##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K/A
 Amendment No.1
to
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2005
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from     to
 Commission file number: 000-26659
 Homestore, Inc.
 (Exact Name of Registrant as Specified in its Charter)
 Delaware
    
    95-4438337(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)30700 Russell Ranch RoadWestlake Village, California
    
    91362(Address of Principal Executive Offices)
    
    (Zip Code)
 Registrants telephone number, including area code:
(805) 557-2300
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, par value $.001 per share
 Warrants to purchase Common Stock, par value $.001 per share
 
 þ o
 o þ
 þ o
 þ
  o þ o
 o þ
 Aggregate market value of voting common stock held by
non-affiliates of the registrant as of June 30, 2005*
    
    $
    252,750,921Number of shares of common stock outstanding as of April 1, 2006
    
    
    150,132,122




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##### 



TABLE OF CONTENTS
 PART IIIItem 10. Directors and Executive Officers of the RegistrantItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related TransactionsItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits, Financial Statement SchedulesSIGNATURESINDEXEXHIBIT 31.01EXHIBIT 31.02Exhibit 31.01Exhibit 31.02




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PART III
 
 Item 10. Directors and Executive Officers of the Registrant
 Directors and Executive Officers
  Name
    
    Age
    
    PositionJoe F. Hanauer
    
    
    68
    
    
    Chairman of the Board and DirectorFred D. Anderson
    
    
    61
    
    
    DirectorL. John Doerr
    
    
    54
    
    
    DirectorWilliam E. Kelvie
    
    
    58
    
    
    DirectorKenneth K. Klein(1)
    
    
    62
    
    
    DirectorW. Michael Long
    
    
    53
    
    
    Chief Executive Officer and DirectorRoger B. McNamee
    
    
    49
    
    
    DirectorV. Paul Unruh(1)(2)
    
    
    57
    
    
    DirectorBruce G. Willison(1)
    
    
    57
    
    
    DirectorAlan Yassky
    
    
    70
    
    
    DirectorJack D. Dennison
    
    
    49
    
    
    Chief Operating OfficerLewis R. Belote, III
    
    
    50
    
    
    Chief Financial OfficerAllan P. Merrill
    
    
    39
    
    
    Executive Vice President, Strategy and Corporate DevelopmentMichael R. Douglas
    
    
    52
    
    
    Executive Vice President, General Counsel and SecretaryAllan D. Dalton
    
    
    57
    
    
    President and Chief Executive Officer, REALTOR.com®Stephen T. Feltner
    
    
    35
    
    
    President, Homebuilder.comMaria L. Pietroforte
    
    
    48
    
    
    President, RentNet
 
 (1)
    
    Member of audit committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended.(2)
    
    The board of directors has determined that Mr. Unruh meets the requirements of an audit
committee financial expert as defined in Securities and Exchange Commission (SEC) rules
and regulations. Mr. Unruh meets the requirements for being independent as defined by SEC
rules and regulations.  ® ®
 2




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Joe F. Hanauer ® ®
 Fred D. Anderson
 L. John Doerr
 William E. Kelvie
 3




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Kenneth K. Klein
 W. Michael Long
 Roger B. McNamee
 V. Paul Unruh
 Bruce G. Willison
 Alan Yassky ® ® ® ®
 Jack D. Dennison
 4




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##### Table of Contents



Lewis R. Belote, III
 Allan P. Merrill
 Michael R. Douglas
 Allan D. Dalton ® ®
 Stephen T. Feltner
 Maria L. Pietroforte
 Section 16(a) Beneficial Ownership Reporting Compliance
  5




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Code of Conduct and Business Ethics
 http://media.corporate-ir.net/media_files/IROL/11/111114/gov/HOMS_COC.pdf
 http://ir.homestore.com
 6




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Item 11. Executive Compensation
 Summary Compensation Table
  Summary Compensation Table
 Long TermCompensationAnnual Compensation
    
    SecuritiesOther Annual
    
    Underlying
    
    Restricted
    
    All OtherName and Principal
    
    Year
    
    Salary($)
    
    Bonus($)
    
    Compensation($)
    
    Options(#)
    
    Shares($)
    
