As previously disclosed, on December 15, 2006, we entered into a letter agreement with Mr. Silverman regarding our respective obligations with respect to the separation benefits (including post-termination consulting obligations and payments related thereto) applicable under his existing employment agreement with us, which is described elsewhere in this Annual Report under “Item 11 — Executive Compensation — Employment Agreements and Other Arrangements.” Pursuant to this letter agreement, Realogy was relieved from a contractual obligation to deposit the lump sum amount referred to below into a rabbi trust within 15 days following the occurrence of a Potential Change in Control (e.g. the execution of the merger agreement with Apollo affiliates). Rather, this amount will be deposited into a rabbi trust no later than the consummation of a change in control (e.g., no later than the consummation of our merger with affiliates of Apollo). The letter agreement provides for a payment to Mr. Silverman in an amount representing the net value of the Separation Benefits (excluding office space and personal security benefits described under Item 11) and the consulting payments, no later than one business day following the date of the Qualifying Termination (or, if later, on the earliest day permitted under Section 409A of the Internal Revenue Code). That payment is in lieu of his receiving the Separation Benefits and consulting payments during the time periods provided for in the employment agreement.

 

On March 6, 2007, in accordance with the terms of Mr. Silverman’s employment agreement, our Compensation Committee determined the amount of this lump sum. See “Item 11 — Executive Compensation — Employment Agreements and Other Arrangements” and “—  Potential Payments Upon Termination or Change in Control.”

 

been in that position since June 2000. Mr. Edelman was a partner with Battle Fowler, which merged with Paul, Hastings, Janofsky & Walker, from 1972 through 1993 and was Of Counsel to Battle Fowler from 1994 until June 2000. Mr. Edelman also serves as a director of the following corporations, in addition to Avis Budget Group, which file reports pursuant to the Exchange Act: Capital Trust and Ashford Hospitality Trust, Inc. See “Item 13  — Certain Relationships and Related Transactions, and Director Independence.”

 

Kenneth Fisher has served as a director of Realogy since our separation from Cendant in July 2006. Mr. Fisher has been a Senior Partner in Fisher Brothers, a New York City commercial real estate firm, since April 2003, and a partner of Fisher Brothers since 1991. Mr. Fisher has been the Chairman and Chief Executive Officer of Fisher House Foundation, Inc., a not-for-profit organization that constructs homes for families of hospitalized military personnel and veterans, since May 2003, and served as Vice Chairman of Fisher House Foundation from May 2001 to May 2003. Mr. Fisher is a 26-year veteran in the real estate industry. Mr. Fisher also is a member of the Executive Committee of the City Investment Fund, LP, a real estate investment fund. Mr. Fisher is a member of the Real Estate Board of New York’s Board of Governors.

 

Cheryl D. Mills has served as a director of Realogy since our separation from Cendant in July 2006. Ms. Mills was a director of Cendant from June 2000 until the completion of Cendant’s separation plan in August 2006. Ms. Mills has been Senior Vice President, General Counsel and Secretary for New York University since February 2006. Ms. Mills was Senior Vice President and Counselor for Operations and Administration for New York University from May 2002 to February 2006. From October 1999 to November 2001, Ms. Mills was Senior Vice President for Corporate Policy and Public Programming of Oxygen Media, Inc. From 1997 to 1999, Ms. Mills was Deputy Counsel to the former President of the United States, William J. Clinton. From 1993 to 1996, Ms. Mills also served as Associate Counsel to the President.

