the Company or its subsidiaries (and have not been officers or employees within the previous three years), do not have a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, and are otherwise “independent directors” under the rules of the Nasdaq Corporate Governance Rules.
Rule 5605 of the Nasdaq Corporate Governance Rules ("Nasdaq Rule 5605") requires that a majority of our Board be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
In accordance with our Corporate Governance Guidelines, the Nasdaq Corporate Governance Rules and the director independence standards adopted by the Board on March 25,22, 2024, the Board conducted its review of all relationships between the Company and each director and director nominee and has affirmatively determined that, with the exception of Mr. Garg, none of them has a material relationship with the Company or any other relationship that would preclude his independence under Nasdaq Rule 5605. Accordingly, the Board has determined that each of our current directors, other than Mr. Garg, is an independent director under the Nasdaq Corporate Governance Rules.
Board Evaluation Process
The Corporate Governance and Nominations Committee leads the Board in an annual self-evaluation to determine whether it and its committees are functioning effectively. The Corporate Governance and Nominations Committee is responsible for oversight of the evaluation process and reports on the process to the Board.
In addition, each committee of the Board conducts annual evaluations of its performance and reports to the Board on such evaluation. The Corporate Governance and Nominations Committee reviews the evaluations prepared by each Board committee of such committee's performance and determines whether to propose any changes to the Board.
As part of the self-assessment process, each Board and committee member provides feedback on a range of topics relevant to the performance and effectiveness of the Board and the applicable committee. During our first six months as a public company, we conducted a modified evaluation process in connection with our development of a Board candidate vetting process. Below is a summary of the evaluation process utilized in early 2024.
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Step 1 Board and Committee Evaluations | The Board engaged an independent external advisor specializing in corporate board composition and development to coordinate the Board’s self-assessment by its members in support of its candidate pipeline build. The advisor provided a list of topics to each director and then performed one-on-one confidential interviews with each of the directors. |
Step 2 Initial Report | The independent external advisor prepared and presented a report to Mr. Talwar, who serves as Chair of the Corporate Governance and Nominations Committee and Chairman of the Board, that aggregated and summarized the findings of the advisor based on the interviews that were conducted. All responses from directors were kept confidential and anonymous. |
Step 3 Board and Committee Review | The aggregated results were presented to the Corporate Governance and Nominations Committee for its review and discussion, at which time the Committee considered what, if any, actions might be implemented to enhance future performance of the Board as it evaluates the size, structure and composition of the Board, as well as the role, composition and allocation of responsibilities among Board committees. |
Meetings and Committees of the Board
The Pre-Business Combination Better Board held a total of five meetings in 2023 prior to the Business Combination, and the Board held a total of four meetings in 2023 following the Business Combination. Each of the directors (other than Mr. Valani) attended 100% of the meetings of the Pre-Business Combination Better Board and the Board and meetings held by
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4 | | Better Home & Finance Holding Company 2024 Proxy Statement |
committees of the Pre-Business Combination Better Board and the Board on which he served. During 2023, Mr. Valani attended less than 75% of the aggregate of the combined total number of meetings the Pre-Business Combination Better Board and the Board and the total number of meetings held by all committees of the Pre-Business Combination Better Board and the Board on which he served. We do not have a policy regarding directors’ attendance at our annual meeting. Two of the members of our Board, Messrs. Massenet and Narasimhan, attended the 2023 Meeting.
The following table sets forth the current members of our Board who served on Committees in 2023, the standing committees of the Board on which they served, the chairs of the committees and the number of committee meetings held during 2023 following the consummation of the Business Combination:
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Director | Audit Committee | Compensation Committee | Corporate Governance and Nominations Committee |
Harit Talwar | M | M | C |
Michael Farello | M | M | |
Steven Sarracino | C | M | M |
Riaz Valani | | C | M |
Number of 2023 Meetings after the Business Combination | 5 | 3 | 2 |
C - Chair M - Member
On March 22, 2024, Mr. Valani stepped down as the chair and a member of the Compensation Committee and as a member of the Corporate Governance and Nominations Committee, and the Board, based upon the recommendation of the Governance and Nominations Committee, appointed Mr. Massenet as a member the Corporate Governance and Nominations Committee and Mr. Narasimhan as the chair and as a member of the Compensation Committee.