    Compensation($)PositionW. Michael Long
    
    2005
    
    500,000
    
    775,000
    
    
    
    
    
    
    2,300,000
    
    
    
    
    
    
    
    Chief Executive
    
    2004
    
    500,000
    
    500,000
    
    
    
    
    
    
    1,000,000
    
    
    
    250,000
    (1)
    
    
    Officer
    
    2003
    
    500,000
    
    500,000
    
    
    
    
    
    
    
    
    
    
    300,000
    (2)
    
    
    Jack D. Dennison
    
    2005
    
    400,000
    
    620,000
    
    
    
    
    
    
    500,000
    
    
    
    
    
    
    
    6,300
    (3)Chief Operating
    
    2004
    
    400,000
    
    400,000
    
    
    
    
    
    
    500,000
    
    
    
    
    
    
    
    Officer
    
    2003
    
    400,000
    
    425,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,775
    (4)Allan D. Dalton
    
    2005
    
    325,000
    
    630,000
    
    
    
    
    
    
    350,000
    
    
    
    
    
    
    
    2,311
    (3)President and CEO,
    
    2004
    
    325,000
    
    406,250
    
    
    
    
    
    
    350,000
    
    
    
    
    
    
    
    REALTOR.com®
    
    2003
    
    325,000
    
    425,000
    
    
    17,526
    (5)
    
    
    
    
    
    
    
    
    
    
    90,933
    (6)Lewis R. Belote, III
    
    2005
    
    350,000
    
    540,000
    
    
    
    
    
    
    350,000
    
    
    
    
    
    
    
    6,300
    (3)Chief Financial
    
    2004
    
    350,000
    
    350,000
    
    
    
    
    
    
    350,000
    
    
    
    
    
    
    
    Officer
    
    2003
    
    350,000
    
    350,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Allan P. Merrill
    
    2005
    
    325,000
    
    550,000
    
    
    
    
    
    
    350,000
    
    
    
    
    
    
    
    6,300
    (3)Executive Vice
    
    2004
    
    325,000
    
    325,000
    
    
    
    
    
    
    350,000
    
    
    
    
    
    
    
    President, Strategy
    
    2003
    
    325,000
    
    350,000
    
    
    
    
    
    
    550,001
    (7)
    
    
    
    
    
    
    and Corporate
Development
 
 (1)
    
    Represents 115,740 shares of restricted stock granted to Mr. Long on March 17, 2005 in
consideration for his services to us during 2004. These shares will vest in full on March 17,
2008. The aggregate number of shares of restricted stock held by Mr. Long as of December 31,
2005 was 186,662. The aggregate value of restricted stock held by Mr. Long as of December 31,
2005 was $951,977.(2)
    
    Represents 70,922 shares of restricted stock granted to Mr. Long on March 31, 2004 in
consideration for his services to us during 2003. These shares will vest in full on March 31,
2007.(3)
    
    Represents amounts contributed by us as a match of participants 401(k) contributions.(4)
    
    Represents relocation expenses paid by us.(5)
    
    Represents amounts reimbursed for the payment of taxes and tax gross-up amounts associated
with relocation expenses.(6)
    
    Represents $13,357 of expense paid by us for travel on an airplane indirectly owned by Mr.
Long, and $77,576 of relocation expenses paid by us.(7)
    
    50,001 of which were granted in connection with an option exchange offer in which we
offered our employees the opportunity to exchange all outstanding options granted to them (or
assumed by us) between August 5, 1999 (the date of our initial public offering) and December
31, 2001 for new options. 7




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Stock Option Grants in 2005
    Number of
    
    Percent of
    
    
    
    
    
    
    
    
    
    Potential Realizable Value ofSecurities
    
    Total Options
    
    
    
    
    
    
    
    
    
    Assumed Annual Rates of StockUnderlying
    
    Granted to
    
    Exercise
    
    
    
    
    
    Price Appreciation forOptions
    
    Employees in
    
    Price
    
    Expiration
    
    Option Term ($)Name
    
    Granted (#)
    
    2005
    
    ($/Sh)
    
    Date
    
    5%
    
    10%W. Michael Long
    
    
    2,300,000
    (1)
    