 

Robert E. Nederlander has served as a director of Realogy since our separation from Cendant in July 2006. Mr. Nederlander was a director of Cendant from December 1997 until the completion of Cendant’s separation plan in August 2006 and Chairman of Cendant’s Corporate Governance Committee since October 2002. Mr. Nederlander was a director of HFS Incorporated from July 1995 until December 1997. Mr. Nederlander has been President and/or Director since November 1981 of the Nederlander Organization, Inc., owner and operator of legitimate theaters in the City of New York. Since December 1998, Mr. Nederlander has been a managing partner of the Nederlander Company, LLC, operator of legitimate theaters outside the City of New York. Mr. Nederlander was Chairman of the Board of Riddell Sports, Inc. (now known as Varsity Brands, Inc.) from April 1988 to September 2003. He has been a limited partner and a Director of the New York Yankees since 1973. Mr. Nederlander has been President of Nederlander Television and Film Productions, Inc. since October 1985. From January 1988 to January 2002, he was Chairman of the Board and Chief Executive Officer of Mego Financial Corp. doing business as Leisure Industries Corporation of America, which filed a voluntary petition under Chapter 11 of the U.S. federal bankruptcy code in July 2003. The voluntary petition was dismissed by the bankruptcy court in 2006. Mr. Nederlander is currently a director of Allis-Chalmers Energy Inc., which files reports pursuant to the Exchange Act.

 

Robert W. Pittman has served as a director of Realogy since our separation from Cendant in July 2006. Mr. Pittman was a director of Cendant from December 1997 until the completion of Cendant’s separation plan in August 2006 and was a director of HFS Incorporated from July 1994 until December 1997. Mr. Pittman is a member of Pilot Group Manager LLC, the manager of Pilot Group LP, a private equity fund. From May 2002 to July 2002, Mr. Pittman served as Chief Operating Officer of AOL Time Warner, Inc. Mr. Pittman also served as Co-Chief Operating Officer of AOL Time Warner prior to assuming these responsibilities. From February 1998 until January 2001, Mr. Pittman was President and Chief Operating Officer of America Online, Inc., a provider of Internet online services. During 2006 up to July 27, 2006, Mr. Pittman served as a Director of Electronic Arts, Inc., which files reports pursuant to the Exchange Act, but did not stand for reelection on that board.

 

Robert F. Smith has served as a director of Realogy since our separation from Cendant in July 2006. Mr. Smith was a director of Cendant from December 1997 until the completion of Cendant’s separation plan in August 2006 and Chairman of Cendant’s Compensation Committee since October 2004. Mr. Smith was a director of HFS Incorporated from February 1993 until December 1997. Mr. Smith currently serves as Chief

Executive Officer and part owner of Automotive Aftermarket Group, LLC, an automobile parts remanufacturer located in Bedford, New Hampshire. From March 2003 to April 2004, Mr. Smith served as the Chairman of the Board of American Remanufacturers Inc., a Chicago, Illinois automobile parts remanufacturer. From February 1999 to September 2003, Mr. Smith served as Chief Executive Officer of Car Component Technologies, Inc., an automobile parts remanufacturer located in Bedford, New Hampshire. Mr. Smith is the retired Chairman and Chief Executive Officer of American Express Bank, Ltd. (“AEBL”). Mr. Smith joined AEBL’s parent company, the American Express Company, in 1981 as Corporate Treasurer before moving to AEBL and serving as Vice Chairman and Co-Chief Operating Officer and then President prior to becoming Chief Executive Officer.

 

* * *

 

Under our Amended and Restated Certificate of Incorporation, the Board of Directors is divided into three classes of directors (Class I, II and III), each of which, as nearly as possible, shall consist of one-third of the directors constituting the entire Board of Directors. The Class I directors shall have a term expiring at the 2007 Annual Meeting of Stockholders, the Class II directors shall have a term expiring at the 2008 Annual Meeting of Directors and the Class III Directors shall have a term expiring at the 2009 Annual Meeting of Directors. At each succeeding annual meeting of stockholders, beginning in 2007, successors to the class of directors whose term is then expiring shall be elected for a three-year term.

 

Our Class I Directors are: Cheryl D. Mills and Robert W. Pittman.

 

Our Class II Directors are: Kenneth Fisher; Robert E. Nederlander; and Robert F. Smith.

