As filed with the Securities and Exchange Commission
on June 4, 2024
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PennyMac Financial
Services, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization) |
83-1098934
(I.R.S. Employer
Identification No.) |
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3043 Townsgate Road
Westlake Village, California
(Address of principal executive offices) |
91361
(Zip Code) |
PennyMac Financial Services, Inc. Executive
Deferred Compensation Plan
(Full title of the plan)
Derek W. Stark
Senior Managing Director, Chief Legal Officer
and Secretary
PennyMac Financial Services, Inc.
3043 Townsgate Road
Westlake Village, California 91361
(Name and address of agent for service)
(818) 224-7442
(Telephone number, including area code, of agent for service)
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer |
x |
Accelerated Filer |
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| Non-Accelerated Filer |
¨ |
Smaller Reporting Company |
¨ |
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Emerging Growth Company |
¨ |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨
EXPLANATORY NOTE
This Registration Statement
on Form S-8 (this “Registration Statement”) is being filed by PennyMac Financial Services, Inc. (the “Registrant”)
for the purpose of registering $150,000,000 of deferred compensation obligations of the Registrant under the PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan (the “Plan”).
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing
the information specified in this Part I will be sent or given to participants in the Plan in accordance with Rule 428(b)(1) promulgated
under the Securities Act. In accordance with Rule 428 promulgated under the Securities Act and the requirements of Part I of
Form S-8, such documents need not be filed with the SEC either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424 promulgated under the Securities Act. These document(s) and the documents incorporated by
reference in this Registration Statement pursuant to Item 3 of Part II hereof, taken together, constitute a prospectus that meets
the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents,
filed by the Registrant with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are incorporated
by reference into this Registration Statement:
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(b) |
All other reports filed with the SEC pursuant to Section 13(a) or 15(d) of the Exchange
Act (other than the reports, or portions thereof, deemed to have been furnished and not filed with the SEC) since the end of the
fiscal year covered by the Annual Report referred to in (a) above; and |
All documents filed by the
Registrant pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, subsequent to the filing of this Registration
Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference into this Registration Statement
and to be a part hereof from the date of filing such documents, except as to specific sections of such documents as set forth therein;
provided, however, that documents or information deemed to have been furnished and not filed in accordance with SEC rules shall
not be deemed incorporated by reference into this Registration Statement. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained in any subsequently filed document which also is deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
Item 4. Description of Securities
Under the Plan, the Registrant
will provide a select group of management or highly compensated employees of the Registrant (each, a “Participant”) with
the opportunity to defer a specified percentage of their pre-tax compensation, including salary, annual bonus, restricted stock units
and performance stock units grants (“Stock Grants”). The securities being registered pursuant to this Registration Statement
represent unsecured general obligations of the Registrant (the “Obligations”) to pay deferred compensation in the future
in accordance with the terms of the Plan. The Plan does not provide for any fixed or guaranteed rate of return on compensation deferred
by Participants. The Registrant does not guarantee the performance of any of the investment measurement options available to Participants
under the Plan, nor does it guarantee any minimum return or payments to any Participant, which may be more or less than the amount(s) of
compensation that a Participant elected to defer.
Under the Plan, Participants
may make annual irrevocable elections to defer a specified portion of their compensation, including Stock Grants. The Registrant will
credit an amount equal to the compensation deferred by a Participant to that Participant’s deferral account under the Plan. In
addition, the Registrant may credit discretionary contributions to a notional company account established for each participant in an
amount determined by the Registrant in its sole discretion. Account balances will be credited with income, gains and losses based on
the performance of investment funds selected by the Participant from a list of funds designated by the Registrant. Participants are at
all times 100% vested in the amounts credited to their deferral accounts, but Registrant contributions may be subject to vesting requirements.
Participants will be eligible to receive distributions of the Deferred Compensation Obligations at pre-selected specified dates prior
to their termination of employment or at or after their termination of employment in a lump sum or installments pursuant to elections
made under the rules of the Plan. Key employees must wait at least six months after termination of employment, other than as a result
of death, to receive a distribution.
The obligations of the Registrant
under the Plan (the “Deferred Compensation Obligations”) will be general unsecured obligations of the Registrant to pay deferred
compensation in the future to Participants in accordance with the terms of the Plan from the general assets of the Registrant, and will
rank pari passu with other unsecured and unsubordinated indebtedness of the Registrant from time to time outstanding. No amount payable
under the Plan shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, voluntary or
involuntary. Any attempt to dispose of any rights to benefits payable under the Plan other than a claim for benefits by a Participant
or his or her beneficiary(ies) will be null and void. The Deferred Compensation Obligations are not subject to redemption, in whole or
in part, prior to the individual payment dates selected by the Participants, except that Participants may withdraw all or a portion of
the value of their Plan accounts under certain specified circumstances. There is no trading market for the Deferred Compensation Obligations.
The Deferred Compensation Obligations are not convertible into another security of the Registrant.
The Registrant reserves
the right to amend the Plan at any time. Any such amendment shall not reduce the vested deferral account balances of any Participant
accrued as of the date of any such amendment or restatement (as if the Participant had incurred a voluntary termination of employment
on such date).
The Registrant may also
terminate the Plan at any time and for any reason. Upon the termination of the Plan, distributions shall be made to Participants in the
normal course, but the Registrant may accelerate distributions to the extent permitted by applicable law. The termination of the Plan
will not adversely affect the right of a Participant who has become entitled to benefits under the Plan; provided however, that the Registrant
has the right to accelerate installment payments without a premium or prepayment penalty by paying the Obligation in a lump sum and without
any liability on account of adverse tax consequences from an early or accelerated payment.
The total amount of the
Deferred Compensation Obligations is not determinable because the amount will vary depending upon the level of participation by eligible
employees and the amounts of their compensation. The duration of the Plan is indefinite (subject to the Registrant’s ability to
terminate the Plan).
The foregoing is not a complete description of
the Obligations and is qualified in its entirety by reference to the terms of the Plan document.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware
General Corporation Law (the “DGCL”) provides that a Delaware corporation may indemnify any persons who were, are or are
threatened to be made parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was an officer,
director, employee or agent of such corporation, or is or was serving at the request of such corporation as an officer, director, employee
or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided
that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s
best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was
illegal. A Delaware corporation may indemnify any persons who were, are or are threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation by reason of the fact that such person is or was a director, officer,
employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent
of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred
by such person in connection with the defense or settlement of such action or suit provided such person acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the corporation’s best interests except that no indemnification
is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director
is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against
the expenses (including attorneys’ fees) actually and reasonably incurred.
The Registrant’s amended
and restated bylaws provide for the indemnification of its directors and officers to the fullest extent permitted under the DGCL.
Section 102(b)(7) of
the DGCL permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally
liable to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director, except for liability
for any:
| · | transaction from which the director derives an improper personal
benefit; |
| · | act or omission not in good faith or that involves intentional
misconduct or a knowing violation of law; |
| · | unlawful payment of dividends or redemption of shares; or |
| · | breach of a director’s duty of loyalty to the corporation
or its stockholders. |
The Registrant’s amended
and restated certificate of incorporation includes such a provision. Expenses incurred by any officer or director in defending any such
action, suit or proceeding in advance of its final disposition shall be paid by the Registrant upon delivery to it of an undertaking,
by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director
or officer is not entitled to be indemnified by the Registrant.
In addition, Section 102(b)(7) of
the DGCL permits a Delaware corporation to include a provision in its certificate of incorporation eliminating or limiting the personal
liability of officers who have consented to service of process to the registered agent of the corporation (such officers, “senior
officers”) for monetary damages for breach of the senior officer’s fiduciary duty. The Registrant’s amended and restated
certificate of incorporation does not currently include such a provision, although the Registrant may adopt such a provision in the future.
Section 174 of the DGCL
provides, among other things, that a director who willfully or negligently approves of an unlawful payment of dividends or an unlawful
stock purchase or redemption may be held liable for such actions. A director who was either absent when the unlawful actions were approved
or dissented at the time may avoid liability by causing his or her dissent to such actions to be entered in the books containing minutes
of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice
of the unlawful acts.
The Registrant’s policy
is to enter into separate indemnification agreements with each of its directors and officers that provide the maximum indemnity allowed
to directors and executive officers by Section 145 of the DGCL and also to provide for certain additional procedural protections.
The Registrant also maintains directors and officers insurance to insure such persons against certain liabilities.
These indemnification provisions
and the indemnification agreements entered into between the Registrant and its officers and directors may be sufficiently broad to permit
indemnification of the Registrant’s officers and directors for liabilities (including reimbursement of expenses incurred) arising
under the Securities Act.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
The exhibits listed below represent a complete
list of exhibits filed or incorporated by reference as part of this Registration Statement.
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during
any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include
any prospectus required by Section 10(a)(3) of the Securities Act.
(ii) To reflect in the prospectus
any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Securities and Exchange Commission (the “Commission”) pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth
in the “Calculation of Registration Fee” table in the effective Registration Statement.
