Exhibit 10.2

 

PENNYMAC FINANCIAL SERVICES, INC.

2013 EQUITY INCENTIVE PLAN

FORM OF RESTRICTED STOCK UNIT SUBJECT TO PERFORMANCE COMPONENTS

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 the table below (the “Recipient”).

Recipient

 

 

 

Grant Date

 

 

 

Number of RSUs Subject to Performance Components

 

 

 

Performance Period

 

 

1.         Grant of Restricted Stock Units.  Subject to the terms and conditions
of this Award Agreement and the Company’s 2013 Equity Incentive Plan, as the
same may be amended, modified, supplemented or interpreted from time to time
(the “Plan”), including without limitation the vesting provisions set forth in
Section 2, the Company hereby grants to the Recipient, with effect as of the
Grant Date specified above, the above indicated number of restricted stock units
(the “RSUs”) to obtain for each RSU that is subject to vesting based on the
satisfaction of performance components, one fully paid and nonassessable share
of Class A Common Stock, par value $0.0001 per share, in the Company (the
“Stock”) if (a) the Variance to Target is 0% for performance component 1, and
(b) the Rating is [    ] for performance component 2, all as set forth on
Exhibit A attached hereto, or such greater number (up to a maximum of [     ]
shares of Stock) or lesser number as is obtained by applying the sliding scale
percentage factors that are to be applied to the various performance components
as set forth on such Exhibit A.

 

2.         Vesting and Settlement.

 

2.1      The RSUs subject to vesting based on satisfaction of performance
components are subject to cumulative achievement of goals based on the following
performance components: (1) the Pre-Tax Return on Equity of Private National
Acceptance Company, LLC (“PNMAC”), and (2) the Recipient’s Individual
Effectiveness, in the amounts and each as further described in Exhibit A
attached hereto.  The RSUs subject to vesting based on satisfaction of
performance components shall vest in a lump sum on the date the Committee
determines that the goals based on the performance components have been
satisfied, subject to the Recipient’s continued service through such date.  The
Recipient’s satisfaction of goals based on performance components shall be
determined by the Committee in its sole discretion.  The shares of Stock earned
as such RSUs vest will be transferred or issued to the Recipient (or his or her
estate, in the event of his or her death) promptly after they vest, but in any
event not later than the 15th day of the third month following the end of the
calendar year in which such RSUs become vested.  Notwithstanding anything to the
contrary in this Agreement, if any settlement of RSUs would otherwise result in
the issuance of a fractional share to the Recipient after aggregating all shares

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and fractional shares to be issued to the Recipient in connection with such
settlement, then any such final fractional share shall be eliminated and the
Company shall pay to the Recipient, in lieu thereof, cash in an amount equal to
(i) the average closing price of a share of Stock during the 10 most recent
trading days prior to the date of issuance of the other shares issued in
settlement of such RSU, multiplied by (ii) such fractional amount.

 

2.2      Until the RSUs vest and are issued pursuant to the terms of this Award
Agreement, the Recipient shall have no rights as a stockholder, such as the
right to vote or to receive dividends in respect of the Stock covered by this
Award.

 

2.3      The Recipient’s name shall be entered as the stockholder of record on
the books and records of the transfer agent for the Company with respect to the
Stock issuable pursuant to Section 2.1 only upon compliance to the satisfaction
of the Committee with all requirements under applicable laws or regulations in
connection with such issuance and with the requirements of this Agreement and of
the Plan.  The determination of the Committee as to such compliance shall be
final and binding on the Recipient.  Notwithstanding anything to the contrary in
this Agreement, no Stock shall be issued in settlement of vested RSUs if the
issuance of such shares would constitute a violation of any applicable federal
or state securities law or other law or regulation.  As a condition to the
issuance of Stock to the Recipient pursuant to Section 2.1, the Company may
require the Recipient to make any representation or warranty to the Company at
the time vested Stock becomes issuable to the Recipient as in the opinion of
legal counsel for the Company may be required by any applicable law or
regulation, including the execution and delivery of an appropriate
representation statement.  Accordingly, the stock certificates for the Stock
issued pursuant to this Award may bear appropriate legends restricting the
transfer of the Stock.

 

3.         Effect of Termination.   Unless otherwise expressly provided herein,
no RSUs shall vest following the date (the Recipient’s “Termination Date”),
reasonably fixed and determined by the Committee, of the voluntary or
involuntary termination of the Recipient’s employment or other association with
all of the Company and its Affiliates, for any or no reason whatsoever;
provided, however, that military or sick leave shall not be deemed a termination
of employment or other association, if it does not exceed the longer of 90 days
or the period during which the Recipient’s reemployment rights, if any, are
guaranteed by statute or by contract.  As of the Recipient’s Termination Date,
unless otherwise expressly provided herein, all of the then unvested RSUs shall
be forfeited by the Recipient or any transferee.