Roles and Responsibilities of the Board and Committees
Our Board directs the management of the Company’s business and affairs, as provided by Delaware law, and conducts its business through meetings of the Board and standing committees as well as special committees that may be established by the Board from time to time.
Our Board has three standing committees: the audit committee (the "Audit Committee"), the compensation committee (the "Compensation Committee") and the corporate governance and nominations committee (the "Corporate Governance and Nominations Committee"). Each committee has a written charter and each charter is available on the “Investor Relations—Governance—Governance Documents” portion of our website, www.better.com.
Audit Committee
Our Audit Committee is responsible for, among other things:
•appointing, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm;
•discussing with our independent registered public accounting firm their independence from management;
•reviewing, with our independent registered public accounting firm, the scope and results of their audit;
•approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm;
•overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the quarterly and annual financial statements that we file with the U.S. Securities and Exchange Commission ("SEC") as well as certifications required under Section 302 of the Sarbanes-Oxley Act of 2022 (the "Sarbanes-Oxley Act");
•overseeing our internal audit function, financial and accounting controls and compliance with legal and regulatory
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Better Home & Finance Holding Company 2024 Proxy Statement | | 5 |
requirements;
•reviewing our policies on risk assessment and risk management;
•review, in consultation with the Company's management, independent auditor and internal audit function, the adequacy of the Company's internal control over financial reporting and disclosure processes;
•reviewing related person transactions;
•review and assess the Company's system to monitor compliance with and enforcement of the Code of Conduct and oversee the MECC; and
•establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters.
Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Nasdaq Corporate Governance Rules require that our Audit Committee be composed entirely of independent members. Our Board has affirmatively determined that each member of our Audit Committee meets the definition of “independent director” for purposes of serving on the Audit Committee under Rule 10A-3 of the Exchange Act and the Nasdaq Corporate Governance Rules. Each member of our Audit Committee also meets the financial literacy requirements of Nasdaq Corporate Governance Rules. In addition, our Board has determined that Messrs. Sarracino and Talwar each qualify as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.
Compensation Committee
Our Compensation Committee is responsible for, among other things:
•reviewing, and recommending for approval by our Board, the compensation of our Chief Executive Officer and other executive officers;
•reviewing and approving or making recommendations to our Board regarding our incentive compensation and equity-based plans, policies and programs and administering equity-based plans;
•reviewing and making recommendations to our Board relating to management succession planning, including for our Chief Executive Officer;
•making recommendations to our Board regarding the compensation of our directors;
•retaining and overseeing any compensation consultants; and
•reviewing our strategies related to human capital management and reviewing and discussing with management our strategies in support of an inclusive and diverse company culture.
Our Board has affirmatively determined that each member of our Compensation Committee meets the definition of “independent director” for purposes of serving on the Compensation Committee under the Nasdaq Corporate Governance Rules and are “non-employee directors” as defined in Rule 16b-3 under the Exchange Act.
Corporate Governance and Nominations Committee
Our Corporate Governance and Nominations Committee is responsible for, among other things:
•identifying individuals qualified to become members of our Board, consistent with criteria approved by our Board;
•recommending to our Board the directors to be appointed to each committee of our Board and periodically reviewing and making recommendations to our Board for changes or rotations of committee members, the creation of additional committees, changes in committee charters or the dissolution of committees;
•periodically reviewing our Board’s leadership structure and recommending any proposed changes to our Board;
•overseeing an annual evaluation of the effectiveness of our Board and its committees; and
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6 | | Better Home & Finance Holding Company 2024 Proxy Statement |
•reviewing and making recommendations to our Board relating to management succession planning, including for our Chief Executive Officer.
Our Board has affirmatively determined that each member of our Corporate Governance and Nominations Committee meets the definition of “independent director” under the Nasdaq Corporate Governance Rules.
Risk Oversight
Our Board works with management to set the strategic objectives of the Company andto monitor progress on those objectives. The Board periodically receives reports from management on the Company's progress with respect to its strategic goals and the risks that could impact the achievement of those goals. The Board oversees risk management in part through its various committees. The Audit Committee focuses on financial risk, including internal controls, and annually reviews with management our guidelines and policies and the commitment of internal audit resources as they relate to risk management. The Audit Committee also oversees cybersecurity risk and other information technology risks to our business.