    
    32.71
    %
    
    
    2.16
    
    
    
    3/17/2015
    
    
    
    3,124,349
    
    
    
    7,917,713Jack D. Dennison
    
    
    500,000
    (1)
    
    
    7.11
    %
    
    
    2.16
    
    
    
    3/17/2015
    
    
    
    679,206
    
    
    
    1,721,242Allan D. Dalton
    
    
    350,000
    (1)
    
    
    4.98
    %
    
    
    2.16
    
    
    
    3/17/2015
    
    
    
    475,444
    
    
    
    1,204,869Lewis R. Belote, III
    
    
    350,000
    (1)
    
    
    4.98
    %
    
    
    2.16
    
    
    
    3/17/2015
    
    
    
    475,444
    
    
    
    1,204,869Allan P. Merrill
    
    
    350,000
    (1)
    
    
    4.98
    %
    
    
    2.16
    
    
    
    3/17/2015
    
    
    
    475,444
    
    
    
    1,204,869
 
 (1)
    
    Option vests ratably on a quarterly basis over four years beginning on March 17, 2005.  Aggregated Option Exercises in 2005 and Option Values at December 31, 2005
  Number ofSecurities Underlying
    
    Value of UnexercisedNumber of
    
    
    
    
    
    Unexercised Options at
    
    In-the-Money Options atShares
    
    
    
    
    
    12/31/05
    
    12/31/05($)Acquired on
    
    ValueName
    
    Exercise
    
    Realized
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableW. Michael Long
    
    
    
    
    
    
    
    
    
    
    5,831,250
    
    
    
    2,668,750
    
    
    
    18,648,563
    
    
    
    6,491,438Jack D. Dennison
    
    
    
    
    
    
    
    
    
    
    2,793,750
    
    
    
    806,250
    
    
    
    8,965,969
    
    
    
    1,693,031Allan D. Dalton
    
    
    
    
    
    
    
    
    
    
    916,144
    
    
    
    733,856
    
    
    
    3,834,665
    
    
    
    2,022,335Lewis R. Belote, III
    
    
    
    
    
    
    
    
    
    
    1,867,030
    
    
    
    562,970
    
    
    
    5,980,272
    
    
    
    1,180,428Allan P. Merrill
    
    
    
    
    
    
    
    
    
    
    1,596,352
    
    
    
    803,649
    
    
    
    4,529,885
    
    
    
    1,630,119
 8




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Employment-Related Agreements
 Mr. Long
          9




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Mr. Dennison
          Mr. Dalton
 ®
 10




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Mr. Belote
    11




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Mr. Merrill
   12




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Director Compensation
   13




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Compensation Committee Interlocks and Insider Participation
  14




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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
 Security Ownership of Certain Beneficial Owners and Management
  
    
    each stockholder known by us to be the beneficial owner of 5% or more of any
class of our voting securities,
    
    each of our directors,
    
    each of the executive officers listed in the summary compensation table, and
    
    all of our directors and executive officers as a group.
  Shares of Series A
    
    Shares of Series BShares of Common Stock
    
    Preferred Stock (1)
    
    Preferred Stock (2)Beneficially Owned
    
    Beneficially Owned
    
    Beneficially OwnedName of Beneficial Owner
    
    Number
    
    Percent
    
    Number
    
    Percent
    
    Number
    
    PercentFMR Corp.
    
    
    22,154,101
    (3)
    
    
    14.8
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82 Devonshire Street
   Boston, MA 02109Roger B. McNamee
    
    
    24,459,493
    (4)(5)
    
    
    14.0
    %
    
    
    
    
    
    
    
    
    
    
    101,189
    (6)
    
    
    100
    %Elevation Partners, L.P.
    
    
    24,092,579
    (5)
    
    
    13.8
    %
    
    
    
    
    
    
    
    
    
    
    101,189
    (6)
    
    
    100
    %2800 Sand Hill Road
   Suite 160
   Menlo Park, CA 94025Fred D. Anderson
    
    
    24,092,579
    (5)
    
    
    13.8
    %
    
    
    
    
    
    
    
    
    
    
    101,189
    (6)
    
    
    100
    %TCS Capital GP, LLC
    
    
    9,225,213
    (7)
    
    
    6.1
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    888 Seventh Avenue
   Suite 1504
   New York, NY 10019AXA Financial, Inc.
    