 

3.1      Termination of Employment Due to Retirement. Prior to the vesting and
settlement of the RSUs, (i) if the Recipient’s employment or other association
with the Company is terminated due to Retirement (as defined below) and the
Company does not have grounds to terminate Recipient’s employment or other
association with the Company for cause, and (ii) provided the Recipient has
executed and continues 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
Retirement (the “Retirement Date”), then the Recipient’s RSUs shall continue to
vest after the date of Retirement Date in accordance with the original terms of
such RSUs. Notwithstanding the foregoing, (i) if the Retirement Date occurs
during the nine-month period immediately following the Grant Date, then all of
the RSUs 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 the
Recipient shall be eligible to earn a number of shares of Stock in the manner
and as provided in

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Section 2 above (pro-rated based on (A) the number of full months of the
Recipient’s employment from the beginning of the performance period through the
Retirement Date divided by (B) the total number of months in the performance
period) and the remaining RSUs 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 the Recipient elects to terminate
employment in connection with a Retirement, the Recipient must provide the
Company with a minimum of (x) six (6) months prior written notice of such
Retirement if such Recipient’s title is at the senior vice president level and
above, or (y) three (3) months prior written notice of such Retirement if such
Recipient’s title is at the first vice president level and below.

 

3.2      Termination of Employment Due to Death. If, prior to vesting and
settlement of the RSUs, the Recipient’s employment or other association with the
Company is terminated due to his/her death and the Company does not have grounds
to terminate Recipient’s employment or other association with the Company for
cause, then the Recipient’s RSUs shall vest and be settled in a number of shares
of Stock based on the Company’s cumulative performance achievement during the
performance period and through the most recent fiscal quarter end and not to
exceed 100% payout if such termination due to death occurs prior to the end of
the performance period (pro-rated based on (A) the number of full months of the
Recipient’s employment from the beginning of the performance period through the
date of termination due to death divided by (B) the total number of months in
the performance period); provided, however, that if the Recipient’s termination
due to death occurs during the one-month period following the Grant Date, the
RSUs shall be forfeited.

 

3.3      Termination of Employment Due to Disability. If, prior to vesting and
settlement of the RSUs, the Recipient’s employment or other association with the
Company is terminated due to his/her Disability (as defined below) and the
Company does not have grounds to terminate Recipient’s employment or other
association with the Company for cause, then the Recipient’s RSUs shall vest and
be settled in the manner and as provided in Section 2 with achievement not to
exceed 100% payout if such termination due to Disability occurs prior to the end
of the performance period (pro-rated based on (A) the number of full months of
the Recipient’s employment from the beginning of the performance period through
the date of termination due to Disability divided by (B) the total number of
months in the performance period) and the remaining RSUs shall be forfeited;
provided, however, that if the Recipient’s termination due to Disability occurs
during the one-month period following the Grant Date, all of the RSUs shall be
forfeited. “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.

 

4.         Restrictions on Transfer.  The RSUs may not be assigned or
transferred (by operation of law or otherwise) except by will or the laws of
descent and distribution.

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5.         Miscellaneous.

 

5.1      No Special Service Rights.  Nothing contained in this Award Agreement
shall confer upon the Recipient any right with respect to the continuation of
his or her employment or other association with the Company (or any Affiliate),
or interfere in any way with the right of the Company (or any Affiliate),
subject to the terms of any separate employment or consulting agreement or
provision of law or corporate articles or by-laws to the contrary, at any time
to terminate such employment or consulting agreement or to increase or decrease,
or otherwise adjust, the other terms and conditions of the Recipient’s
employment or other association with the Company and its Affiliates.

 

5.2      Entire Agreement; Counterparts.  This Award Agreement, including the
Plan, constitute the entire agreement of the parties with respect to the subject
matter hereof.  This Award 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
Award Agreement it shall not be necessary to produce or account for more than
one such counterpart.

 

5.3      Tax Consequences.   The Company makes no representation or warranty as
to the tax treatment to the Recipient of receipt of these RSUs, and does not
warrant to the Recipient that all compensation paid or delivered to him or her
for his or her services will be exempt from, or paid in compliance with, Section
409A of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated thereunder.  The Recipient should rely on his or her own
tax advisors for all such advice.

 

5.4      Community Property.  To the extent the Recipient resides 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
Award Agreement, the Recipient shall be treated as agent and attorney-in-fact
for that interest held or claimed by the Recipient’s spouse with respect to
these RSUs and the parties hereto shall act in all matters as if the Recipient
was the sole owner of these RSUs.  This appointment is coupled with an interest
and is irrevocable.

 

6.         Receipt of Plan.  The RSUs were awarded under the Plan, to which this
Award Agreement is subject in all respects, including without limitation the
adjustment and tax withholding provisions therein.  All capitalized terms used
in this Award Agreement and not otherwise defined shall have the meanings
ascribed thereto in the Plan. The Recipient has reviewed and understands the
Plan and this Award Agreement in their entirety, and has had an opportunity to
obtain the advice of counsel prior to executing this Award Agreement.  The
Recipient hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions arising under the
Plan or this Award Agreement.

 

IN WITNESS WHEREOF, the Recipient and the Company have entered into this Award
Agreement as of the Grant Date.

 

PENNYMAC FINANCIAL SERVICES, INC.

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EXHIBIT A

PFSI Equity Incentive Plan Performance Objectives [Year] – [Chiefs /Non Chiefs]

 

Award Components

Component

Comments

Target

% of Total

1. PNMAC Pre-Tax Return on Equity (ROE)

 

 

 

2. Individual Effectiveness

 

 

 

 

 

 

 

 

Pay-Out Scale for Component 1

Achievement

Factor

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Multiplier Scale for Component 2

Rating

Factor

Description

5

 

Outstanding

4

 

Exceeds Expectations

3

 

Meets Expectations

2

 

Needs Improvement

1

 

Unsatisfactory

 

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