(iii) To include any material information
with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information
in this Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) herein do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained
in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose
of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes
that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit
plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration
Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Westlake Village, State of California, on this fourth day of June, 2024.
| PENNYMAC FINANCIAL SERVICES, INC. |
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| By: |
/s/ Derek W. Stark |
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Derek W. Stark |
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Senior Managing Director, Chief Legal Officer and Secretary |
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE
PRESENTS, that each person whose signature appears below hereby constitutes and appoints David A. Spector and Derek W. Stark, and each
of them, as his true and lawful attorney-in-fact and agent with full power of substitution, for him in any and all capacities, to sign
any and all amendments to this Registration Statement (including post-effective amendments), and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith,
as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact
and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements
of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date
indicated.
| Signature |
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Title |
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Date |
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| /s/ David A. Spector |
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Chairman and Chief Executive Officer |
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June 4, 2024 |
| David A. Spector |
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(principal executive officer) |
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| /s/ Daniel S. Perotti |
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Senior Managing Director and Chief Financial Officer |
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June 4, 2024 |
| Daniel S. Perotti |
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(principal financial officer) |
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| /s/ Gregory L. Hendry |
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Chief Accounting Officer |
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June 4, 2024 |
| Gregory L. Hendry |
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(principal accounting officer) |
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| /s/ Doug Jones |
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Director, President and Chief Mortgage Banking Officer |
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June 4, 2024 |
| Doug Jones |
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| /s/ James Hunt |
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Director |
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June 4, 2024 |
| James Hunt |
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| /s/ Jonathon S. Jacobson |
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Director |
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June 4, 2024 |
| Jonathon S. Jacobson |
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| /s/ Patrick Kinsella |
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Director |
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June 4, 2024 |
| Patrick Kinsella |
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| /s/ Joseph Mazzella |
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Director |
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June 4, 2024 |
| Joseph Mazzella |
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| /s/ Anne D. McCallion |
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Director |
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June 4, 2024 |
| Anne D. McCallion |
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| /s/ Joseph Mazzella |
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Director |
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June 4, 2024 |
| Joseph Mazzella |
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| /s/ Farhad Nanji |
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Director |
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June 4, 2024 |
| Farhad Nanji |
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| /s/ Jeffrey Perlowitz |
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Director |
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June 4, 2024 |
| Jeffrey Perlowitz |
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| /s/ Lisa Shalett |
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Director |
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June 4, 2024 |
| Lisa Shalett |
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| /s/ Theodore Tozer |
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Director |
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June 4, 2024 |
Theodore Tozer
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| /s/ Emily Youssouf |
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Director |
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June 4, 2024 |
| Emily Youssouf |
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Exhibit 5.1
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Goodwin Procter llp |
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601 Marshall Street |
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Redwood City, CA 94063 |
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goodwinlaw.com |
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+1 650 752 3100 |
June 4, 2024
PennyMac Financial Services, Inc.
3043 Townsgate Road
Westlake Village, California 91361
Re: Securities
Being Registered under Registration Statement on Form S-8
We have acted as counsel to you in connection
with your filing of a Registration Statement on Form S-8 (the “Registration Statement”) pursuant to the Securities Act
of 1933, as amended (the “Securities Act”), on or about the date hereof relating to the registration of deferred compensation
obligations (the “Obligations”) of PennyMac Financial Services, Inc., a Delaware corporation (the “Company”).
The Obligations will arise under the PennyMac Financial Services, Inc. Executive Deferred Compensation Plan (the “Plan”).
We
have reviewed such documents and made such examination of law as we have deemed appropriate to give the opinions set forth below.
We have relied, without independent verification, on certificates of public officials and, as to matters of fact material to the opinion
set forth below, on certificates of officers of the Company.
The opinion set forth below is limited to the
Delaware General Corporation Law.
Based on the foregoing, we are of the opinion
that the Obligations, when established pursuant to the terms of the Plan after approval by or pursuant to the terms of authorization from
the Company’s Board of Directors, and when delivered and paid for in accordance with the terms of the Plan, will be duly authorized
and will be valid and binding obligations of the Company enforceable in accordance with their terms and the terms of the Plan.
The opinion expressed above is subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general application affecting the rights and remedies
of creditors and to general principles of equity.
This opinion letter and the opinion it contains
shall be interpreted in accordance with the Core Opinion Principles as published in 74 Business Lawyer 815 (Summer 2019).
We hereby consent to the inclusion of this opinion
as Exhibit 5.1 to the Registration Statement. In giving our consent, we do not admit that we are in the category of persons whose
consent is required under Section 7 of the Securities Act or the rules and regulations thereunder.
PennyMac Financial Services, Inc.
June 4, 2024
Page 2
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Very truly yours, |
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/s/ Goodwin Procter LLP |
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GOODWIN PROCTER LLP |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of our reports dated February 21, 2024 relating to the financial statements of PennyMac Financial Services, Inc. and subsidiaries
(the “Company”) and the effectiveness of the Company’s internal control over financial reporting, appearing in the Annual
Report on Form 10-K of PennyMac Financial Services, Inc. for the year ended December 31, 2023.
/s/ Deloitte & Touche LLP
Los Angeles, California
June 4, 2024
Exhibit 99.1
PennyMac
Financial Services, Inc. Executive
Deferred
Compensation Plan
Effective Date
June 4, 2024
PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
| Article I |
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Establishment and
Purpose |
1 |
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| Article II |
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Definitions |
1 |
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| Article III |
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Eligibility and Participation |
7 |
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| Article IV |
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Deferrals |
7 |
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| Article V |
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Company Contributions |
11 |
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| Article VI |
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Payments from Accounts |
12 |
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| Article VII |
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Valuation of Account Balances;
Investments |
16 |
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| Article VIII |
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Administration |
17 |
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| Article IX |
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Amendment and Termination |
18 |
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| Article X |
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Informal Funding |
19 |
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| Article XI |
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Claims |
19 |
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| Article XII |
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General Provisions |
25 |
| Content
Copyright ©2024 Newport Group, Inc. All Rights Reserved. | |
| | |
PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
Article I
Establishment and Purpose
PennyMac Financial Services, Inc.
(the “Company”) has adopted this PennyMac Financial Services, Inc. Executive Deferred Compensation Plan, applicable
to Compensation deferred under Compensation Deferral Agreements submitted on and after the Effective Date and Company Contributions credited
on or after the Effective Date.
The purpose of the Plan is to attract
and retain key employees by providing them with an opportunity to defer receipt of a portion of their salary, bonus, and other specified
compensation earned in the United States. The Plan is not intended to meet the qualification requirements of Code Section 401(a) but
is intended to meet the requirements of Code Section 409A and shall be operated and interpreted consistent with that intent.
The Plan constitutes an unsecured promise
by a Participating Employer to pay benefits in the future. Participants in the Plan shall have the status of general unsecured creditors
of the Company or the Participating Employer, as applicable. Each Participating Employer shall be solely responsible for payment of the
benefits attributable to services performed for it. The Plan is unfunded for Federal tax purposes and is intended to be an unfunded arrangement
primarily for the purpose of providing deferred compensation to eligible employees who are part of a select group of management or highly
compensated employees of the Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and independent
contractors. Any amounts set aside to defray the liabilities assumed by the Company or a Participating Employer will remain the general
assets of the Company or the Participating Employer and shall remain subject to the claims of the Company’s or the Participating
Employer's creditors until such amounts are distributed to the Participants.
Article II
Definitions
| 2.1 | Account.
Account means a bookkeeping account maintained by the Committee to record the payment
obligation of a Participating Employer to a Participant as determined under the terms of
the Plan. The Committee may maintain an Account to record the total obligation to a Participant
and component Accounts to reflect amounts payable at different times and in different forms.
Reference to an Account means any such Account established by the Committee, as the context
requires. Accounts are intended to constitute unfunded obligations within the meaning of
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. |
| 2.2 | Account
Balance. Account Balance means, with respect to any Account, the total payment obligation
owed to a Participant from such Account as of the most recent Valuation Date. |
| 2.3 | Affiliate.
Affiliate means a corporation, trade or business that, together with the Company, is
treated as a single employer under Code Section 414(b) or (c). |
| Content Copyright ©2024 Newport Group, Inc. All Rights Reserved. | |
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| | Page 1 of 28 |
PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
| 2.4 | Beneficiary.
Beneficiary means a natural person, estate, or trust designated by a Participant in accordance
with Section 6.4 hereof to receive payments to which a Beneficiary is entitled in accordance
with provisions of the Plan. |
| 2.5 | Board
of Directors. Board of Directors means, for a Participating Employer organized as a corporation,
its board of directors. |
| 2.6 | Business
Day. Business Day means each day on which the New York Stock Exchange is open for business. |
| 2.7 | Change
in Control. Change in Control means, with respect to a Participating Employer that is
organized as a corporation, any of the following events: (i) a change in the ownership
of the Participating Employer, (ii) a change in the effective control of the Participating
Employer, or (iii) a change in the ownership of a substantial portion of the assets
of the Participating Employer. |
Change
in Ownership. For purposes of this Section, a change in the ownership of the Participating Employer
occurs on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of the Participating
Employer that, together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting
power of the stock of the Participating Employer. The acquisition by a person or group owning more than 50% of the total fair market
value or total voting power of the stock of such Participating Employer of additional shares of such Participating Employer shall not
constitute a “change of the ownership” of such Participating Employer.
Change
in Effective Control. A change in the effective control of the Participating Employer occurs
on the date on which either: (i) a person, or more than one person acting as a group, acquires ownership of stock of the Participating
Employer possessing 50 % or more of the total voting power of the stock of the Participating Employer, taking into account all such stock
acquired during the 12-month period ending on the date of the most recent acquisition, provided that the acquisition by a person or group
already owning more than 50% of the total fair market value or total voting power of the stock of such Participating Employer of additional
shares of such Participating Employer shall not constitute a “change of effective control” of such Participating Employer,
or (ii) a majority of the members of the Participating Employer’s Board of Directors is replaced during any 12-month period
by directors whose appointment or election is not endorsed by a majority of the members of such Board of Directors prior to the date
of the appointment or election, but only if no other corporation is a majority shareholder of the Participating Employer.
Change
in Ownership of Substantial Portion of Assets. A change in the ownership of a substantial portion
of assets occurs on the date on which any one person, or more than one person acting as a group, other than a person or group of persons
that is related to the Participating Employer, acquires assets from the Participating Employer that have a total gross fair market value
equal to or more than 50% of the total gross fair market value of all of the assets of the Participating Employer immediately prior to
such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most
recent acquisition. A transfer of assets shall not be treated as a “change in the ownership of a substantial portion of the assets”
when such transfer is made to an entity that is controlled by the shareholders of the transferor corporation as determined under Treas.
Reg. section 1.409A-3(i)(5)(vii)(B).
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PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
An event constitutes a Change
in Control with respect to a Participant only if the Participant performs services for the Participating Employer that has experienced
the Change in Control, or the Participant’s relationship to the affected Participating Employer otherwise satisfies the requirements
of Treasury Regulation Section 1.409A-3(i)(5)(ii).
| 2.8 | Claimant.
