Exhibit 10.4

 

PENNYMAC FINANCIAL SERVICES, INC.

2013 EQUITY INCENTIVE PLAN

 

FORM OF STOCK OPTION AWARD AGREEMENT

 

THIS AGREEMENT is dated as of ________, between PennyMac Financial Services,
Inc., a corporation organized under the laws of the State of Delaware (the
“Company”), and the individual identified in Section 1 below (the “Recipient”).

 

1.       Grant of Option.  Pursuant and subject to the Company's 2013 Equity
Incentive Plan (as the same may be amended from time to time, the “Plan”), the
Company grants to you, the Recipient identified in the table below, an option
(this “Option”) to purchase from the Company all or any part of a total of the
number of  shares identified in the table below (the “Optioned Shares”) of the
Class A Common Stock, par value $0.0001 per share, in the Company (the “Stock”),
at the exercise price per share set out in the table below.

 

Recipient

 

 

 

 

 

Number of Optioned Shares

 

 

 

 

 

Exercise Price Per Share

 

 

 

 

 

Grant Date

 

 

 

 

 

Vesting Commencement Date

 

 

 

 

 

Expiration Date

 

 

 

2.       Character of Option.  This Option is not intended to be treated as an
“incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.

 

3.       Expiration of Option.  This Option shall expire at 5:00 p.m. PDT on the
Expiration Date or, if earlier, the earliest of the dates specified in whichever
of the following applies:

 

(a)       If the termination of your employment or other association is on
account of your death or Disability (as defined below in Section 4), the first
anniversary of the date your employment ends.

 

(b)       If the termination of your employment or other association is due to
any reason other than death, Disability, Retirement (as defined below in Section
4) or termination for cause, three (3) months after your employment or other
association ends.

 

(c)       If the Company terminates your employment or other association for
cause, or at the termination of your employment or other association the Company
had grounds to terminate your employment or other association for cause (whether
then or thereafter determined), immediately upon the termination of your
employment or other association.

--------------------------------------------------------------------------------

 

4.       Vesting of Option; Retirement, Death and Disability.

 

(a)        Until this Option expires, you may exercise it as to the number of
Optioned Shares which have vested (“Vested Shares”), in full or in part, at any
time on or after the applicable exercise date or dates identified in the
remainder of this Section.  However, during any period that this Option remains
outstanding after your employment or other association with the Company and its
Affiliates ends other than by reason of Retirement, you may exercise it only as
to Optioned Shares which are Vested Shares immediately prior to the end of your
employment or other association.  The procedure for exercising this Option is
described in Section 7.1(e) of the Plan.

 

(b)        One-third (1/3) of the Optioned Shares shall become Vested Shares on
each of the first, second, and third anniversaries of the Vesting Commencement
Date specified above, with any fractions rounded down except on the final
installment.

 

(c)        If your employment or other association with the Company is
terminated due to Retirement (as defined below) and the Company does not have
grounds to terminate your employment or other association for cause, and
provided you have executed and continue to comply with the terms of an agreement
not to provide services as an employee, director, consultant, agent, or
otherwise, to any of the Company’s direct competitors for a period of two (2)
years from the date of your Retirement Date (the “Retirement Date”), then the
Optioned Shares shall continue to become Vested Shares after the Retirement Date
in accordance with the original terms of this Option; provided, however, that
(i) if the Retirement Date occurs during the nine-month period immediately
following the Grant Date, then this Option shall be forfeited; and (ii) if the
Retirement Date occurs during the three-month period prior to the first
anniversary of the Grant Date, then one-third of the Optioned Shares shall vest
on the first anniversary of the Grant Date (pro-rated based on (A) the number of
full months of the Recipient’s employment from the Grant Date through the
Retirement Date divided by (B) twelve (12)) and the remaining Optioned Shares
shall be forfeited.  “Retirement” shall mean voluntary termination of employment
after the age of sixty (60) with at least ten (10) years of combined service to
the Company and/or any of its subsidiaries; provided, however, that if you elect
to terminate your employment in connection with a Retirement, you must provide
the Company with a minimum of (x) six (6) months prior written notice of such
Retirement if your title is at the senior vice president level and above, or (y)
three (3) months prior written notice of such Retirement if your title is at the
first vice president level and below.

 

(d)        Notwithstanding anything to the contrary in Section 3 above, if your
employment or other association with the Company is terminated due to any other
reason, including death or Disability, then this Option shall be forfeited as to
any unvested Optioned Shares as of the date of such termination. “Disability”
shall mean the inability to engage in any substantial gainful occupation to
which the relevant individual is suited by education, training or experience, by
reason of any medically determinable physical or mental impairment, which
condition can be expected to result in death or otherwise continue for a period
of not less than twelve (12) consecutive months.

 

5.       Transfer of Option.  You may not transfer this Option except by will or
the laws of descent and distribution, and, during your lifetime, only you may
exercise this Option.

--------------------------------------------------------------------------------

 

6.       Community Property.  To the extent the you reside in a jurisdiction in
which community property rules apply, without prejudice to the actual rights of
the spouses as between each other, for all purposes of this Agreement, you shall
be treated as agent and attorney-in-fact for that interest held or claimed by
your spouse with respect to this Option and any Optioned Shares and the parties
hereto shall act in all matters as if the Recipient was the sole owner of this
Option and (following exercise) any such Optioned Shares.  This appointment is
coupled with an interest and is irrevocable.

 

7.       Incorporation of Plan Terms.  This Option is granted subject to all of
the applicable terms and provisions of the Plan, including but not limited to
the limitations on the Company's obligation to deliver Optioned Shares upon
exercise set forth in Section 10 (Settlement of Awards).

 

8.       Miscellaneous.  This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, without regard to the
conflict of laws principles thereof and shall be binding upon and inure to the
benefit of any successor or assign of the Company and any executor,
administrator, trustee, guardian, or other legal representative of
you.  Capitalized terms used but not defined herein shall have the meaning
assigned under the Plan.  The parties agree to execute such further instruments
and to take such action as may reasonably be necessary to carry out the intent
of this Agreement.  This Agreement, including the Plan, constitute the entire
agreement of the parties with respect to the subject matter hereof.  This
Agreement may be executed in any number of counterparts, each of which shall be
an original and all of which, taken together, shall constitute one and the same
instrument.  In making proof of this Agreement it shall not be necessary to
produce or account for more than one such counterpart.  You acknowledge that you
have reviewed and understand the Plan and this Agreement in their entirety, and
have had an opportunity to obtain the advice of counsel prior to executing this
Agreement.  You hereby agree to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions arising
under the Plan or this Agreement.

--------------------------------------------------------------------------------

 

 

9.       Tax Consequences.  The Company makes no representation or warranty as
to the tax treatment to you of your receipt or exercise of this Option or upon
your sale or other disposition of the Optioned Shares.  You should rely on your
own tax advisors for such advice.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the date first above written.

 

PENNYMAC FINANCIAL SERVICES, INC.

 

 

--------------------------------------------------------------------------------