In addition to the committees of the Board, the Company’s management is involved in risk oversight. The Company’s Enterprise Risk Management Committee was established to consider the Company's day-to-day risk tolerance thresholds, identify risk across all functions, departments and subsidiaries, assess identified risks in terms of both likelihood and impact, mitigate risks that exceed such risk tolerance threshold and ensure employees are trained to make informed decisions about identifying and managing risk. The Enterprise Risk Management Committee consists of members of management and is not a formal Board committee.
The Management, Ethics & Compliance Committee (the "MECC") is separate from the Enterprise Risk Management Committee. It is a committee composed of members of management that was established by the Board to investigate and resolve ethics and compliance violations. The MECC oversees implementation of the Company's Code of Conduct, conducts periodic culture reviews, assesses matters related to ethics and compliance (and reports matters, as necessary, to the Audit Committee) and assists the Board in its oversight of Company matters.
The Enterprise Risk Management Committee and MECC provide the Board with added assurance about the Company’s risk management practices. Our Chief Compliance Officer serves as Chair of each of the Enterprise Risk Management Committee and MECC and reports to the Audit Committee periodically on their activities.
Board Diversity
The Corporate Governance Guidelines and the Corporate Governance and Nominations Committee charter specify that the Corporate Governance and Nominations Committee considers several factors, including diversity, when evaluating or conducting searches for directors. The Corporate Governance and Nominations Committee interprets diversity broadly to include a variety of opinions, perspectives, personal and professional experiences and backgrounds, such as international and multicultural experience and understanding, as well as other differentiating characteristics, including race, ethnicity and gender.
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Board Diversity Matrix (as of April [19], 2024) | |
Total Number of Directors | 8 | |
| Female | Male | Non-Binary | |
Part I: Gender Identity | | | | |
Directors | — | 8 | — | |
Part II: Demographic Background | | | | |
Asian | — | 4 | — | |
White | — | 4 | — | |
Director Search
In identifying prospective director candidates for the Board, the Corporate Governance and Nominations Committee may seek referrals from other members of the Board, management, stockholders and other sources. The Corporate Governance and Nominations Committee also may, but need not, retain a professional search firm in order to assist it in these efforts. The Corporate Governance and Nominations Committee and the Board utilize the same criteria for evaluating candidates regardless of the source of the referral.
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Corporate Governance Guidelines
The Corporate Governance Guidelines provide that the Corporate Governance and Nominations Committee is responsible for selecting, or recommending for the Board’s selection, the slate of director nominees for election to the Board and for filling vacancies occurring between annual meetings of stockholders. In selecting, or recommending for the Board’s selection, individuals for nomination, the Corporate Governance and Nominations Committee takes into account the following criteria, among others:
•Current knowledge, competency, or subject matter expertise in the Company’s lines of business, industry or other industries relevant to the Company’s business;
•Personal qualities and characteristics, accomplishments and reputation in the business community;
•Ability and willingness to commit adequate time to Board and committee matters;
•The fit of the individual’s skills and experience with those of other directors and potential directors in building a board that is effective, collegial and responsive to the needs of the Company;
•Diversity of viewpoints, background, experience and other demographics (including racial and gender diversity); and
•Tenure of existing directors and potential need to refresh the Board.
The Corporate Governance and Nominations Committee will give appropriate consideration to candidates for Board membership proposed by eligible stockholders and will evaluate such candidates in the same manner as other candidates identified by or submitted to the Corporate Governance and Nominations Committee.
The Corporate Governance Guidelines also contain policies regarding director independence, simultaneous service on other boards and substantial changes relating to a director's position of principal employment. Among other things, the guidelines establish expectations for directors for meeting attendance and participation, loyalty and ethics and confidentiality. Our Corporate Governance Guidelines is available without charge on the “Investor Relations—Governance—Governance Documents” portion of our website, www.better.com.
Our Board Leadership
As indicated in our Corporate Governance Guidelines, the Board believes it is important to retain its flexibility to allocate the responsibilities of the offices of the Chairman of the Board and Chief Executive Officer in a manner that is in the best interests of our Company. The Board believes that the decision as to who should serve as Chairman and Chief Executive Officer, and whether the offices should be combined or separate, should be assessed periodically by the Board and that the Board should not be constrained by a rigid policy mandating the structure of such positions. The Board currently believes that the most effective and efficient leadership structure for our Company is for Mr. Garg to serve as Chief Executive Officer while Mr. Talwar serves as Chairman of our Board.