    
    7,551,044
    (8)
    
    
    5.0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1290 Ave. of the Americas
   New York, NY 10104W. Michael Long
    
    
    6,340,808
    (9)
    
    
    4.1
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    L. John Doerr
    
    
    4,307,916
    (10)
    
    
    2.9
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    National Association of
REALTORS®
    
    
    3,975,329
    
    
    
    2.6
    %
    
    
    1
    
    
    
    100
    %
    
    
    
    
    
    
    430 North Michigan Ave.
Chicago, IL 60611Alan Yassky
    
    
    3,975,329
    (11)
    
    
    2.6
    %
    
    
    1
    (12)
    
    
    100
    %
    
    
    
    
    
    
    Jack D. Dennison
    
    
    2,943,272
    (13)
    
    
    1.9
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Lewis R. Belote, III
    
    
    1,979,101
    (14)
    
    
    1.3
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Allan P. Merrill
    
    
    1,760,974
    (15)
    
    
    1.2
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Allan D. Dalton
    
    
    1,081,114
    (16)
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Joe F. Hanauer
    
    
    889,604
    (17)
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Kenneth K. Klein
    
    
    153,287
    (18)
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Bruce G. Willison
    
    
    118,841
    (19)
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    V. Paul Unruh
    
    
    115,300
    (20)
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    William E. Kelvie
    
    
    114,487
    (21)
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    All 17 directors and
executive officers as a
group
    
    
    49,885,454
    
    
    
    26.2
    %
    
    
    1
    
    
    
    100
    %
    
    
    101,189
    
    
    
    100
    %
 
 *
    
    Represents beneficial ownership of less than 1%. 15




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(1)
    
    We have authorized the issuance of one share of Series A preferred stock, which is held by
the National Association of REALTORS®. Although the Series A preferred stockholder is
generally not entitled to notice of any stockholders meetings or to vote on any matters with
respect to any question upon which holders of our common stock or of any other series of our
preferred stock have the right to vote, except as may be required by law (in which case, the
Series A preferred stock would have one vote per share and would vote together with the common
stock as a single class), the holder of Series A preferred stock is entitled to elect one
member of our board of directors.(2)
    
    By virtue of their ownership of all of the outstanding shares of our Series B Preferred
Stock, Elevation currently has the right to elect two of our directors. In addition, the
Series B Preferred Stock votes as a single class with the common stock on any matter to come
before the stockholders of the Company, with each share of Series B Preferred Stock being
entitled to cast a number of votes equal to the number of shares of Common Stock into which it
is then convertible. Pursuant to the Elevation Stockholders Agreement, Elevation is required
to vote their shares in the manner recommended by the board of directors with respect to the
election or removal of directors, other than any directors designated by them.(3)
    
    The information shown is as of December 31, 2005 and is based upon information disclosed by
FMR Corp., Edward C. Johnson 3d, Fidelity Management & Research Company, and Fidelity Mid Cap
Stock Fund in an amendment to a Schedule 13G filed with the SEC on February 14, 2006. Such
persons reported that Edward C. Johnson 3d and FMR Corp., through its control of Fidelity
Management & Research Company, and other members of the filing group, have sole power to
dispose or to direct the disposition of 22,140,398 shares of our common stock. Sole power to
vote these shares resides in the respective boards of trustees of the funds that have invested
in the shares. Such persons also reported that Edward C. Johnson 3d and FMR Corp., through its
control of Fidelity Management Trust Company, have sole power to dispose or to direct the
disposition of and sole power to vote or direct the voting of 11,029 shares of our common
stock. Fidelity International Limited, Pembroke Hall, 42 Crow Lane, Hamilton, Bermuda, is the
beneficial owner of 2,674 shares of our common stock.(4)
    
