Rocket Companies, Inc.

Current report

Risks Related to the Up-C Collapse

Current report

We may not obtain the expected benefits of the Up-C Collapse, and the costs and detriments may significantly exceed any benefits actually obtained.

Current report

We believe that the simplification of our organizational structure, and providing that each class of common stock of the Company will be entitled to one vote per share, will provide various benefits to the Company and its stockholders, including, among other things, by improving the Company’s ability to use its common stock as acquisition currency in acquisition transactions, creating a clearer corporate profile and enhancing equity liquidity. The expected benefits, however, may not materialize in part or in full, or the detriments may significantly outweigh the benefits that do materialize, due to an overestimation of such expected benefits or underestimation of detriments by management and factors that are unrelated to the Up-C Collapse or outside of our control, such as market conditions, changes in our revenue or expenses that offset such expected benefits or other circumstances that prevent us from taking advantage of the new attributes that we expect the Up-C Collapse will afford us. In addition, we may not fully realize such benefits within the time frame we expect following the consummation of the Up-C Collapse, and may not do so at all, and we may incur costs and detriments of the Up-C Collapse significantly in excess of the actual benefits.

Current report

In addition, the Transaction Agreement contains certain termination rights, including, among others, the right of the parties to terminate the Transaction Agreement if the mergers by which the Company will acquire RHI (collectively, the “Mergers”) pursuant to the Transaction Agreement have not been consummated on or prior to December 9, 2025. If the Transaction Agreement is terminated prior to completion of the Up-C Collapse, or if the parties otherwise abandon the Up-C Collapse, then the Company will have incurred significant transaction costs and the pursuit of the Up-C Collapse will have resulted in the distraction of the Company’s management from ongoing business operations and other opportunities that could have been beneficial to the Company, without realizing the expected benefits of the Up-C Collapse.

Current report

Delay in completing the Up-C Collapse could negatively impact the market price of shares of the Class A common stock and financial results of our business.

Current report

The obligation of the parties to complete the Up-C Collapse is subject to certain closing conditions, including, but not limited to, (i) the adoption of the amended and restated certificate of incorporation (the “Charter Amendment”) by the requisite approval of the Company’s stockholders (which was satisfied by the execution of the Written Consent, (ii) the absence of any governmental injunction or order prohibiting the consummation of (x) any of the Mergers or (y) the contribution and transfer to the Company by Mr. Gilbert of partnership units (the “Holdings LP Units”) of Rocket Merger Limited Partnership (“Holdings LP”), a Michigan limited partnership and an indirect subsidiary of the Company, and shares of Class D common stock held by Mr. Gilbert for the issuance to Mr. Gilbert of a number of fully paid and nonassessable shares of Class L common stock on a one-to-one basis (the “DG Exchange”) contemplated by the Transaction Agreement, (iii) at least 20 business days elapsing since the Company mailed the information statement relating to the Up-C Collapse to its stockholders, (iv) the absence of any change in applicable law or fact that will cause the Mergers, taken together, to fail to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code (the “Code”), (v) the accuracy of each party’s respective representations and warranties, generally subject to materiality qualifiers, (vi) the performance by the parties of their respective obligations under the Transaction Agreement in all material respects and (vii) the completion of the internal reorganization by RHI.

Current report

Any of these factors or others could delay the completion of the Up-C Collapse, which may in turn negatively affect our business and impact the market price of shares of the Class A common stock if such delay is not promptly remedied, or cause us to incur significant transaction, opportunity and other costs that may make it more difficult to realize the expected benefits of the Up-C Collapse. In addition, both the Redfin Acquisition and the Mr. Cooper Acquisition (the Redfin Acquisition and the Mr. Cooper Acquisition, together, the “acquisitions”) are conditioned on the consummation of the Up-C Collapse, and accordingly, a delay in the completion of the Up-C Collapse could result in a delay in the consummation of the Redfin Acquisition or the Mr. Cooper Acquisition.

Current report

Members of our management and our board of directors have interests in the Up-C Collapse that are different from, or in addition to, those of holders of shares of Class A common stock.

Current report

Holders of Class A common stock should recognize that members of our management and our board of directors may have interests in the Up-C Collapse that differ from, or are in addition to, their interests as holders of Class A common stock.

Current report

We are a holding company and our principal asset will be our equity interests in Holdings LP, and accordingly we will be dependent upon distributions from Holdings LP to pay taxes and other expenses.