 

Our Class III Directors are: Henry R. Silverman; Richard A. Smith; and Martin L. Edelman.

 

Committees

 

Our Board of Directors has the following standing committees:

 

Executive Committee

 

The Executive Committee of our Board of Directors is comprised of Messrs. Silverman (Chairman), Richard Smith and Edelman. Our Executive Committee may exercise all of the powers of our Board when the Board is not in session, including the power to authorize the issuance of stock, except that the Executive Committee has no power to (i) alter, amend or repeal the by-laws or (ii) take any other action that legally may be taken only by the full Board of Directors. The Chairman of the Board will serve as Chairman of the Executive Committee.

 

Audit Committee

 

The Audit Committee of our Board of Directors is comprised of Ms. Mills and Messrs. Fisher and Robert Smith (Chairman). All members of our Audit Committee are independent directors as required by the listing standards of the NYSE. Our Board has determined that Mr. Robert Smith meets the requirements for being an “audit committee financial expert” as defined by regulations of the Securities and Exchange Commission.

 

Our Audit Committee assists our Board in its oversight of our financial reporting process. Our management has primary responsibility for the financial statements and the reporting process, including systems of internal controls. Our independent auditors are responsible for auditing our financial statements and expressing an opinion as to their conformity to accounting principles generally accepted in the United States.

 

In the performance of its oversight function, our Audit Committee reviews and discusses with management and the independent auditors our audited financial statements. Our Audit Committee also discusses with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 and Auditing Standard No. 2 relating to communication with audit committees. In addition, our Audit Committee receives from the independent auditors the written disclosures and letter required by Independence Standards Board Standard No. 1 relating to independence discussions with audit committees. Our Audit Committee also discusses with the independent auditors their independence from our Company and our management, and

considers whether the independent auditor’s provision of non-audit services to our Company is compatible with maintaining the auditor’s independence.

 

Our Audit Committee discusses with our internal and independent auditors the overall scope and plans for their respective audits. Our Audit Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of our internal controls and the overall quality of our financial reporting. In addition, our Audit Committee meets with our Chief Executive Officer and Chief Financial Officer to discuss the processes that they have undertaken to evaluate the accuracy and fair presentation of our financial statements and the effectiveness of our system of disclosure controls and procedures.

 

Compensation Committee

 

The Compensation Committee of our Board of Directors (the “Compensation Committee”) is comprised of Messrs. Fisher, Robert Smith (Chairman) and Nederlander. Our Compensation Committee has oversight responsibility for the compensation programs for our executive officers and other employees. All members of our Compensation Committee are independent directors as required by (i) the listing standards of the New York Stock Exchange, (ii) relevant federal securities laws and regulations, including Section 16 of the Exchange Act, (iii) Section 162(m) of the Code and (iv) our Corporate Governance Principles.

 

Corporate Governance Committee

 

The Corporate Governance Committee of our Board of Directors is comprised of Messrs. Nederlander (Chairman) and Pittman and Ms. Mills. Our Corporate Governance Committee considers and recommends candidates for election to our Board, advise our Board on director compensation, oversees the annual performance evaluations of our Board and Board committees and advises our Board on corporate governance matters. All members of our Corporate Governance Committee are independent directors as required by the listing standards of the New York Stock Exchange and our Corporate Governance Principles.

 

In November 2006, the Company also formed a Special Committee of the Board of Directors, comprised of Robert F. Smith (Chair) and Messrs. Fisher and Nederlander to consider a proposal received from Apollo to acquire all of the outstanding shares of the Company, which resulted in the execution and delivery of the Merger Agreement, and to oversee the solicitation of other bidders during the “go shop” period provided under the Merger Agreement.