    Includes 15,650 shares of common stock owned by the Roger and Ann McNamee Trust UTAD 3/27/96.
Mr. McNamee and his wife are trustees of this trust. Also includes 351,264 shares of common
stock held by two Integral Capital Partners investment funds of which Mr. McNamee is a manager
of the general partner. Mr. McNamee disclaims beneficial ownership of such shares except to
the extent of his pecuniary interest in his distributive share therein.(5)
    
    Pursuant to Rule 13d-3 under the Exchange Act, Elevation Partners, L.P. (Elevation
Partners) may be deemed to beneficially own 24,087,279 shares of our common stock, which is
issuable upon conversion of the Series B Preferred Stock held by Elevation Partners. Pursuant
to Rule 13d-3 under the Exchange Act, Elevation Employee Side Fund, LLC (Side Fund) may be
deemed to beneficially own 5,300 shares of our common stock, which is issuable upon conversion
of the Series B Preferred Stock held by Side Fund.Each of Mr. Anderson and Mr. McNamee, our two Series B Directors, as well as each of Marc
Bodnick, Paul Hewson, Bret Pearlman and John Riccitiello (collectively, the Managers) is a
manager of Elevation Associates, LLC (Elevation LLC), which is the sole general partner of
Elevation Associates, L.P. (Elevation GP). Elevation GP is the sole general partner of
Elevation Partners. Each of the Managers, including Messrs. Anderson and McNamee, is a manager
of Elevation Management, LLC (Elevation Management), which is the sole managing member of
Side Fund. As managers of each of Elevation LLC and Elevation Management, the Managers,
including Messrs. Anderson and McNamee, may be deemed to beneficially own any shares of our
common stock deemed to be beneficially owned by Elevation LLC or Elevation Management.
Elevation LLC may be deemed to beneficially own any shares of our common stock deemed to be
beneficially owned by Elevation GP, which may be deemed to beneficially own any shares of our
common stock deemed to be beneficially owned by Elevation Partners. Elevation Management may be
deemed to beneficially own any shares of our common stock deemed to be beneficially owned by
Side Fund. Each of Messrs. Anderson and McNamee disclaims beneficial ownership of such shares
except to the extent of his pecuniary interest in his distributive share therein. 16




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Elevation Partners, Elevation GP and Elevation LLC have sole power to dispose and to direct the
disposition of and sole power to vote and direct the voting of 24,087,279 shares of our common
stock. Side Fund and Elevation Management have sole power to dispose and to direct the
disposition of and sole power to vote and direct the voting of 5,300 shares of our common
stock. Each of the Managers has shared power to dispose and to direct the disposition of and
shared power to vote and direct the voting of the 24,092,579 shares of our common stock held by
Elevation Partners and Side Fund.(6)
    
    Includes approximately 101,167 shares of Series B Preferred Stock held by Elevation Partners
and approximately 22 shares of Series B Preferred Stock held by Side Fund. As managers of each
of Elevation LLC and Elevation Management, the Managers, including Messrs. Anderson and
McNamee, may be deemed to beneficially own any shares of our Series B Preferred Stock deemed
to be beneficially owned by Elevation LLC or Elevation Management. Elevation LLC may be
deemed to beneficially own any shares of our Series B Preferred Stock deemed to be
beneficially owned by Elevation GP, which may be deemed to beneficially own any shares of our
Series B Preferred Stock deemed to be beneficially owned by Elevation Partners. Elevation
Management may be deemed to beneficially own any shares of our common stock deemed to be
beneficially owned by Side Fund. Each of Messrs. Anderson and McNamee disclaims beneficial
ownership of such shares except to the extent of his pecuniary interest in his distributive
share therein.(7)
    
    The information shown is as of January 6, 2006 and is based upon information disclosed by TCS
Capital GP, LLC and Eric Semler in an amendment to a Schedule 13G filed with the SEC on
January 18, 2006. Such persons reported that Eric Semler has sole power to dispose or to
direct the disposition of and sole power to vote or direct the voting of 9,225,213 shares of
our common stock and that TCS Capital GP, LLC has sole power to dispose or to direct the
disposition of and sole power to vote or direct the voting of 9,185,213 of these shares.(8)
    