The Board believes that the current leadership structure is appropriate, benefits the Company by delineating separate roles of management and oversight over management and is recognized as a best corporate governance practice. Our Chief Executive Officer and his management team provide the overall strategy and daily leadership for our Company, and the Board, along with the Chairman, provides oversight and evaluates the performance of management. The Chairman, in consultation with the Chief Executive Officer, has responsibility for chairing and determining the length and frequency of Board meetings as well as setting the agenda for such meetings.
Non-employee members of the Board meet at regularly scheduled executive sessions without management. Executive sessions of the Board are chaired by the Chairman. Each of the committees also meets regularly in executive session without management, and the committee chair presides at the executive sessions.
Limitations on Liability and Indemnification
Our amended and restated certificate of incorporation ("Amended and Restated Certificate of Incorporation") and Bylaws provide indemnification and advancement of expenses for the directors and officers to the fullest extent permitted by the General Corporation Law of the State of Delaware (the "DGCL"), subject to certain limited exceptions. Better Home & Finance entered into indemnification agreements with each of its directors and executive officers. Each indemnification agreement provides for indemnification and advancement by Better Home & Finance of certain expenses and costs relating to claims, suits, or proceedings arising from service to Better Home & Finance or, at its request, service to other entities, as officers or directors to the maximum extent permitted by applicable law.
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These provisions may be held not to be enforceable for violations of the federal securities laws of the United States.
Compensation Committee Interlocks and Insider Participation
None of our executive officers serves as a member of the board of directors or compensation committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our Board or Compensation Committee.
Policy on Trading, Pledging and Hedging of Company Stock
Certain transactions in our securities (such as short sales) create a heightened compliance risk or could create the appearance of misalignment between our management and stockholders. Accordingly, our insider trading policy expressly prohibits members of our Board and executive officers (and their immediate family members, others who reside in their household, others whose transactions in the Company’s securities are subject to their influence or control, and trusts or entities over which they have control) from engaging in hedging or monetization transactions of any type involving the Company’s securities, including the use of collars, forward sale contracts, equity swaps, and exchange funds.
Code of Business Conduct and Ethics
We have adopted a written code of business conduct and ethics (the “Code of Conduct”) that applies to our directors, officers and employees. A copy of the Code of Conduct can be found at http://investors.better.com/governance/governance-documents under the link “Code of Business Conduct and Ethics.” In addition, we intend to post on our website all disclosures that are required by law or the Nasdaq Corporate Governance Rules concerning any amendments to, or waivers from, any provision of the Code of Conduct.
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Director Compensation
The Company does not currently have a compensation program for its non-employee directors but has occasionally granted awards of restricted stock units ("RSUs") based on shares of Common Stock (as defined herein) and options to purchase shares of Common Stock ("Stock Options"), in each case, pursuant to the Better Holdco, Inc. 2016 Equity Incentive Plan (the "2016 Plan"), the Better Holdco, Inc. 2017 Equity Incentive Plan (the "2017 Plan") or the Better Home & Finance Holding Company 2023 Incentive Equity Plan (the "2023 Plan") to non-employee directors when deemed appropriate. In 2023, Mr. Talwar was compensated pursuant to an agreement with Pre-Business Combination Better, which was assumed by the Company on the closing of the Business Combination and is described below. None of the other non-employee directors received compensation from the Company in 2023 for serving as a member of our Board.
Chairman Agreement with Harit Talwar
Mr. Talwar is party to an agreement with Pre-Business Combination Better, dated as of April 27, 2022 (the "Chairman Agreement"), in connection with his appointment as the Chairman of the Board, commencing on May 1, 2022 (the “Talwar Effective Date”). Pursuant to the terms of the Chairman Agreement, which was assumed by the Company on the Closing of the Business Combination, Mr. Talwar is entitled to $350,000 in cash as an annual retainer in consideration for his services as a member of our Board and an additional sum of $175,000 in cash per year for his service as Chairman of the Board. In addition, Pre-Business Combination Better agreed to pay up to $350,000 per year for Mr. Talwar's reasonable out-of-pocket clerical and other administrative support together with his domestic travel expenses.