Current report

We are a holding company and our principal asset is our ownership of Holdings LLC and, after the Up-C Collapse, will be our indirect ownership of Holdings LP. We have no independent means of generating revenue. As the sole member of Merger Sub 2, which will be the general partner of Holdings LP, we intend to cause Holdings LP to make distributions to us in amounts sufficient to cover any payments we are obligated to make under the Tax Receivable Agreement, dated as of August 5, 2020, by and among the Company, RHI and Mr. Gilbert (the “Tax Receivable Agreement”) for exchanges that have already occurred and other costs or expenses. However, certain laws and regulations may result in restrictions on Holdings LP’s ability to make distributions to us or the ability of Holdings LP’s subsidiaries to make distributions to it. To the extent that we need funds, and Holdings LP or its subsidiaries are restricted from making such distributions, we may not be able to obtain such funds on terms acceptable to us or at all and as a result could suffer an adverse effect on our liquidity and financial condition.

Current report

We may be required to pay RHI, RHI II and Mr. Gilbert for certain past tax benefits we may utilize, and the amounts we may pay could be significant.

Current report

We are party to a Tax Receivable Agreement with RHI and Mr. Gilbert that provides for the payment by us to RHI and Mr. Gilbert (or their transferees of common limited liability company interests (“Holdings LLC Units”) of Holdings LLC or other assignees) of 90% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize (computed using simplifying assumptions to address the impact of state and local taxes) as a result of: (i) certain increases in our allocable share of the tax basis in Holdings LLC’s assets resulting from (a) the purchases of Holdings LLC Units (along with the corresponding shares of Class D common stock or Class C common stock) from RHI and Mr. Gilbert (or their transferees of Holdings LLC Units or other assignees) using the net proceeds from our initial public offering (“IPO”) or in any future offering (subject to the terms of the amendment to the Tax Receivable Agreement to be entered into in connection with the Up-C Collapse, the “Tax Receivable Agreement Amendment”), (b) exchanges by RHI and Mr. Gilbert (or their transferees of Holdings LLC Units or other assignees) of Holdings LLC Units (along with the corresponding shares of Class D common stock or Class C common stock) for cash or shares of Class B common stock or Class A common stock, as applicable (subject to the terms of the Tax Receivable Agreement Amendment), or (c) payments under the Tax Receivable Agreement; (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the Tax Receivable Agreement; and (iii) disproportionate allocations (if any) of tax benefits to Holdings LLC as a result of section 704(c) of the Code, as amended, that relate to the reorganization transactions undertaken at the time of our IPO. The Tax Receivable Agreement makes certain simplifying assumptions regarding the determination of the cash savings that we realize or are deemed to realize from the covered tax attributes, which may result in payments pursuant to the Tax Receivable Agreement in excess of those that would result if such assumptions were not made.

Current report

The actual tax benefit, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including, among others, the amount and timing of the taxable income we generate in the future and the tax rate then applicable, and the portion of our payments under the Tax Receivable Agreement constituting imputed interest. Future payments under the Tax Receivable Agreement could be substantial. Of the estimated $572.04 million Tax Receivable Agreement liability to be recorded after the Up-C Collapse and pending Redfin Acquisition and Mr. Cooper Acquisition, as a result of the amount of the increases in the tax basis in Holdings LLC’s assets from the purchase of Holdings LLC Units (along with the corresponding shares of the Class D common stock) in connection with the IPO, the over-allotment option (greenshoe) and the RHI March 2021 paired interest exchange, assuming no material changes in the relevant tax law and that we will have sufficient taxable income to utilize all of the tax attributes covered by the Tax Receivable Agreement when they are first available to be utilized under applicable law, future payments to RHI, RHI II and Mr. Gilbert under the Tax Receivable Agreement would aggregate to approximately $571.92 million over the next 20 years and for yearly payments over that time to range between zero to $132.06 million per year. The payments under the Tax Receivable Agreement are not conditioned upon RHI’s, RHI II’s or Mr. Gilbert’s continued ownership of us.