    The information shown is as of December 31, 2005 and is based upon information disclosed
by AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, AXA Courtage Assurance
Mutuelle, (collectively, the Mutuelles AXA), AXA and AXA Financial, Inc. in a Schedule 13G
filed with the SEC on February 14, 2006. Such persons reported that AXA Financial, Inc. and
other members of the filing group have sole power to dispose or to direct the disposition of
7,551,044 shares of our common stock and sole power to vote or direct the voting of 4,924,765
shares of our common stock. The address of the Mutuelles AXA is 26, rue Drougot, 75009 Paris,
France and the address of AXA is 25, avenue Matignon, 75008 Paris, France.(9)
    
    Includes 186,662 shares of restricted stock, none of which will be vested or transferable
as of May 31, 2006. Also includes 6,150,000 shares issuable upon the exercise of options that
are vested and exercisable as of May 31, 2006.(10)
    
    Includes 60,300 shares of restricted stock, of which 25,300 shares will not be vested or
transferable as of May 31, 2006. Also includes 64,687 shares issuable upon the exercise of
options that are held by Mr. Doerr, which are vested and exercisable as of May 31, 2006. Also
includes 3,657,895 shares held by Kleiner Perkins Caufield & Byers VIII, 210,967 shares held
by KPCB VIII Founders Fund, and 1,615 shares held by KPCB Information Sciences Zaibatsu Fund
II. Mr. Doerr is a general partner of KPCB Associates VIII, which is the general partner of
each of Kleiner Perkins Caufield & Byers VIII and KPCB VIII Founders Fund, and a general
partner of KPCB Associates VII, which is the general partner of KPCB Information Sciences
Zaibatsu Fund II. Mr. Doerr disclaims beneficial ownership of these shares except to the
extent of his pecuniary interest in these entities. Also includes 2,602 shares in the Brook H.
Byers Trust dated 1986 of which Mr. Doerr is trustee, with respect to which Mr. Doerr
disclaims beneficial ownership. The address of the Kleiner Perkins Caufield & Byers entities
is 2750 Sand Hill Road, Menlo Park, California 94025.(11)
    
    Includes 3,975,329 shares of common stock held by the National Association of REALTORS®, of
which Mr. Yassky currently serves as a director. Mr. Yassky disclaims beneficial ownership of
all of these shares.(12)
    
    Includes one share of Series A Preferred Stock held by the National Association of REALTORS®,
of which Mr. Yassky currently serves as a director. Mr. Yassky disclaims beneficial ownership
of all of these shares. 17




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##### Table of Contents



(13)
    
    Includes 2,912,500 shares issuable upon the exercise of options that are vested and
exercisable as of May 31, 2006.(14)
    
    Includes 1,948,750 shares issuable upon the exercise of options that are vested and
exercisable as of May 31, 2006.(15)
    
    Includes 1,731,248 shares issuable upon the exercise of options that are vested and
exercisable as of May 31, 2006.(16)
    
    Includes 1,069,790 shares issuable upon the exercise of options that are vested and
exercisable as of May 31, 2006.(17)
    
    Includes 267,788 shares of restricted stock, of which 56,200 shares will not be vested or
transferable as of May 31, 2006. Also includes 215,468 shares issuable upon the exercise of
options that are held by Mr. Hanauer that are vested and exercisable as of May 31, 2006. Also
includes 406,348 shares held by Ingleside Interests, L.P. Mr. Hanauer is a general partner of
this entity. Mr. Hanauer disclaims beneficial ownership of these shares except to the extent
of his pecuniary interest in this entity.(18)
    
    Includes 72,300 shares of restricted stock, of which 25,300 shares will not be vested or
transferable as of May 31, 2006. Also includes 73,187 shares issuable upon the exercise of
options that are vested and exercisable as of May 31, 2006.(19)
    
    Includes 85,300 shares of restricted stock, of which 25,300 shares will not be vested or
transferable as of May 31, 2006. Also includes 33,541 shares issuable upon the exercise of
options that are vested and exercisable as of May 31, 2006.(20)
    
    Includes 85,300 shares of restricted stock, of which 25,300 shares will not be vested or
transferable as of May 31, 2006. Also includes 30,000 shares issuable upon the exercise of
options that are vested and exercisable as of May 31, 2006.(21)
    