Claimant means a Participant or Beneficiary filing a claim under Article XI of this
Plan. |
| 2.9 | Code.
Code means the Internal Revenue Code of 1986, as amended from time to time. |
| 2.10 | Code
Section 409A. Code Section 409A means section 409A of the Code, and regulations
and other guidance issued by the Treasury Department and Internal Revenue Service thereunder. |
| 2.11 | Committee.
Committee means the Company, the Board of Directors, the Compensation Committee or a
subcommittee appointed thereof to administer the Plan. |
| 2.12 | Company.
Company means PennyMac Financial Services, Inc. |
| 2.13 | Company
Contribution. Company Contribution means a credit by a Participating Employer to a Participant’s
Retirement Account in accordance with the provisions of Article V of the Plan. Unless
the context clearly indicates otherwise, a reference to Company Contribution shall include
Earnings attributable to such contribution. |
| 2.14 | Compensation.
Compensation means a Participant’s salary, bonus, commission, and such other cash
compensation approved by the Committee as Compensation that may be deferred under Section 4.2
of this Plan. Compensation may also include restricted stock units and performance stock
units. Compensation shall exclude any compensation that has been previously deferred under
this Plan or any other arrangement subject to Code Section 409A and excluding any compensation
that is not U.S. source income. |
| 2.15 | Compensation
Deferral Agreement. Compensation Deferral Agreement means an agreement between a Participant
and a Participating Employer that specifies: (i) the amount of each component of Compensation
that the Participant has elected to defer to the Plan in accordance with the provisions of
Article IV, (ii) the Payment Schedule applicable to the Retirement Account and
any Specified Date Account established under the Compensation Deferral Agreement and (iii) the
allocation of cash Deferrals among the Retirement Account and Specified Date Account established
for each Plan Year Account. |
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PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
| 2.16 | Deferral.
Deferral means a credit to a Participant’s Account(s) that records that portion
of the Participant’s Compensation that the Participant has elected to defer to the
Plan in accordance with the provisions of Article IV. Unless the context of the Plan
clearly indicates otherwise, a reference to Deferrals includes Earnings attributable to such
Deferrals. |
| 2.17 | Earnings.
Earnings means an adjustment to the value of an Account in accordance with Article VII. |
| 2.18 | Effective
Date. Effective Date means June 1, 2024. |
| 2.19 | Eligible
Employee. Eligible Employee means an Employee who is a member of a select group of management
or highly compensated employees who has been notified during an applicable enrollment of
their status as an Eligible Employee. The Committee has the discretion to determine which
Employees are Eligible Employees for each enrollment. |
| 2.20 | Employee.
Employee means a common-law employee of an Employer. |
| 2.21 | Employer.
Employer means the Company or Affiliate that employs an Employee. |
| 2.22 | ERISA.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time
to time. |
| 2.23 | Participant.
Participant means an individual described in Article III. |
| 2.24 | Participating
Employer. Participating Employer means the Company and each Affiliate who has adopted
the Plan with the consent of the Company. Each Participating Employer shall be identified
on Schedule A attached hereto. |
| 2.25 | Payment
Schedule. Payment Schedule means the date as of which payment of an Account under the
Plan will commence and the form in which payment of such Account will be made. |
| 2.26 | Performance-Based
Compensation. Performance-Based Compensation means Compensation where the amount of,
or entitlement to, the Compensation is contingent on the satisfaction of pre-established
organizational or individual performance criteria relating to a performance period of at
least 12 consecutive months. Organizational or individual performance criteria are considered
pre-established if established in writing by not later than 90 days after the commencement
of the period of service to which the criteria relate, provided that the outcome is substantially
uncertain at the time the criteria are established. Performance-Based Compensation shall
not include any Compensation payable upon the Participant’s death or disability (as
defined in Treas. Section 1.409A-1(e)) without regard to the satisfaction of the performance
criteria. |
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PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
| 2.27 | Plan.
Plan means “PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan” as documented herein and as may be amended from time to time hereafter. However,
to the extent permitted or required under Code Section 409A, the term Plan may in the
appropriate context also mean a portion of the Plan that is treated as a single plan under
Treas. Reg. Section 1.409A-1(c), or the Plan or portion of the Plan and any other nonqualified
deferred compensation plan or portion thereof that is treated as a single plan under such
section. |
| 2.28 | Plan
Year. Plan Year means January 1 through December 31. |
| 2.29 | Plan
Year Account. A Plan Year Account means the Account established for each Plan Year to
record a Participant’s total Deferrals for the Plan Year. Each Plan Year Account shall
consist of a Retirement Account and Specified Date Account. |
| 2.30 | Retirement.
Retirement means a Participant’s Separation from Service occurring on or after the
date they |
(a) attain age 60 and
(b) have been credited
with ten Years of Service.
| 2.31 | Retirement
Account. A Retirement Account means: |
| (a) | an
Account established by the Committee with respect to a Plan Year to record Deferrals other
than performance stock units that the Participant elects to receive upon Separation from
Service in accordance with Section 6.3 and any Company Contributions made with respect
to the Plan Year and |
| (b) | a
separate, dedicated Retirement Account established to record Deferrals of performance stock
units awarded during the Plan Year to be paid in accordance with Section 6.3 or, if
such Deferrals are allocated to a dedicated Specified Date Account, the form of payment in
the event of the Participant’s earlier Separation from Service. |
| 2.32 | Separation
from Service. Separation from Service means an Employee’s termination of employment
with the Employer and all Affiliates. |
Except in the case of an Employee
on a bona fide leave of absence as provided below, an Employee is deemed to have incurred a Separation from Service if the Employer and
the Employee reasonably anticipated that the level of services to be performed by the Employee after a date certain would be reduced
to 20% or less of the average services rendered by the Employee during the immediately preceding 36-month period (or the total period
of employment, if less than 36 months), disregarding periods during which the Employee was on a bona fide leave of absence.
An Employee who is absent
from work due to military leave, sick leave, or other bona fide leave of absence shall incur a Separation from Service on the first date
immediately following the later of: (i) the six month anniversary of the commencement of the leave (29 months in the case of disability
described in Treas. Reg. §1.409A-1(h)(1)(i)), or (ii) the expiration of the Employee’s right, if any, to reemployment
under statute or contract.
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PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
If a Participant ceases to
provide services as an Employee and begins providing services as an independent contractor for the Employer, a Separation from Service
shall occur only if the parties anticipate that the level of services to be provided as an independent contractor are such that a Separation
from Service would have occurred if the Employee had continued to provide services at that level as an Employee. If, in accordance with
the preceding sentence, no Separation from Service occurs as of the date the individual’s employment status changes, a Separation
from Service shall occur thereafter only upon the 12-month anniversary of the date all contracts with the Employer have expired, provided
the Participant does not perform services for the Employer during that time.
For purposes of determining
whether a Separation from Service has occurred, the Employer means the Employer as defined in Section 2.22 of the Plan, except that
in applying Code sections 1563(a)(1), (2) and (3) for purposes of determining whether another organization is an Affiliate
of the Company under Code Section 414(b), and in applying Treasury Regulation Section 1.414(c)-2 for purposes of determining
whether another organization is an Affiliate of the Company under Code Section 414(c), “at least 50 percent” shall be
used instead of “at least 80 percent” each place it appears in those sections.
The Committee specifically
reserves the right to determine whether a sale or other disposition of substantial assets to an unrelated party constitutes a Separation
from Service with respect to a Participant providing services to the seller immediately prior to the transaction and providing services
to the buyer after the transaction.
| 2.33 | Specified
Date Account. Specified Date Account means the Account established by the Committee for
a Plan Year to record any Deferrals that the Participant elects to be paid in a specified
year in accordance with Section 6.2. |
| 2.34 | Unforeseeable
Emergency. Unforeseeable Emergency means a severe financial hardship to the Participant
resulting from an illness or accident of the Participant, the Participant’s spouse,
the Participant’s dependent (as defined in Code section 152, without regard to section
152(b)(1), (b)(2), and (d)(1)(B)), or a Beneficiary; loss of the Participant’s property
due to casualty (including the need to rebuild a home following damage to a home not otherwise
covered by insurance, for example, as a result of a natural disaster); or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond the control of the Participant.
The types of events which may qualify as an Unforeseeable Emergency may be limited by the
Committee. |
| 2.35 | Valuation
Date. Valuation Date means each Business Day. |
| 2.36 | Year
of Service. Year of Service means each 12-month period of service commencing on an Employee’s
hire date with the Company or an Affiliate and each anniversary thereof. An Employee’s
total Years of Service means the Years of Service credited during a period of continuous
service commencing on the Employee’s date of hire and ending on their Separation from
Service. |
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PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
Article III
Eligibility and Participation
| 3.1 | Eligibility
and Participation. All Eligible Employees may enroll in the Plan. Eligible Employees
become Participants on the first to occur of (i) the date on which the first Compensation
Deferral Agreement becomes irrevocable under Article IV, or (ii) the date Company
Contributions are credited to an Account on behalf of such Eligible Employee. |
| 3.2 | Duration.
Only Eligible Employees may submit Compensation Deferral Agreements during an enrollment
and receive Company Contributions during the Plan Year. A Participant who is no longer an
Eligible Employee but has not incurred a Separation from Service will not be allowed to submit
Compensation Deferral Agreements but may otherwise exercise all of the rights of a Participant
under the Plan with respect to their Account(s). On and after a Separation from Service,
a Participant shall remain a Participant as long as their Account Balance is greater than
zero (0). All Participants, regardless of employment status, will continue to be credited
with Earnings and during such time may continue to make allocation elections as provided
in Section 7.4. An individual shall cease being a Participant in the Plan when his Account
has been reduced to zero (0). |
| 3.3 | Rehires.