Current report

In addition, RHI, RHI II and Mr. Gilbert (or their transferees or other assignees) will not reimburse us for any payments previously made if any covered tax benefits are subsequently disallowed, except that any excess payments made to RHI, RHI II and Mr. Gilbert (or such holder’s transferees or assignees) will be netted against future payments that would otherwise be made under the Tax Receivable Agreement with RHI, RHI II and Mr. Gilbert, if any, after our determination of such excess. We could make payments to RHI, RHI II and Mr. Gilbert under the Tax Receivable Agreement that are greater than our actual cash tax savings and may not be able to recoup those payments, which could negatively impact our liquidity. As part of RHI’s internal reorganization, RHI will contribute its rights to receive payments under the Tax Receivable Agreement in respect of RHI’s prior exchanges to RHI II, and RHI II will complete a joinder to become a party to the Tax Receivable Agreement. The Tax Receivable Agreement will be amended to provide that the terms of the Tax Receivable Agreement will not apply to any exchanges, including, for the avoidance of doubt, the DG Exchange, that occur, or are deemed to occur, on or following date of the Transaction Agreement.

Current report

Finally, because we are a holding company with no operations of our own, our ability to make payments under the Tax Receivable Agreement is dependent on the ability of our subsidiaries to make distributions to us. Our debt agreements may restrict the ability of our subsidiaries to make distributions to us, which could affect our ability to make payments under the Tax Receivable Agreement. To the extent that we are unable to make payments under the Tax Receivable Agreement as a result of restrictions in our debt agreements, such payments will be deferred and will accrue interest until paid, which could negatively impact our results of operations and could also affect our liquidity in periods in which such payments are made.

Current report

Our organizational documents may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium for their shares.

Current report

Prior to and following the Up-C Collapse, provisions of our certificate of incorporation and our bylaws may make it more difficult for, or prevent a third party from, acquiring control of us without the approval of our board of directors. Following the Up-C Collapse, these provisions include:

Current report

•having a classified board of directors;

Current report

•providing that, when Mr. Gilbert and Jennifer Gilbert and their permitted transferees (collectively, the “Gilberts”) beneficially own less than a majority of the combined voting power of the common stock, a director may only be removed with cause by the affirmative vote of 75% of the combined voting power of our common stock eligible to vote in the election of directors, voting together as a single class;

Current report

•providing that, when the Gilberts beneficially own less than a majority of the combined voting power of our common stock, vacancies on our board of directors, whether resulting from an increase in the number of directors or the death, removal or resignation of a director, will be filled only by our board of directors and not by stockholders;

Current report

•providing that, when the Gilberts beneficially own less than a majority of the combined voting power of our common stock, certain amendments to our certificate of incorporation or amendments to our bylaws will require the approval of 75% of the combined voting power of our common stock;

Current report

•prohibiting stockholders from calling a special meeting of stockholders;

Current report

•authorizing stockholders to act by written consent only until the Gilberts cease to beneficially own a majority of the combined voting power of our common stock;

Current report

•establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings;

Current report

•authorizing “blank check” preferred stock, the terms and issuance of which can be determined by our board of directors without any need for action by stockholders; and

Current report

•providing that the decision to transfer our corporate headquarters outside of Detroit, Michigan will require the approval of 75% of the combined voting power of our common stock.

Current report

Additionally, Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”) prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder, unless the business combination is approved in a prescribed manner. An interested stockholder includes a person, individually or together with any other interested stockholder, who within the last three years has owned 15% of our voting stock. We opted out of Section 203 of the DGCL, but our certificate of incorporation includes, and the restatement of the Charter Amendment (the “Restated Charter”) will include, a provision that restricts us from engaging in any business combination with an interested stockholder for three years following the date that person becomes an interested stockholder. Such restrictions, however, do not apply to any business combination between RHI, any direct or indirect equityholder of RHI as of immediately prior to the closing date of the Up-C Collapse, and under the Restated Charter, will not apply to any business combination between RHI II, any direct or indirect equityholder of RHI as of immediately prior to the closing date of the Up-C Collapse, or, in each case, any of their respective affiliates or successors or any “group,” or any member of any such group, to which such persons are a party under Rule 13d-5 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Current report

Until the Gilberts cease to beneficially own at least 50% of the voting power of our common stock, the Gilberts will be able to control all matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation and certain corporate transactions. Together, these provisions of our certificate of incorporation and bylaws could make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for the Class A common stock. Furthermore, the existence of the foregoing provisions, as well as the significant amount of Class A common stock beneficially owned by the Gilberts, could limit the price that investors might be willing to pay in the future for shares of the Class A common stock. They could also deter potential acquirers of us, thereby reducing the likelihood that you could receive a premium for your Class A common stock in an acquisition.

Current report

Our Restated Charter will continue to contain a provision renouncing our interest and expectancy in certain corporate opportunities.