    Includes 72,300 shares of restricted stock, of which 25,300 shares will not be vested or
transferable as of May 31, 2006. Also includes 42,187 shares issuable upon the exercise of
options that are vested and exercisable as of May 31, 2006. Securities Authorized for Issuance Under Equity Compensation Plans
  Equity Compensation Plan Information
 Number of SecuritiesNumber of Securities
    
    
    
    
    
    
    Remaining Available forto be
    
    
    Weighted-Average
    
    
    Future Issuance UnderIssued Upon Exercise of
    
    
    Exercise Price of
    
    
    Equity CompensationOutstanding Options,
    
    
    Outstanding Options,
    
    
    Plans (excluding securitiesPlan Category
    
    Warrants and Rights
    
    
    Warrants and Rights
    
    
    reflected in column (a))(a)
    
    
    (b)
    
    
    (c)(In thousands)
    
    
    
    
    
    
    (In thousands)Equity
compensation plans
approved by
security holders
    
    
    25,091
    
    
    $
    3.00
    
    
    
    3,434Equity
compensation plans
not approved by
security holders
    
    
    7,123
    
    
    $
    2.26
    
    
    
    10,531Total
    
    
    32,214
    
    
    $
    2.84
    
    
    
    13,964
  18




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Non-Shareholder Approved Plans
    19




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Item 13. Certain Relationships and Related Transactions
 Operating Agreement with the National Association of REALTORS®
 ® ®
   
    
    For 2006, we must pay $1,500,000 plus or minus, as the case may be, the
percentage change in the Consumer Price Index for 2005, in four equal installments due
on the last day of each calendar quarter of 2006.
    
    For 2007 and beyond, we must pay the amount due during the prior calendar year
plus or minus, as the case may be, the percentage change in the Consumer Price Index for
the prior calendar year, in four equal installments due on the last day of each calendar
quarter for that calendar year.
 Transactions with Elevation Partners
    (i)
    
    a $1,000,000 million transaction fee to Elevation Management;(ii)
    
    a $163,765 payment to Elevation Management to reimburse it for professional
fees it paid to consultants and travel expenses associated with the due diligence
investigation of us conducted on behalf of Elevation in connection with the purchase of
our Series B Preferred Stock; and(iii)
    
    direct payments in an aggregate amount of $1,157,812 to a law firm and an
accounting firm for legal and accounting fees and expenses incurred in connection with
services rendered by each of them to Elevation in connection with the purchase of our
Series B Preferred Stock.
 20




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Loans to and Transactions with Executive Officers
  
 Item 14. Principal Accountant Fees and Services
  Year ended
    
    
    Year endedDecember 31, 2004
    
    
    December 31, 2005Audit Fees (1)
    
    $
    2,892,000
    
    
    $
    1,956,000Audit-Related Fees (2)
    
    
    
    
    
    
    Tax Fees (3)
    
    
    94,000
    
    
    
    253,000All Other Fees (4)
    
    
    
    
    
    
    Total Fees
    
    $
    2,986,000
    
    
    $
    2,209,000
 
 (1)
    
    Audit fees are fees billed by the independent auditors for professional services for the
audit of the consolidated financial statements included in our Form 10-K and review of
financial statements included in our Form 10-Qs, or for services that are normally provided by
the auditors in connection with statutory and regulatory filings or engagements.(2)
    
    Audit-related fees are fees billed by the independent auditors for assurance and related
services that are reasonably related to the performance of the audit or review of the
financial statements, and are not reported under audit fees.(3)
    
    Tax fees are fees billed by the independent auditors for professional services for tax
compliance, tax advice, and tax planning.(4)
    
    All other fees are fees billed by the independent auditors to the Company for any services
not included in the first three categories, and include fees for accounting services provided
to us and in connection with our response to inquires from the SEC.   21




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PART IV
 
 Item 15. Exhibits, Financial Statement Schedules
 Exhibits
  22




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SIGNATURES
  HOMESTORE, INC.By:
    /s/ LEWIS R. BELOTE, IIILewis R. Belote, IIIChief Financial Officer 23




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INDEX
 Number
    
    Exhibit Title31.01
    
    Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.02
    
    Certification of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.