An Eligible Employee who Separates from Service and who subsequently resumes performing services
for a Participating Employer in the same calendar year (regardless of eligibility) will have
their Compensation Deferral Agreement for such year, if any, reinstated, but their eligibility
to participate in the Plan in years subsequent to the year of rehire shall be governed by
the provisions of Section 3.1. |
Article IV
Deferrals
| 4.1 | Deferral
Elections, Generally. |
| (a) | An
Eligible Employee may make an initial election to defer Compensation by submitting a Compensation
Deferral Agreement during the enrollment periods established by the Committee and in the
manner specified by the Committee, but in any event, in accordance with Section 4.2.
Unless an earlier date is specified in the Compensation Deferral Agreement, deferral elections
with respect to a Compensation source (such as salary, bonus or other Compensation) become
irrevocable on the latest date applicable to such Compensation source under Section 4.2. |
| (b) | A
Compensation Deferral Agreement that is not timely filed with respect to a service period
or component of Compensation, or that is submitted by a Participant who Separates from Service
prior to the latest date such agreement would become irrevocable under Section 409A,
shall be considered null and void and shall not take effect with respect to such item of
Compensation. The Committee may modify or revoke any Compensation Deferral Agreement prior
to the date the election becomes irrevocable under the rules of Section 4.2. |
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PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
| (c) | The
Committee may permit different deferral amounts for each component of Compensation and may
establish a minimum or maximum deferral amount for each such component. Unless otherwise
specified by the Committee in the Compensation Deferral Agreement, Participants may defer
a minimum of 5% and a maximum of 75% of their base compensation and a minimum of 5% up to
a maximum of 90% of bonus, commissions, restricted stock units and/or performance stock units. |
| (d) | Deferrals
of cash Compensation shall be calculated with respect to the gross cash Compensation payable
to the Participant prior to any deductions or withholdings but shall be reduced by the Committee
as necessary so as not to exceed 100% of the cash Compensation of the Participant remaining
after deduction of all required income and employment taxes, required employee benefit deductions
and other deductions required by law. Changes to payroll withholdings that affect the amount
of Compensation being deferred to the Plan shall be allowed only to the extent permissible
under Code Section 409A. |
| (e) | Annual
Deferrals will be credited to a Participant’s Plan Year Account for the Plan Year identified
in the Compensation Deferral Agreement. The Eligible Employee shall specify on their Compensation
Deferral Agreement the amount of Deferrals and whether to allocate all or a portion of such
Deferrals to their Retirement Account or Specified Date Account established as subaccounts
within the Plan Year Account. If no designation is made, Deferrals shall be allocated to
the Retirement Account established for the applicable Plan Year. Deferrals of stock units
are always allocated to a Retirement Account as provided in Sections 2.31 and 4.3. If unit-based
Deferrals are based on a percentage of a stock unit award, any fractional units will be rounded
down to the next whole unit. |
4.2 Timing
Requirements for Compensation Deferral Agreements.
| (a) | Initial
Eligibility. The Committee may permit an Eligible Employee to defer Compensation earned
in the first year of eligibility. The Compensation Deferral Agreement must be filed within
30 days after attaining Eligible Employee status and becomes irrevocable not later than such
30-day period. |
A Compensation Deferral Agreement
filed under this subsection (a) applies to Compensation earned after the date that the Compensation Deferral Agreement becomes irrevocable.
| (b) | Prior
Year Election. Except as otherwise provided in this Section 4.2, the Committee may
permit an Eligible Employee to defer Compensation by filing a Compensation Deferral Agreement
no later than December 31 of the year prior to the year in which the Compensation to
be deferred is earned. A Compensation Deferral Agreement filed under this paragraph shall
become irrevocable with respect to such Compensation not later than the December 31
filing deadline. |
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PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
| (c) | Performance-Based
Compensation. The Committee may permit an Eligible Employee to defer Compensation which
qualifies as Performance-Based Compensation by filing a Compensation Deferral Agreement no
later than the date that is six months before the end of the applicable performance period,
provided that: |
| (i) | the
performance period is at least 12 consecutive months; |
| (ii) | the
Participant performs services continuously from the later of the beginning of the performance
period or the date the performance criteria are established through the date the Compensation
Deferral Agreement is submitted; and |
| (ii) | the
Compensation is not readily ascertainable as of the date the Compensation Deferral Agreement
is filed. |
A Compensation Deferral Agreement
filed under this subsection (c) shall become irrevocable with respect to such Compensation not later than the six-month deadline
or, if earlier, the date such Compensation became ascertainable. If an election is filed under this subsection (c) after Performance-Based
Compensation has become ascertainable, the Deferral election shall be deemed to be modified to not exceed the portion of such Compensation
that is not ascertainable.
Any election to defer Performance-Based
Compensation that is made in accordance with this subsection (c)and that becomes payable as a result of the Participant’s death
or disability (as defined in Treas. Reg. Section 1.409A-1(e)) or upon a change in control (as defined in Treas. Reg. Section 1.409A-3(i)(5))
prior to the satisfaction of the performance criteria, will be void unless it would be considered timely under another rule described
in this Section.
| (d) | Certain
Forfeitable Rights. With respect to a legally binding right to a payment in a subsequent
year that is subject to a forfeiture condition requiring the Participant’s continued
services for a period of at least 12 months from the date the Participant obtains the legally
binding right, the Committee may permit an Eligible Employee to defer such Compensation by
filing a Compensation Deferral Agreement on or before the 30th day after the legally
binding right to the Compensation accrues, provided that the Compensation Deferral Agreement
is submitted at least 12 months in advance of the earliest date on which the forfeiture condition
could lapse. The Compensation Deferral Agreement described in this paragraph becomes irrevocable
not later than such 30th day. If the forfeiture condition applicable to the payment
lapses before the end of such 12-month period as a result of the Participant’s death
or disability (as defined in Treas. Reg. Section 1.409A-3(i)(4)) or upon a change in
control (as defined in Treas. Reg. Section 1.409A-3(i)(5)), the Compensation Deferral
Agreement will be void unless it would be considered timely under another rule described
in this Section. |
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PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
| (e) | “Evergreen”
Deferral Elections. The Committee, in its discretion, may provide that Compensation Deferral
Agreements or any component of such Compensation Deferral Agreements, including: |
| · | a
Compensation source and amount of such Compensation source to be deferred, or |
| · | the
Retirement Payment Schedule applicable to a Plan Year Account |
will continue in effect for
subsequent Plan Years or performance periods by communicating that intention to Participants in writing prior to the date Compensation
Deferral Agreements become irrevocable under this Section 4.2, which determination may made with respect to all Participants or
a subset of Participants as determined by the Committee in its discretion . An evergreen Compensation Deferral Agreement may be revoked
or modified in writing prospectively by the Participant or the Committee with respect to Compensation for which such election remains
revocable under this Section 4.2.
| (f) | A
Compensation Deferral Agreement is deemed to be revoked for subsequent years if the Participant
is not an Eligible Employee as of the last permissible date for making elections under this
Section 4.2 or if the Compensation Deferral Agreement is cancelled in accordance with
Section 4.6. |
| 4.3 | Allocation
of Deferrals. A Compensation Deferral Agreement may allocate all or a portion of an Eligible
Employee’s cash Deferrals and restricted stock units that are not Performance-Based
Compensation deferred under a Compensation Deferral Agreement submitted after the year of
grant under Section 4.2(c) for a Plan Year to the Participant’s Retirement
Account or Specified Date Account established for such Plan Year. Deferrals of a stock unit
award constituting Performance-Based Compensation and deferred under a Compensation Deferral
Agreement submitted after the year of grant may be allocated between a Retirement Account
and/or Specified Date Account established solely for the purpose of recording and paying
such award under the terms of this Plan. |
| 4.4 | Deductions
from Pay. The Committee has the authority to determine the payroll practices under which
any component of Compensation subject to a Compensation Deferral Agreement will be deducted
from a Participant’s Compensation. |
| 4.5 | Vesting. Participant Deferrals of cash Compensation shall be 100%
vested at all times. Deferrals of vesting awards of Compensation shall become vested in accordance with the provisions of the
underlying award. |
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PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
| 4.6 | Cancellation
of Deferrals. The Committee may cancel a Participant’s Deferrals: (i) for
the balance of the Plan Year in which an Unforeseeable Emergency occurs, and (ii) during
periods in which the Participant is unable to perform the duties of their position or any
substantially similar position due to a mental or physical impairment that can be expected
to result in death or last for a continuous period of at least six months, provided cancellation
occurs by the later of the end of the taxable year of the Participant or the 15th
day of the third month following the date the Participant incurs the disability (as defined
in this paragraph (ii)). |
Article V
Company Contributions
| 5.1 | Discretionary
Company Contributions. A Participating Employer may, from time to time in its sole and
absolute discretion, credit discretionary Company Contributions in the form of supplemental
or other contributions to any Participant in any amount determined by the Participating Employer.
Company Contributions are credited to the Participant’s Retirement Account subaccount
within the Plan Year Account to which the Company Contribution relates. |
Supplemental
Matching Contribution. Company Contributions may take the form of “supplemental”
matching contributions, at the same contribution rate provided under the Company 401(k) plan, applied to the portion of the Participant’s
cash Compensation (including amounts deferred under this Plan) that exceeds the amount of compensation taken into account in determining
the maximum amount of matching contribution under the terms of such 401(k) plan. A Participant is not required to make any elective
deferrals to such 401(k) plan as a condition to receiving supplemental matching Company Contributions under this Plan. However,
the Committee may require that a Participant must meet the same conditions for receiving a matching contribution under the 401(k) plan,
including, for example, any requirement to be employed on the last day of the plan year.
Supplemental
Non-Elective Contribution. Company Contributions may take the form of supplemental non-elective contributions at the same rate such
non-elective contributions are made to a Participant’s tax-qualified profit sharing plan account, applied to the portion of the
Participant’s cash Compensation (including amounts deferred under this Plan) that exceeds the amount of compensation taken into
account in determining the amount of the non-elective contribution under the terms of such profit sharing plan. The Committee may require
that a Participant meet the same conditions for receiving a non-elective contribution under the profit sharing plan, including, for example,
any requirement to be employed on the last day of the plan year.