Current report

Our certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities by RHI, its affiliates, or any officer, director, member, partner or employee of RHI and its affiliates (each, an “RHI Party”). Our certificate of incorporation provides that no RHI Party has any duty to refrain from engaging in the same or similar business activities or lines of business as us, doing business with any of our clients or suppliers or employing or otherwise engaging or soliciting for employment any of our directors, officers or employees, and none of our directors or officers will be liable to us or to any of our subsidiaries or stockholders for breach of any fiduciary or other duty under statutory or common law, as a director or officer or controlling stockholder or otherwise, by reason of any such activities, or for the presentation or direction to, or participation in, any such activities by any RHI Party. Our certificate of incorporation provides that, to the fullest extent permitted by applicable law, we renounce our right to certain business opportunities, and that each RHI Party has no duty to communicate or offer such business opportunity to us and will not be liable to us or any of our stockholders for breach of any fiduciary or other duty under statutory or common law, as a director, officer or controlling stockholder, or otherwise, by reason of the fact that any such individual pursues or acquires such business opportunity, directs such business opportunity to another person or fails to present such business opportunity, or information regarding such business opportunity, to us. Upon the adoption of the Restated Charter, our certificate of incorporation will provide that the preceding provisions will not apply to the RHI Parties but instead to RHI II, its affiliates and any officer, director, member, partner or employee of RHI II and its affiliates (each, an “RHI II Party”). These provisions of our Restated Charter will create the possibility that a corporate opportunity of ours may be used for the benefit of an RHI II Party.

Current report

Our Restated Charter will continue to require exclusive forum in certain courts in the State of Michigan or the State of Delaware or the federal district courts of the United States for certain types of lawsuits, which may have the effect of discouraging lawsuits against our directors and officers.

Current report

Our certificate of incorporation requires, and our Restated Charter will require, to the fullest extent permitted by law, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or stockholders to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the DGCL or our certificate of incorporation or our bylaws or (iv) any action asserting a claim against us governed by the internal affairs doctrine has to be brought only in the Third Judicial Circuit, Wayne County, Michigan (or, if the Third Judicial Circuit, Wayne County, Michigan lacks jurisdiction over such action or proceeding, then another state court of the State of Michigan or, if no state court of the State of Michigan has jurisdiction, the United States District Court for the Eastern District of Michigan) or the Court of Chancery of the State of Delaware (or if the Court of Chancery of the State of Delaware lacks jurisdiction, any other state court of the State of Delaware, or if no state court of the State of Delaware has jurisdiction, the federal district court for the District of Delaware), unless we consent in writing to the selection of an alternative forum. The foregoing provision does not apply to claims arising under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”), the Exchange Act or other federal securities laws for which there is exclusive federal or concurrent federal and state jurisdiction. Additionally, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Although we believe these exclusive forum provisions benefit us by providing increased consistency in the application of Delaware or Michigan law and federal securities laws in the types of lawsuits to which each applies, the exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers or stockholders, which may discourage lawsuits with respect to such claims. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder as a result of our exclusive forum provisions. Further, in the event a court finds either exclusive forum provision contained in our certificate of incorporation to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

Current report

Future sales of the Class A common stock, or the perception in the public markets that these sales may occur, following the expiration or waiver of the Lock-Up Periods or otherwise, may depress the price of the Class A common stock.

Current report

Sales of a substantial number of shares of our common stock in the public market, or the perception that such sales may occur, could have an adverse effect on our stock price and could impair our ability to raise capital through the sale of additional stock. In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional shares of our common stock. Issuing additional shares of Class A common stock, Class L common stock or other equity securities or securities convertible into equity may dilute the economic and voting rights of our existing stockholders or reduce the market price of the Class A common stock or both.