 

 

Henry R. Silverman has served as our Chairman of the Board, Chief Executive Officer and a director since our separation from Cendant in July 2006. It is expected that Mr. Silverman will step down as our Chief Executive Officer effective January 1, 2008, and, subject to Board approval, our Vice Chairman and President, Richard A. Smith, will assume the position of Chief Executive Officer. Mr. Silverman was Chief Executive Officer and a director of Cendant from December 1997 until the completion of Cendant’s separation plan in August 2006, as well as Chairman of the Board of Directors and the Executive Committee from July 1998 until August 2006. Mr. Silverman was President of Cendant from December 1997 until October 2004. Mr. Silverman was Chairman of the Board, Chairman of the Executive Committee and Chief Executive Officer of HFS Incorporated from May 1990 until December 1997.

 

Richard A. Smith has served as our Vice Chairman of the Board, President and a director since our separation from Cendant in July 2006. Mr. Smith was Senior Executive Vice President of Cendant from September 1998 until our separation from Cendant in July 2006 and Chairman and Chief Executive Officer of Cendant’s Real Estate Services Division from December 1997 until our separation from Cendant in July 2006. Mr. Smith was President of the Real Estate Division of HFS from October 1996 to December 1997 and Executive Vice President of Operations for HFS from February 1992 to October 1996.

 

Anthony E. Hull has served as our Executive Vice President, Chief Financial Officer and Treasurer since our separation from Cendant in July 2006. Mr. Hull was Executive Vice President, Finance of Cendant from October 2003 until our separation from Cendant in July 2006. From January 1996 to September 2003, Mr. Hull served as Chief Financial Officer for DreamWorks, a diversified entertainment company. From 1990 to 1994, Mr. Hull worked in various capacities for Paramount Communications, a diversified entertainment and publishing company. From 1984 to 1990 Mr. Hull worked in investment banking at Morgan Stanley.

 

C. Patteson Cardwell, IV has served as our Executive Vice President and General Counsel since our separation from Cendant in July 2006. Mr. Cardwell was Senior Vice President, Legal responsible for all Cendant Real Estate Services Division legal matters from March 2000 until our separation from Cendant in July 2006. From November 1996 to March 2000, Mr. Cardwell served as Vice President and Legal Counsel for our Coldwell Banker ^® and Coldwell Banker Commercial ^® brands. From May 1994 to November 1996, Mr. Cardwell was an associate and later a partner in the Law Offices of Cohen & Mohr, in Washington, D.C.

 

David J. Weaving has served as our Executive Vice President and Chief Administrative Officer since our separation from Cendant in July 2006. Mr. Weaving was Senior Vice President and Chief Financial Officer

of Cendant’s Real Estate Division from September 2001 until our separation from Cendant in July 2006. From May 2001 through September 2001 he served as Vice President and Divisional Controller for Cendant’s Real Estate Division. Mr. Weaving joined Cendant in 1999 as a Vice President of Finance. From 1995 to 1999, Mr. Weaving worked in increasing roles of responsibility for Cambrex Corporation, a diversified chemical manufacturer. From 1988 to 1995 Mr. Weaving worked as an auditor for Coopers & Lybrand LLP.

 

Alexander E. Perriello, III has served as our President and Chief Executive Officer, Realogy Franchise Group, since our separation from Cendant in July 2006. Mr. Perriello was President and Chief Executive Officer of the Cendant Real Estate Franchise Group from April 2004 until our separation from Cendant in July 2006. From 1997 through 2004 he served as President and Chief Executive Officer of Coldwell Banker Real Estate Corporation.

 

Kevin J. Kelleher has served as our President and Chief Executive Officer, Cartus Corporation. Mr. Kelleher was President and Chief Executive Officer of Cendant Mobility Services Corporation from 1997 until our separation from Cendant in July 2006. From 1993 to 1997 he served as Senior Vice President and General Manager of Cendant Mobility’s destination services unit. Mr. Kelleher has also held senior leadership positions in sales, client relations, network management and strategic planning.