Discretionary
Company Contributions are credited at the sole discretion of the Participating Employer and the fact that a discretionary Company Contribution
is credited in one year shall not obligate the Participating Employer to continue to make such Company Contributions in subsequent years.
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PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
| 5.2 | Vesting.
Company Contributions vest according to the schedule specified by the Participating Employer
on or before the time the contributions are made. Supplemental contributions vest at the
same rate as the corresponding contributions under the Company 401(k)/profit sharing plan. |
Unvested
Company Contributions as of a Participant’s Separation from Service will be forfeited.
Article VI
Payments from Accounts
| 6.1 | General
Rules. A Participant’s Plan Year Accounts become payable upon the first to occur
of the payment events applicable to each such Account under Sections 6.2 (if elected) through
6.7. |
Payment events and Payment Schedules
elected by the Participant shall be set forth in a valid Compensation Deferral Agreement or in a valid modification election applicable
to such Account as described in Section 6.9.
Payment amounts are based
on Account Balances as of the first day of the month in which payment is made in Sections 6.2 through 6.6.
| 6.2 | Specified
Date Accounts. |
Commencement.
Payment of a Specified Date Account will be made or begin in the fourth calendar year following
the Plan Year for which a Participant’s Compensation Deferral Agreement that establishes the Specified Date Account is established,
unless the Participant elects a later calendar year.
Form of
Payment. Subject to Section 6.6, each Specified Date Account will be paid in a lump sum unless the Participant elects to receive
such Account in substantially equal annual installments over a designated number of calendar years up to three (3) years.
Notwithstanding a Participant’s
elections described in this Section 6.2, a Participant’s Specified Date Accounts having payment years that occur after a Participant’s
Separation from Service prior to Retirement will be paid as provided in Section 6.3.
| 6.3 | Separation
from Service. Upon a Participant’s Separation from Service other than death, the
Participant is entitled to receive the vested portion of their Retirement Accounts and any
Specified Date Accounts that, under Section 6.2, are scheduled to commence in a calendar
year that commences after the Participant’s Separation from Service, which shall be
paid out as a Pre-Retirement Lump Sum as described below. |
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PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
Commencement.
Payment commences upon Separation from Service. Notwithstanding the foregoing, payment to a Participant who is a “specified
employee” as defined in Code Section 409A(a)(2)(B) will commence in the seventh month following their Separation from
Service.
Pre-Retirement
Lump Sum. A Participant who incurs a Separation from Service prior to becoming Retirement eligible will receive their distributable
Accounts in a single lump sum. Specified Date Accounts that have commenced payment on or before a Participant’s Separation from
Service are not distributable under this Section 6.3 and will continue to pay as elected under Section 6.2.
Retirement
Payments. Subject to Section 6.6, if a Participant’s Separation from Service occurs after becoming Retirement eligible,
each Retirement Account will be paid in a lump sum unless the Participant elected to receive such Retirement Account in substantially
equal annual installments over a designated number of calendar years up to ten (10) years. A Specified Date Account payable under
this Section 6.3 will be paid in the same form as the Retirement Account established with respect to the same Plan Year, or, in
the case of a Deferral of restricted stock units that are Performance-Based Compensation and deferred after the grant year under Section 4.2(c),
the Retirement Account established, or other Retirement election made in connection with the deferral of such award. Specified Date Accounts
that have commenced payment on or before a Participant’s Separation from Service are not distributable under this Section 6.3
and will continue to pay as elected under Section 6.2.
Effect of Modifications
The pre-retirement lump sum payment may not be modified
under Section 6.9.
A modified Retirement Account Payment Schedule under Section 6.9
also shall apply to any Specified Date Account established with respect to the same Plan Year or, in the case of a Deferral of restricted
stock units that are Performance-Based Compensation and deferred after the grant year under Section 4.2(c), the Retirement Account
established, or other Retirement election made in connection with the deferral of such award.
| 6.4 | Death.
Notwithstanding anything to the contrary in this Article VI, upon the death of the Participant
(regardless of whether such Participant is an Employee at the time of death), all remaining
vested Account Balances shall be paid to their Beneficiary in a single lump sum no later
than December 31 of the calendar year following the year of the Participant’s
death. |
| (a) | Designation
of Beneficiary in General. The Participant shall designate a Beneficiary in the manner
and on such terms and conditions as the Committee may prescribe. No such designation shall
become effective unless filed with the Committee during the Participant’s lifetime.
Any designation shall remain in effect until a new designation is filed with the Committee;
provided, however, that in the event a Participant designates their spouse as a Beneficiary,
such designation shall be automatically revoked upon the dissolution of the marriage unless,
following such dissolution, the Participant submits a new designation naming the former spouse
as a Beneficiary. A Participant may from time to time change their designated Beneficiary
without the consent of a previously designated Beneficiary by filing a new designation with
the Committee. |
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PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
| (b) | No Beneficiary.
If a designated Beneficiary does not survive the Participant, or if there is no valid Beneficiary
designation, amounts payable under the Plan upon the death of the Participant shall be paid
to the Participant’s spouse, or if there is no surviving spouse, then to the duly appointed
and currently acting personal representative of the Participant’s estate. |
| 6.5 | Unforeseeable
Emergency. A Participant who experiences an Unforeseeable Emergency may submit a written
request to the Committee to receive payment of all or any portion of their vested Deferrals.
If the emergency need cannot be relieved by cessation of Deferrals to the Plan, the Committee
may approve an emergency payment therefrom not to exceed the amount reasonably necessary
to satisfy the need, taking into account the additional compensation that is available to
the Participant as the result of cancellation of deferrals to the Plan, including amounts
necessary to pay any taxes or penalties that the Participant reasonably anticipates will
result from the payment. The amount of the emergency payment shall be subtracted pro rata
from the Participant’s Plan Year Accounts. Emergency payments shall be paid in a single
lump sum within the 90-day period following the date the Committee approves the payment. |
| 6.6 | Administrative
Cash-Out of Small Balances. Notwithstanding anything to the contrary in this Article VI,
the Committee may at any time and without regard to whether a payment event has occurred,
direct in writing an immediate lump sum payment of the Participant’s Accounts if the
balance of such Accounts, combined with any other amounts required to be treated as deferred
under a single plan pursuant to Code Section 409A, does not exceed the applicable dollar
amount under Code Section 402(g)(1)(B), provided any other such aggregated amounts are
also distributed in a lump sum at the same time. |
| 6.7 | Acceleration
of or Delay in Payments. Notwithstanding anything to the contrary in this Article VI,
the Committee, in its sole and absolute discretion, may elect to accelerate the time or form
of payment of an Account, provided such acceleration is permitted under Treas. Reg. Section 1.409A-3(j)(4).
The Committee may also, in its sole and absolute discretion, delay the time for payment of
an Account, to the extent permitted under Treas. Reg. Section 1.409A-2(b)(7). |
| 6.8 | Rules Applicable
to Installment Payments. If a Payment Schedule for a Specified Date Account specifies
installment payments, payments will be made beginning in the payment commencement year for
such installments and shall continue to be made in each subsequent calendar year until the
number of installment payments specified in the Payment Schedule has been paid. |
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PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
If
a Payment Schedule for a Retirement Account specifies installment payments, installments will commence upon the payment commencement
date specified in Section 6.3 with subsequent installments paid during each subsequent calendar year until the number of installment
payments specified in the Payment Schedule has been paid.
The amount of each installment payment shall be determined
by dividing (a) by (b), where (a) equals the Account Balance as of the first Valuation Date in the month payment is made and
(b) equals the remaining number of installment payments. For installment payments of stock units, installments are based on the
number of units held in the applicable Account as of the Valuation Date and not on the cash value of the units, with any fractional unit
rounded down to the next whole unit. For purposes of Section 6.9, installment payments will be treated as a single payment. If an
Account is payable in installments, the Account will continue to be credited with Earnings in accordance with Article VII hereof
until the Account is completely distributed.
| 6.9 | Modifications
to Payment Schedules. While employed by the Company or an Affiliate, a Participant may
modify the Payment Schedule elected by him or her with respect to Retirement or a Specified
Date Account, consistent with the permissible Payment Schedules available under the Plan
for the applicable Account. All modifications must comply with the requirements of this Section 6.9. |
| (a) | Time
of Election. The modification election must be submitted to the Committee not less than
12 months prior to the date payments would have commenced under the Payment Schedule in effect
prior to modification (the “Prior Election”). In the case of a Specified Date
Account, the payment commencement date for the Prior Election is January 1 of the designated
calendar year. |
| (b) | Date
of Payment under Modified Payment Schedule. The date payments are to commence under the
modified Payment Schedule must be no earlier than five years after the date payment would
have commenced under the Prior Election. Under no circumstances may a modification election
result in an acceleration of payments in violation of Code Section 409A. If the Participant
modifies only the form, and not the commencement date for payment, payments shall commence
on the fifth anniversary of the date payment would have commenced under the Prior Election. |
| (c) | Irrevocability;
Effective Date. A modification election is irrevocable when filed and becomes effective
12 months after the filing date. |
| (d) | Effect
on Accounts. An election to modify a Payment Schedule is specific to the Account to which
it applies and shall not be construed to affect the Payment Schedules or payment events of
any other Accounts. |
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PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
Article VII
Valuation of Account Balances; Investments
| 7.1 | Valuation.