Current report

As of May 2, 2025, we had 151,272,632 shares of Class A common stock outstanding and 1,848,879,483 shares of Class A common stock issuable upon potential exchanges and/or conversions. Of these shares, 1,851,134,386 are “restricted securities,” as that term is defined under Rule 144 of the Securities Act. The holders of these “restricted securities” are entitled to dispose of their shares pursuant to (i) the applicable holding period, volume and other restrictions of Rule 144 or (ii) another exemption from registration under the Securities Act. In addition, following the Up-C Collapse, we expect to have 1,848,879,483 shares of Class L common stock outstanding, all of which will be “restricted securities” and subject to certain restrictions on transfer until the expiration of the applicable Lock-Up Period (as defined below), as well as the other applicable restrictions of Rule 144. Subject to certain limited exceptions as will be provided in the Company’s certificate of incorporation, Mr. Gilbert and the other RHI shareholders will be prohibited from transferring or otherwise disposing of (a) any shares of Class L common stock prior to the first anniversary of the closing of the Up-C Collapse and (b) 50% of the shares of Class L common stock prior to the second anniversary of the closing date (all such periods together, the “Lock-Up Periods”). Following the expiration or waiver of the applicable Lock-Up Period, each share of Class L common stock (a) may be converted at any time, at the option of the holder, into one share of Class A common stock and (b) will automatically convert into one share of Class A common stock immediately prior to any transfer of such share except for certain permitted transfers that will be described in the Company’s certificate of incorporation. In addition, the Company’s board of directors may waive the lock-up restrictions at any time during the Lock-Up Periods at the request of a holder of Class L common stock. Additional sales of our shares of Class A common stock in the public market, or the perception that sales could occur, could have a material adverse effect on the price of the Class A common stock. We have filed registration statements under the Securities Act registering 178,166,346 shares of the Class A common stock reserved for issuance under the Omnibus Incentive Plan and our Team Member Stock Purchase Plan. As of May 2, 2025, we had 116,270,178 shares of the Class A common stock reserved for issuance under our Omnibus Incentive Plan and our Team Member Stock Purchase Plan. We have entered into a Registration Rights Agreement pursuant to which we have granted demand and piggyback registration rights to RHI, Mr. Gilbert and the affiliates of Mr. Gilbert.

Current report

The board of directors may elect to consent to waivers of the lock-up with respect to proposed transfers by holders of our Class L common stock during the Lock-Up Periods, which may lead to the issuance of additional shares of the Class A common stock prior to the expiration of the applicable Lock-Up Period and could cause the price of the Class A common stock to fluctuate or decline.

Current report

Following the consummation of the Up-C Collapse and subject to certain limited exceptions, Mr. Gilbert and the other RHI shareholders will be prohibited from transferring or otherwise disposing of (a) any shares of Class L common stock prior to the first anniversary of the closing date of the Up-C Collapse and (b) 50% of the shares of Class L common stock prior to the second anniversary of the closing date of the Up-C Collapse. Following the second anniversary of the closing date of the Up-C Collapse, no shares of Class L common stock will be subject to a Lock-Up Period. The Company’s board of directors will have the ability to waive the Lock-Up Periods with respect to specific stockholders if the board of directors determines that doing so would be in the best interests of the Company’s stockholders. To the extent that the board of directors elects to waive the Lock-Up Period with respect to a holder of shares of Class L common stock, such holder would have the opportunity to convert their shares of Class L common stock into Class A common stock and sell such prior to the expiration of the applicable Lock-Up Period. Immediately prior to such transfer, such shares of Class L common stock would automatically convert into shares of Class A common Stock. If the board of directors elects to waive the applicable Lock-Up Period with respect to any shares of Class L common stock, an additional number of shares of Class A common stock could be introduced to the public market in a limited period of time, which could result in declines in the price of the Class A common stock.

Current report

Other than the Special Dividend, we may not pay dividends on our common stock in the foreseeable future.

Current report

Other than the Special Dividend, we have no current plans to pay dividends on our Class A common stock. The declaration and payment of future dividends to holders of our Class A common stock will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, earnings, legal requirements, tax obligations, restrictions in our debt instruments and other factors deemed relevant by our board of directors. As a holding company, our ability to pay dividends depends on our receipt of cash dividends from our subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their respective jurisdictions of organization, agreements of our subsidiaries or covenants under future indebtedness that we or they may incur.

Previous report

Share Repurchase Authorization

Previous report

On November 10, 2020, our board of directors approved a share repurchase program of up to $1.0 billion of our Common Stock, including both Class A and Class D, which authorized repurchases, from time to time, in privately negotiated transactions or in the open market, in accordance with applicable securities laws (the “Share Repurchase Program”). The Share Repurchase Program was renewed on November 11, 2022 and expired on November 11, 2024. During the Share Repurchase Program period, Rocket Companies repurchased 32.1 million shares at a weighted average price of $12.73. There were no share repurchases during the three and nine months ended September 30, 2024.

Previous report

We returned $409.3 million to shareholders in aggregate under the $1.0 billion Share Repurchase Program. At the time of its expiration, approximately $590.7 million remained available under the Share Repurchase Program.