 

Bruce Zipf has served as President and Chief Executive Officer of NRT Incorporated since March 2005 and as President and Chief Operating Officer from February 2004 to March 2005. From January 2003 to February 2004, Mr. Zipf served as Executive Vice President and Chief Administrative Officer for NRT responsible for the financial and administrative sectors that included acquisitions and mergers, financial planning, human resources and facilities, and from 1998 through December 2002, he served as NRT’s Senior Vice President for most of NRT’s Eastern Operations. From 1996 to 1998, Mr. Zipf served as President and Chief Operating Officer for Coldwell Banker Residential Brokerage - New York. Prior to entering the real estate industry, Mr. Zipf was a senior audit manager for Ernst and Young.

 

Donald J. Casey has served as our President and Chief Executive Officer, Title Resource Group, since our separation from Cendant in July 2006. Mr. Casey was President and Chief Executive Officer, Cendant Settlement Services Group from April 2002 until our separation from Cendant in July 2006. From 1995 until April 2002, he served as Senior Vice President, Brands of PHH Mortgage. From 1993 to 1995, Mr. Casey served as Vice President, Government Operations of Cendant Mortgage. From 1989 to 1993, Mr. Casey served as a secondary marketing analyst for PHH Mortgage Services (prior to its acquisition by Cendant).

 

Christopher R. Cade has served as our Senior Vice President, Chief Accounting Officer and Controller since our separation from Cendant in July 2006. Mr. Cade was Vice President, Corporate Finance of Cendant from 2004 until our separation from Cendant in July 2006. From 2002 to 2004, he served as Director, Corporate Accounting and Reporting for Public Service Enterprise Group. From 1996 to 2002, Mr. Cade served in multiple financial and accounting capacities with increasing responsibilities for Pharmacia Corporation (now owned by Pfizer Inc.) and Intermetro Industries Corporation, a subsidiary of Emerson Electric Company.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Exchange Act requires the Company’s officers and Directors, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC and the NYSE. Officers, Directors and greater than ten percent beneficial owners are required to furnish the Company with copies of all Forms 3, 4 and 5 they file.

 

Based solely on the Company’s review of the copies of such forms it has received, the Company believes that all its officers, Directors and greater than ten percent beneficial owners complied with all filing requirements applicable to them with respect to transactions during 2005.

 

Communicating with the Board of Directors

 

Stockholders interested in communicating with directors, non- management directors of the board or the entire board may send communications to the Company’s Board of Directors by writing to the Board at Realogy Corporation, One Campus Drive, Parsippany, New Jersey 07054, Attention: Corporate Secretary. The Corporate Secretary will review and distribute all stockholder communications received to the intended recipients and/or distribute to the full Board, as appropriate.

 

Code of Ethics, Corporate Governance Guidelines and Committee Charters

 

Codes of Conduct.  The Board has adopted a code of ethics that applies to all officers and employees, including the Company’s principal executive officer, principal financial officer and principal accounting officer. The Board has also adopted a code of business conduct and ethics for Directors. Both codes of conduct are available in the “Corporate Governance — Compliance & Ethics” section of the Company’s website at www.realogy.com , The purpose of these codes of conduct is to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; to promote full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by the Company; and to promote compliance with all applicable rules and regulations that apply to the Company and its officers and Directors.

 

Committee Charters and Corporate Governance Guidelines. Copies of our Corporate Governance Guidelines, Corporate Governance Committee Charter, Compensation Committee Charter, and Audit Committee Charter, also are posted on our website, www.realogy.com. In order to access this portion of our website, click on the “Investors” tab, then on the “Corporate Governance” caption.

 

A copy of the Code of Ethics for all officers and employees, the Code of Business Conduct and Ethics for Directors, our Corporate Governance Guidelines and the Charters of the standing Committees may be obtained upon request, without charge, by contacting our Investor Relations Department at 973-407-7210 or by writing to us at Realogy Corporation, One Campus Drive, Parsippany, New Jersey 07054, Attn: Investor Relations.