Deferrals shall be credited to appropriate Accounts on the date such Compensation would
have been paid to the Participant absent the Compensation Deferral Agreement. Valuation of
Accounts shall be performed under procedures approved by the Committee. |
| 7.2 | Earnings
Credit. Each Account will be credited with Earnings on each Business Day, based upon
the Participant’s investment allocation among a menu of investment options selected
in advance by the Committee, in accordance with the provisions of this Article VII (“investment
allocation”). |
| 7.3 | Investment
Options. The Committee will determine investment options. The Committee, in its sole
discretion, shall be permitted to add or remove investment options from the Plan menu from
time to time, provided that any such additions or removals of investment options shall not
be effective with respect to any period prior to the effective date of such change. |
| 7.4 | Investment
Allocations. A Participant’s investment allocation constitutes a deemed, not actual,
investment among the investment options comprising the investment menu. At no time shall
a Participant have any real or beneficial ownership in any investment option included in
the investment menu, nor shall the Participating Employer or any trustee acting on its behalf
have any obligation to purchase actual securities as a result of a Participant’s investment
allocation. A Participant’s investment allocation shall be used solely for purposes
of adjusting the value of a Participant’s Account Balances. |
A Participant shall specify an investment allocation for
each of his Accounts in accordance with procedures established by the Committee. Allocation among the investment options must be designated
in increments of 1%. The Participant’s investment allocation will become effective on the same Business Day or, in the case of
investment allocations received after a time specified by the Committee, the next Business Day.
A Participant may change an investment allocation on any
Business Day, both with respect to future credits to the Plan and with respect to existing Account Balances, in accordance with procedures
adopted by the Committee. Changes shall become effective on the same Business Day or, in the case of investment allocations received
after a time specified by the Committee, the next Business Day, and shall be applied prospectively.
| 7.5 | Unallocated
Deferrals and Accounts. If the Participant fails to make an investment allocation with
respect to an Account, such Account shall be invested in an investment option, the primary
objective of which is the preservation of capital, as determined by the Committee. |
| 7.6 | Company Stock.
Deferrals of stock units will be credited to a Participant’s Account in the designated
number of units with each unit equal in value to one share of common stock of the Company.
A Participant may not allocate units to another investment option under the Plan. A Participant
may not allocate cash Deferrals into units of Company stock. |
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PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
Dividend
equivalents payable with respect to vested deferred units will be credited as provided in the equity compensation plan under which such
deferred units were granted.
| 7.7 | Valuations
Final After 180 Days. The Participant shall have 180 days following the Valuation Date
on which the Participant failed to receive the full amount of Earnings and to file a claim
under Article XI for the correction of such error. |
Article VIII
Administration
| 8.1 | Plan Administration.
This Plan shall be administered by the Committee which shall have discretionary authority
to make, amend, interpret and enforce all appropriate rules and regulations for the
administration of this Plan and to utilize its discretion to decide or resolve any and all
questions, including but not limited to eligibility for benefits and interpretations of this
Plan and its terms, as may arise in connection with the Plan. Claims for benefits shall be
filed with the Committee and resolved in accordance with the claims procedures in Article XI. |
| 8.2 | Administration
Upon Change in Control. Upon a Change in Control, the Committee, as constituted immediately
prior to such Change in Control, shall continue to act as the Committee. The Committee, by
a vote of a majority of its members, shall have the authority (but shall not be obligated)
to appoint an independent third party to act as the Committee. |
Upon such Change in Control, the Company may not remove
the Committee or its members, unless a majority of Participants and Beneficiaries with Account Balances consent to the removal and replacement
of the Committee. Notwithstanding the foregoing, the Committee shall not have authority to direct investment of trust assets under any
rabbi trust described in Section 10.2.
The Participating Employers shall, with respect to the Committee
identified under this Section: (i) pay all reasonable expenses and fees of the Committee, (ii) indemnify the Committee (including
individuals serving as Committee members) against any costs, expenses and liabilities including, without limitation, attorneys’
fees and expenses arising in connection with the performance of the Committee’s duties hereunder, except with respect to matters
resulting from the Committee’s gross negligence or willful misconduct, and (iii) supply full and timely information to the
Committee on all matters related to the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Committee may reasonably
require.
| 8.3 | Withholding.
The Participating Employer shall have the right to withhold from any payment due under
the Plan (or with respect to any amounts credited to the Plan) any taxes required by law
to be withheld in respect of such payment (or credit). Withholdings with respect to amounts
credited to the Plan shall be deducted from Compensation that has not been deferred to the
Plan. |
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PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
| 8.4 | Indemnification.
The Participating Employers shall indemnify and hold harmless each employee, officer,
director, agent or organization, to whom or to which are delegated duties, responsibilities,
and authority under the Plan or otherwise with respect to administration of the Plan, including,
without limitation, the Committee, its delegees and its agents, against all claims, liabilities,
fines and penalties, and all expenses reasonably incurred by or imposed upon him or it (including
but not limited to reasonable attorney fees) which arise as a result of his or its actions
or failure to act in connection with the operation and administration of the Plan to the
extent lawfully allowable and to the extent that such claim, liability, fine, penalty, or
expense is not paid for by liability insurance purchased or paid for by the Participating
Employer. Notwithstanding the foregoing, the Participating Employer shall not indemnify any
person or organization if his or its actions or failure to act are due to gross negligence
or willful misconduct or for any such amount incurred through any settlement or compromise
of any action unless the Participating Employer consents in writing to such settlement or
compromise. |
| 8.5 | Delegation
of Authority. In the administration of this Plan, the Committee may, from time to time,
employ agents and delegate to them such administrative duties as it sees fit, and may from
time to time consult with legal counsel who shall be legal counsel to the Company. |
| 8.6 | Binding Decisions
or Actions. The decision or action of the Committee in respect of any question arising
out of or in connection with the administration, interpretation and application of the Plan
and the rules and regulations thereunder shall be final and conclusive and binding upon
all persons having any interest in the Plan. |
Article IX
Amendment and Termination
| 9.1 | Amendment
and Termination. The Company may at any time and from time to time amend the Plan or
may terminate the Plan as provided in this Article IX. |
| 9.2 | Amendments.
The Company, by action taken by its Board of Directors, may amend the Plan at any time
and for any reason, provided that any such amendment shall not reduce the vested Account
Balances of any Participant accrued as of the date of any such amendment or restatement (as
if the Participant had incurred a voluntary Separation from Service on such date). The Board
of Directors of the Company may delegate to the Committee the authority to amend the Plan
without the consent of the Board of Directors for the purpose of: (i) conforming the
Plan to the requirements of law; (ii) facilitating the administration of the Plan; (iii) clarifying
provisions based on the Committee’s interpretation of the Plan documents; and (iv) making
such other amendments as the Board of Directors may authorize. No amendment is needed to
revise the list of Participating Employers set forth on Schedule A attached hereto. |
| 9.3 | Termination.
The Company, by action taken by its Board of Directors, may terminate the Plan and pay
Participants and Beneficiaries their Account Balances in a single lump sum at any time, to
the extent and in accordance with Treas. Reg. Section 1.409A-3(j)(4)(ix). |
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PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
| 9.4 | Accounts
Taxable Under Code Section 409A. The Plan is intended to constitute a plan of deferred
compensation that meets the requirements for deferral of income taxation under Code Section 409A.
The Committee, pursuant to its authority to interpret the Plan, may sever from the Plan or
any Compensation Deferral Agreement any provision or exercise of a right that otherwise would
result in a violation of Code Section 409A. |
Article X
Informal Funding
| 10.1 | General
Assets. Obligations established under the terms of the Plan may be satisfied from the
general funds of the Participating Employers, or a trust described in this Article X.
No Participant, spouse or Beneficiary shall have any right, title or interest whatever in
assets of the Participating Employers. Nothing contained in this Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of any kind, or
a fiduciary relationship, between the Participating Employers and any Employee, spouse, or
Beneficiary. To the extent that any person acquires a right to receive payments hereunder,
such rights are no greater than the right of an unsecured general creditor of the Participating
Employer. |
| 10.2 | Rabbi Trust.
A Participating Employer may, in its sole discretion, establish a grantor trust, commonly
known as a rabbi trust, as a vehicle for accumulating assets to pay benefits under the Plan.
Payments under the Plan may be paid from the general assets of the Participating Employer
or from the assets of any such rabbi trust. Payment from any such source shall reduce the
obligation owed to the Participant or Beneficiary under the Plan. |
If a rabbi trust is in existence upon the occurrence of
a “change in control”, as defined in such trust, the Participating Employer shall, upon such change in control, and on each
anniversary of the change in control, contribute in cash or liquid securities such amounts as are necessary so that the value of assets
after making the contributions exceed 110% of the total value of all Account Balances.
Article XI
Claims
| 11.1 | Filing a
Claim. Any controversy or claim arising out of or relating to the Plan shall be filed
in writing with the Committee which shall make all determinations concerning such claim.
Any claim filed with the Committee and any decision by the Committee denying such claim shall
be in writing and shall be delivered to the Participant or Beneficiary filing the claim (the
“Claimant”). Notice of a claim for payments shall be delivered to the Committee
within 90 days of the latest date upon which the payment could have been timely made in accordance
with the terms of the Plan and Code Section 409A, and if not paid, the Participant or
Beneficiary must file a claim under this Article XI not later than 180 days after such
latest date. If the Participant or Beneficiary fails to file a timely claim, the Participant
forfeits any amounts to which he or she may have been entitled to receive under the claim. |
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PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
| (a) | In General.