Pursuant to the Chairman Agreement with Pre-Business Combination Better, on May 1, 2022, Mr. Talwar received a grant of 1,620,000 Pre-Business Combination Better RSUs, which, in connection with the Business Combination, converted into 4,951,644 RSUs based on Pre-Business Combination Better's outstanding shares and warrants being exchanged for approximately 3.06 shares (the "Exchange Ratio") of the Company’s Common Stock, and otherwise on the same terms and conditions that were in effect with respect to such Pre-Business Combination Better RSUs. 2,475,822 of such RSUs vest in equal installments quarterly over the four years following the Talwar Effective Date and 2,475,822 of such RSUs will vest subject to both (i) Mr. Talwar’s continuous services through the six month anniversary of the Talwar Effective Date and (ii) the achievement of performance conditions which provide that 825,274 RSUs will vest at a $1.7994 post-closing stock price (as adjusted from $5.50 by the Exchange Ratio in connection with the Business Combination), 825,274 RSUs will vest at an $3.5988 post-closing stock price (as adjusted from $11.00 by the Exchange Ratio in connection with the Business Combination) and 825,274 RSUs will vest at a $5.3982 post-closing stock price (as adjusted from $16.50 by the Exchange Ratio in connection with the Business Combination), in each case, measured based on the 45-day trailing average closing stock price. In the event of Mr. Talwar’s death or disability, any unvested time-vesting RSUs will continue to vest until they are settled and any performance-vesting RSUs will continue to vest as to time on the time-vesting date and remain eligible to vest as to performance for the three years after such termination. In the event Mr. Talwar leaves the Board at the Board's or stockholders’ initiative, any performance-vesting RSUs will vest as to time at termination and remain eligible to vest as to performance for two years after termination and (i) if such termination is prior to the second anniversary of the Talwar Effective Date, 50% of any outstanding time-vesting RSUs will vest at termination and (ii) any remaining unvested time-vesting RSUs will be forfeited. In connection with entry into the Chairman Agreement, Mr. Talwar entered into the Company’s standard indemnification agreement and is entitled to coverage under the Company’s directors’ and officers’ liability insurance policy.
2023 Director Compensation Table
The following table sets forth all of the compensation awarded to, earned by or paid to the Company’s non-employee directors during 2023, including before closing of the Business Combination. Other than the awards set forth in the following table, the non-employee directors did not receive cash compensation or equity awards during 2023, and there was no director compensation policy adopted by the Company. The Board may in the future approve and implement a compensation program for the non-employee directors.
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Name(1) | | Fees Earned or Paid in Cash ($) | | Stock Awards ($) | | Option Awards ($) | | All Other Compensation(2) ($) | | Total ($) |
Harit Talwar | | 525,000 | | | — | | | — | | | 50,853 | | | 575,853 | |
(1)All other non-employee directors during 2023 include Michael Farello, Arnaud Massenet, Prabhu Narasimhan, Steven Sarracino and Riaz Valani. Our non-employee directors, other than Mr. Talwar, did not receive any compensation in 2023 and as of December 31, 2023, our non-employee directors held the following equity awards: Mr. Talwar: 4,023,211 RSUs.
(2) Consists of payments and reimbursements for out-of-pocket clerical and other administrative support.
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Proposal 2 - Approval of One or More Amendments to Our Amended and Restated Certificate of Incorporation to Effect One or More Reverse Stock Splits
General
Our Board has adopted and is recommending that our stockholders approve one or more amendments to our Amended and Restated Certificate of Incorporation (such amendments, the “Amendments”) to effect one or more reverse stock splits of our Class A Common Stock, Class B common stock, par value $0.0001 per share (“Class B Common Stock”), and Class C common stock, par value $0.0001 per share ("Class C Common Stock" and together with Class A Common Stock and Class B Common Stock, the "Common Stock"), at a ratio of not less than one-for-two and not more than one-for-100 and in other reports the Company filesaggregate at a ratio of not more than one-for-100, inclusive, with the SEC. Shouldexact ratio for each reverse stock split within such range to be determined by the Board (or any duly constituted committee thereof) in its discretion (any such reverse stock split, the "Reverse Stock Split," and such ratio selected by the Board for a Reverse Stock Split, the "Reverse Split Ratio"). In connection with any Reverse Stock Split, the number of authorized shares of Class A Common Stock, Class B Common Stock and Class C Common Stock will be reduced proportionately with the Reverse Split Ratio and the reduction in outstanding Common Stock. Pursuant to the law of the State of Delaware, our state of incorporation, the Board must adopt an Amendment and submit the Amendment to stockholders for their approval. The proposed Amendment, one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as maywhich would be required under applicable securities laws.