Notice of a denial of benefits will be provided within 90 days of the Committee’s
receipt of the Claimant's claim for benefits. If the Committee determines that it needs additional
time to review the claim, the Committee will provide the Claimant with notice of the extension
before the end of the initial 90-day period. The extension will not be more than 90 days
from the end of the initial 90-day period and the notice of extension will explain the special
circumstances that require the extension and the date by which the Committee expects to make
a decision. |
| (b) | Contents
of Notice. If a claim for benefits is completely or partially denied, notice of such
denial shall be in writing. Any electronic notification shall comply with the standards imposed
by Department of Labor Regulation 29 CFR 2520.104b-1(c)(1)(i), (iii), and (iv). The notice
of denial shall set forth the specific reasons for denial in plain language. The notice shall:
(i) cite the pertinent provisions of the Plan document, and (ii) explain, where
appropriate, how the Claimant can perfect the claim, including a description of any additional
material or information necessary to complete the claim and why such material or information
is necessary. The claim denial also shall include an explanation of the claims review procedures
and the time limits applicable to such procedures, including the right to appeal the decision,
the deadline by which such appeal must be filed and a statement of the Claimant’s right
to bring a civil action under Section 502(a) of ERISA following an adverse decision
on appeal and the specific date by which such a civil action must commence under Section 11.4. |
In
the case of a complete or partial denial of a disability benefit claim, the notice shall provide such information and shall be communicated
in the manner required under applicable Department of Labor regulations.
| 11.2 | Appeal of
Denied Claims. A Claimant whose claim has been completely or partially denied shall be
entitled to appeal the claim denial by filing a written appeal with a committee designated
to hear such appeals (the “Appeals Committee”). A Claimant who timely requests
a review of the denied claim (or their authorized representative) may review, upon request
and free of charge, copies of all documents, records and other information relevant to the
denial and may submit written comments, documents, records and other information relating
to the claim to the Appeals Committee. All written comments, documents, records, and other
information shall be considered “relevant” if the information: (i) was relied
upon in making a benefits determination, (ii) was submitted, considered or generated
in the course of making a benefits decision regardless of whether it was relied upon to make
the decision, or (iii) demonstrates compliance with administrative processes and safeguards
established for making benefit decisions. The review shall consider all comments, documents,
records, and other information submitted by the Claimant relating to the claim, without regard
to whether such information was submitted or considered in the initial benefit determination.
The Appeals Committee may, in its sole discretion and if it deems appropriate or necessary,
decide to hold a hearing with respect to the claim appeal. |
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PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
| (a) | In General.
Appeal of a denied benefits claim must be filed in writing with the Appeals Committee
no later than 60 days after receipt of the written notification of such claim denial. The
Appeals Committee shall make its decision regarding the merits of the denied claim within
60 days following receipt of the appeal (or within 120 days after such receipt, in a case
where there are special circumstances requiring extension of time for reviewing the appealed
claim). If an extension of time for reviewing the appeal is required because of special circumstances,
written notice of the extension shall be furnished to the Claimant prior to the commencement
of the extension. The notice will indicate the special circumstances requiring the extension
of time and the date by which the Appeals Committee expects to render the determination on
review. The review will consider comments, documents, records and other information submitted
by the Claimant relating to the claim without regard to whether such information was submitted
or considered in the initial benefit determination. |
| (b) | Contents
of Notice. If a benefits claim is completely or partially denied on review, notice of
such denial shall be in writing. Any electronic notification shall comply with the standards
imposed by Department of Labor Regulation 29 CFR 2520.104b-1(c)(1)(i), (iii), and (iv). Such
notice shall set forth the reasons for denial in plain language. |
The decision on review shall set forth: (i) the specific
reason or reasons for the denial, (ii) specific references to the pertinent Plan provisions on which the denial is based, (iii) a
statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents,
records, or other information relevant (as defined above) to the Claimant’s claim, and (iv) a statement of the Claimant’s
right to bring an action under Section 502(a) of ERISA, following an adverse decision on review and the specific date by which
such a civil action must commence under Section 11.4.
For the denial of a disability benefit, the notice will also
include such additional information and be communicated in the manner required under applicable Department of Labor regulations.
| 11.3 | Claims Appeals
Upon Change in Control. Upon a change in control, the Appeals Committee, as constituted
immediately prior to such change in control, shall continue to act as the Appeals Committee.
The Company may not remove any member of the Appeals Committee but may replace resigning
members if 2/3rds of the members of the Board of Directors of the Company and a majority
of Participants and Beneficiaries with Account Balances consent to the replacement. |
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PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
The Appeals Committee shall have the exclusive authority
at the appeals stage to interpret the terms of the Plan and resolve appeals under the Claims Procedure.
Each Participating Employer shall, with respect to the Committee
identified under this Section: (i) pay its proportionate share of all reasonable expenses and fees of the Appeals Committee, (ii) indemnify
the Appeals Committee (including individual committee members) against any costs, expenses and liabilities including, without limitation,
attorneys’ fees and expenses arising in connection with the performance of the Appeals Committee hereunder, except with respect
to matters resulting from the Appeals Committee’s gross negligence or willful misconduct, and (iii) supply full and timely
information to the Appeals Committee on all matters related to the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as
the Appeals Committee may reasonably require.
| 11.4 | Legal Action.
A Claimant may not bring any legal action, including commencement of any arbitration,
relating to a claim for benefits under the Plan unless and until the Claimant has followed
the claims procedures under the Plan and exhausted his or administrative remedies under Sections
11.1 and 11.2. No such legal action may be brought more than twelve (12) months following
the notice of denial of benefits under Section 11.2, or if no appeal is filed by the
applicable appeals deadline, twelve (12) months following the appeals deadline. |
If a Participant or Beneficiary prevails in a legal proceeding
brought under the Plan to enforce the rights of such Participant or any other similarly situated Participant or Beneficiary, in whole
or in part, the Participating Employer shall reimburse such Participant or Beneficiary for all legal costs, expenses, attorneys’
fees and such other liabilities incurred as a result of such proceedings. If the legal proceeding is brought in connection with a change
in control (including a “change in control” as defined in a rabbi trust described in Section 10.2) the Participant or
Beneficiary may file a claim directly with the trustee for reimbursement of such costs, expenses and fees. For purposes of the preceding
sentence, the amount of the claim shall be treated as if it were an addition to the Participant’s or Beneficiary’s Account
Balance and will be included in determining the Participating Employer’s trust funding obligation under Section 10.2.
| 11.5 | Discretion
of Appeals Committee. All interpretations, determinations and decisions of the Appeals
Committee with respect to any claim shall be made in its sole discretion and shall be final
and conclusive. |
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PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
| (a) | Prior
to Change in Control. If, prior to a change in control, any claim or controversy between
a Participating Employer and a Participant or Beneficiary is not resolved through the claims
procedure set forth in Article XI, such claim shall be submitted to and resolved exclusively
by expedited binding arbitration by a single arbitrator. Arbitration shall be conducted in
accordance with the following procedures: |
The complaining party shall promptly send written notice to
the other party identifying the matter in dispute and the proposed remedy. Following the giving of such notice, the parties shall meet
and attempt in good faith to resolve the matter. In the event the parties are unable to resolve the matter within 21 days, the parties
shall meet and attempt in good faith to select a single arbitrator acceptable to both parties. If a single arbitrator is not selected
by mutual consent within ten Business Days following the giving of the written notice of dispute, an arbitrator shall be selected from
a list of nine persons each of whom shall be an attorney who is either engaged in the active practice of law or recognized arbitrator
and who, in either event, is experienced in serving as an arbitrator in disputes between employers and employees, which list shall be
provided by the main office of either JAMS, the American Arbitration Association (“AAA”) or the Federal Mediation and Conciliation
Service. If, within three Business Days of the parties’ receipt of such list, the parties are unable to agree on an arbitrator
from the list, then the parties shall each strike names alternatively from the list, with the first to strike being determined by the
flip of a coin. After each party has had four strikes, the remaining name on the list shall be the arbitrator. If such person is unable
to serve for any reason, the parties shall repeat this process until an arbitrator is selected.
Unless the parties agree otherwise, within 60 days of the
selection of the arbitrator, a hearing shall be conducted before such arbitrator at a time and a place agreed upon by the parties. In
the event the parties are unable to agree upon the time or place of the arbitration, the time and place shall be designated by the arbitrator
after consultation with the parties. Within 30 days of the conclusion of the arbitration hearing, the arbitrator shall issue an award,
accompanied by a written decision explaining the basis for the arbitrator’s award.
In any arbitration hereunder, the Participating Employer shall
pay all administrative fees of the arbitration and all fees of the arbitrator, except that the Participant or Beneficiary may, if he/she/it
wishes, pay up to one-half of those amounts. Each party shall pay its own attorneys’ fees, costs, and expenses, unless the arbitrator
orders otherwise. The prevailing party in such arbitration, as determined by the arbitrator, and in any enforcement or other court proceedings,
shall be entitled, to the extent permitted by law, to reimbursement from the other party for all of the prevailing party’s costs
(including but not limited to the arbitrator’s compensation), expenses, and attorneys’ fees. The arbitrator shall have no
authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority
than would a court of law resolving the same claim or controversy. The arbitrator shall, upon an appropriate motion, dismiss any claim
without an evidentiary hearing if the party bringing the motion establishes that it would be entitled to summary judgment if the matter
had been pursued in court litigation.
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PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
The parties shall be entitled to discovery as follows: Each
party may take no more than three depositions. The Participating Employer may depose the Participant or Beneficiary plus two other witnesses,
and the Participant or Beneficiary may depose the Participating Employer, pursuant to Rule 30(b)(6) of the Federal Rules of
Civil Procedure, plus two other witnesses. Each party may make such reasonable document discovery requests as are allowed in the discretion
of the arbitrator.
The decision of the arbitrator shall be final, binding, and
non-appealable, and may be enforced as a final judgment in any court of competent jurisdiction.
This arbitration provision of the Plan shall extend to claims
against any parent, subsidiary, or affiliate of each party, and, when acting within such capacity, any officer, director, shareholder,
Participant, Beneficiary, or agent of any party, or of any of the above, and shall apply as well to claims arising out of state and federal
statutes and local ordinances as well as to claims arising under the common law or under this Plan.
Notwithstanding the foregoing, and unless otherwise agreed
between the parties, either party may apply to a court for provisional relief, including a temporary restraining order or preliminary
injunction, on the ground that the arbitration award to which the applicant may be entitled may be rendered ineffectual without provisional
relief.
Any arbitration hereunder shall be conducted in accordance
with the Federal Arbitration Act: provided, however, that, in the event of any inconsistency between the rules and procedures of
the Act and the terms of this Plan, the terms of this Plan shall prevail.
If any of the provisions of this Section 11.6(a) are
determined to be unlawful or otherwise unenforceable, in the whole part, such determination shall not affect the validity of the remainder
of this section and this section shall be reformed to the extent necessary to carry out its provisions to the greatest extent possible
and to insure that the resolution of all conflicts between the parties, including those arising out of statutory claims, shall be resolved
by neutral, binding arbitration. If a court should find that the provisions of this Section 11.6(a) are not absolutely binding,
then the parties intend any arbitration decision and award to be fully admissible in evidence in any subsequent action, given great weight
by any finder of fact and treated as determinative to the maximum extent permitted by law.
The parties do not agree to arbitrate any putative class action
or any other representative action. The parties agree to arbitrate only the claims(s) of a single Participant or Beneficiary.
| (b) | Upon
Change in Control. Upon a change in control, Section 11.6(a) shall not apply,
and any legal action initiated by a Participant or Beneficiary to enforce their rights under
the Plan may be brought in any court of competent jurisdiction. Notwithstanding the Appeals
Committee’s discretion under Sections 11.3 and 11.5, the court shall apply a de novo
standard of review to any prior claims decision under Sections 11.1 through 11.3 or any other
determination made by the Company, its Board of Directors, a Participating Employer, the
Committee, or the Appeals Committee. |
| Content Copyright ©2024 Newport Group, Inc. All Rights Reserved. | |
| | |
| | Page 24 of 28 |
PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
Article XII
General Provisions
| 12.1 | Assignment.
No interest of any Participant, spouse or Beneficiary under this Plan and no benefit
payable hereunder shall be assigned as security for a loan, and any such purported assignment
shall be null, void and of no effect, nor shall any such interest or any such benefit be
subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer,
assignment or encumbrance by or through any Participant, spouse or Beneficiary. Notwithstanding
anything to the contrary herein, however, the Committee has the discretion to make payments
to an alternate payee in accordance with the terms of a domestic relations order (as defined
in Code Section 414(p)(1)(B)). |
The Company may assign any or all of its liabilities under
this Plan in connection with any restructuring, recapitalization, sale of assets or other similar transactions affecting a Participating
Employer without the consent of the Participant.
| 12.2 | No Legal
or Equitable Rights or Interest. No Participant or other person shall have any legal
or equitable rights or interest in this Plan that are not expressly granted in this Plan.
Participation in this Plan does not give any person any right to be retained in the service
of the Participating Employer. The right and power of a Participating Employer to dismiss
or discharge an Employee is expressly reserved. The Participating Employers make no representations
or warranties as to the tax consequences to a Participant or a Participant’s beneficiaries
resulting from a deferral of income pursuant to the Plan. |
| 12.3 | No Employment
Contract. Nothing contained herein shall be construed to constitute a contract of employment
between an Employee and a Participating Employer. Nothing contained herein shall be construed
as changing a Participant’s status from employee to independent contractor or from
independent contractor to employee. |
| 12.4 | Notice.
Any notice or filing required or permitted to be delivered to the Committee under this
Plan shall be delivered in writing, in person, or through such electronic means as is established
by the Committee. Notice shall be deemed given as of the date of delivery or, if delivery
is made by mail, as of the date shown on the postmark on the receipt for registration or
certification. Written transmission shall be sent by certified mail to: |
PENNYMAC FINANCIAL SERVICES, INC.
3043 TOWNSGATE ROAD
WESTLAKE VILLAGE, CALIFORNIA 91361
ATTN: HUMAN RESOURCES
| Content Copyright ©2024 Newport Group, Inc. All Rights Reserved. | |
| | |
| | Page 25 of 28 |
PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
Any notice or filing required or permitted to be given to
a Participant under this Plan shall be sufficient if in writing or hand-delivered or sent by mail to the last known address of the Participant.
| 12.5 | Headings.
The headings of Sections are included solely for convenience of reference, and if there
is any conflict between such headings and the text of this Plan, the text shall control. |
| 12.6 | Invalid
or Unenforceable Provisions. If any provision of this Plan shall be held invalid or unenforceable,
such invalidity or unenforceability shall not affect any other provisions hereof and the
Committee may elect in its sole discretion to construe such invalid or unenforceable provisions
in a manner that conforms to applicable law or as if such provisions, to the extent invalid
or unenforceable, had not been included. |
| 12.7 | Lost Participants
or Beneficiaries. Any Participant or Beneficiary who is entitled to a benefit from the
Plan has the duty to keep the Committee advised of their current mailing address. If benefit
payments are returned to the Plan or are not presented for payment after a reasonable amount
of time, the Committee shall presume that the payee is missing. The Committee, after making
such efforts as in its discretion it deems reasonable and appropriate to locate the payee,
shall stop payment on any uncashed checks and may discontinue making future payments until
contact with the payee is restored. If the Committee is unable to locate the Participant
or Beneficiary after five years of the date payment is scheduled to be made, the Participant’s
Account will be forfeited, provided that a Participant’s Account shall not be credited
with Earnings following the first anniversary of such date on which payment is to be made
and further provided, however, that such benefit shall be reinstated, without further adjustment
for interest, if a valid claim is made by or on behalf of the Participant or Beneficiary
for all or part of the forfeited benefit. |
| 12.8 | Facility
of Payment to a Minor. If a distribution is to be made to a minor, or to a person who
is otherwise incompetent, then the Committee may, in its discretion, make such distribution:
(i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee
maintains their residence, or (ii) to the conservator or committee or, if none, to the
person having custody of an incompetent payee. Any such distribution shall fully discharge
the Committee, the Company, and the Plan from further liability on account thereof. |
| 12.9 | Governing
Law. To the extent not preempted by ERISA, the laws of the State of New York shall govern
the construction and administration of the Plan. |
| 12.10 | Compliance
With Code Section 409A; No Guarantee. This Plan is intended to be administered in
compliance with Code Section 409A and each provision of the Plan shall be interpreted
consistent with Code Section 409A. Although intended to comply with Code Section 409A,
this Plan shall not constitute a guarantee to any Participant or Beneficiary that the Plan
in form or in operation will result in the deferral of federal or state income tax liabilities
or that the Participant or Beneficiary will not be subject to the additional taxes imposed
under Section 409A. No Employer shall have any legal obligation to a Participant with
respect to taxes imposed under Code Section 409A. |
| Content Copyright ©2024 Newport Group, Inc. All Rights Reserved. | |
| | |
| | Page 26 of 28 |
PennyMac Financial Services, Inc. Executive Deferred Compensation
Plan
| 12.11 | Clawback
Acknowledgement. As a condition to participation in this Plan, the Participant acknowledges
that the Participant may become subject to the PennyMac Financial Services, Inc. Compensation
Recovery Policy adopted pursuant to Rule 10D-1 promulgated under the Securities Exchange
Act of 1934 and the New York Stock Exchange, or any successor rule (the “Clawback
Policy”). The Participant understands that if the Participant is or becomes subject
to the Clawback Policy, the Company and/or the Board shall be entitled to recover all Erroneously
Awarded Compensation (as defined in the Clawback Policy) from the Participant pursuant to
such means as the Company and/or the Board may elect. The Participant agrees that the Participant
shall take all required action to enable such recovery. The Participant understands that
such recovery may be sought and occur after the Participant’s employment or service
with the Company terminates. The Participant further agrees that the Participant is not entitled
to indemnification for any Erroneously Awarded Compensation or for any claim or losses arising
out of or in any way related to Erroneously Awarded Compensation recovered pursuant to the
Clawback Policy and, to the extent any agreement or organizational document purports to provide
otherwise, the Participant hereby irrevocably agrees to forego such indemnification. The
Participant acknowledges and agrees that the Participant has received and has had an opportunity
to review the Clawback Policy. Any action by the Company to recover Erroneously Awarded Compensation
under the Clawback Policy from the Participant shall not, whether alone or in combination
with any other action, event or condition, be deemed (i) a good reason condition or
serve as a basis for a claim of constructive termination under any benefits or compensation
arrangement applicable to the Participant, or (ii) to constitute a breach of a contract
or other arrangement to which the Participant is a party. This Section 12.11 is a material
term of this Plan. |
IN WITNESS WHEREOF, the undersigned executed this Plan as of the
fourth day of June, 2024, to be effective as of the Effective Date.
| PENNYMAC FINANCIAL SERVICES, INC. |
|
| |
|
| By: Jenny Rhodes |
|
| Its: Senior Managing Director, Chief Human Resources Officer |
|
| |
|
| /s/ Jenny Rhodes |
|
| Content Copyright ©2024 Newport Group, Inc. All Rights Reserved. | |
| | |
| | Page 27 of 28 |
PennyMac Financial Services, Inc.
Executive Deferred Compensation Plan
Schedule A
Participating Employers
PennyMac Financial Services, Inc.
PNMAC Holdings, Inc.
Private National Mortgage Acceptance Company, LLC
PNMAC Capital Management, LLC
PennyMac Loan Services, LLC
PennyMac Services, Inc.
| Content Copyright ©2024 Newport Group, Inc. All Rights Reserved. | |
| | |
| | Page 28 of 28 |
Exhibit 107
Calculation of Filing Fee Table
Form S-8
(Form Type)
PennyMac Financial Services, Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered Securities
Security
Type |
Security
Class
Title |
Fee
Calculation
Rule |
Amount
Registered(2) |
Proposed
Maximum
Offering
Price Per
Unit |
Maximum
Aggregate
Offering
Price(2) |
Fee Rate |
Amount of
Registration
Fee |
| Other |
Deferred Compensation Obligations (1) |
Rule 457(h) |
$150,000,000 |
100% |
$150,000,000 |
$0.00014760 |
$22,140 |
| Total Offering Amounts |
|
$150,000,000 |
|
$22,140 |
| Total Fee Offsets |
|
|
|
---------- |
| Net Fee Due |
|
|
|
$22,140 |
| |
(1) |
The deferred compensation obligations are unsecured obligations of PennyMac Financial Services, Inc. (the “Registrant”) to pay up to $150 million of deferred compensation in the future in accordance with the terms of the PennyMac Financial Services, Inc. Executive Deferred Compensation Plan (the “Plan”). |
| |
(2) |
The amount of Deferred Compensation Obligations registered is based on an estimate of the amount of compensation participants may defer under the Plan and is estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(h) of the Securities Act of 1933, as amended. |
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