Exhibit 10.1


 


 





[Information
indicated with brackets has been excluded from this exhibit because it is not 

material and would be competitively harmful if publicly
disclosed]


 


PENNYMAC FINANCIAL
SERVICES, INC.


CHANGE OF CONTROL SEVERANCE
PLAN


 


The Company hereby adopts
this PennyMac Financial Services, Inc. Change of Control Severance Plan for the benefit of certain employees of the Company and its subsidiaries,
on the terms and conditions hereinafter stated. The Plan, as set forth herein, is intended to help retain qualified employees, maintain
a stable work environment and provide economic security to eligible employees in the event of certain terminations of employment. The
Plan, as a “severance pay arrangement” within the meaning of Section 3(2)(B)(i) of ERISA, is intended to be excepted
from the definitions of “employee pension benefit plan” and “pension plan” set forth under section 3(2) of ERISA,
and is intended to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of regulations
published by the Secretary of Labor at Title 29, Code of Federal Regulations §2510.3-2(b).


 


SECTION 1.        DEFINITIONS.
As hereinafter used:


 


1.1    “Affiliate”
means, with respect to any individual or entity, any other individual or entity who, directly or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with, such individual or entity.


 


1.2    “Board”
means the Board of Directors of the Company.


 


1.3    “Cause”
means that the Eligible Employee has: (a) willfully failed to perform, or been grossly negligent in the discharge of, his or her
duties to the Company or any of its subsidiaries (in any case, other than by reason of a disability, physical or mental illness or analogous
condition); (b) committed any acts constituting (i) a felony or (ii) any misdemeanor involving dishonesty, moral turpitude, deceit
or fraud; (c) materially breached any employment agreement or other obligation to the Company, including without limitation a breach
by the Eligible Employee of the Company’s written employment policies; (d) materially violated any provision of any agreement(s)
between the Eligible Employee and the Company, including any agreement relating to noncompetition, nonsolicitation, nondisclosure and/or
assignment of inventions; (e) engaged in acts of fraud or material misconduct in connection with the performance of his or her duties
with the Company, any of its subsidiaries or any Affiliate of the Company or any of its subsidiaries, including, without limitation, (A)
willful failure or refusal to perform material responsibilities that have been requested by such Eligible Employee’s supervisor;
(B) dishonesty to such Eligible Employee’s supervisor with respect to any material matter; or (C) misappropriation of funds or property
of the Company or any of its subsidiaries or affiliates other than the occasional, customary and de minimis use of Company property for
personal purposes; or (f) engaged in any misconduct, regardless of whether or not in the course of such Eligible Employee’s employment,
that would reasonably be expected to result in material injury or reputational harm to the Company or any of its subsidiaries or affiliates.
No act or failure to act on the part of the Eligible Employee shall be deemed “willful” unless done, or omitted to be done,
by the Eligible Employee not in good faith or without reasonable belief that the Eligible Employee’s act or failure to act was in
the best interests of the Company.


 


1.4    A
 “Change of Control” shall be deemed to mean the occurrence of any of the following after the Effective Date:


 


(a)         any
(i) merger or consolidation of the Company with or into another entity as a result of which the Stock of the Company is converted
into or exchanged for the right to receive cash, securities or other property or is cancelled, (ii) sale or exchange of all of the
Stock of the Company for cash, securities or other property, (iii) sale, transfer, or other disposition of all or substantially all
of the Company’s assets to one or more other persons in a single transaction or series of related transactions, or (iv) any
liquidation or dissolution of the Company, unless securities possessing more than 50% of the total combined voting power of the
survivor’s or acquiror’s outstanding securities (or the securities of any parent thereof) are held by a person or
persons who held securities possessing more than 50% of the total combined voting power of the Company’s outstanding
securities immediately prior to that transaction; or


 






    



     


    

 


(b)         any person
or group of persons (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended and in effect from time
to time) directly or indirectly acquires, including but not limited to by means of a merger or consolidation, beneficial ownership (determined
pursuant to Securities and Exchange Commission Rule 13d-3 promulgated under the said Exchange Act) of securities possessing more than
20% of the total combined voting power of the Company’s outstanding securities unless pursuant to a tender or exchange offer made
directly to the Company’s stockholders that the Board recommends such stockholders accept, other than (i) the Company or any of
its Affiliates, (ii) an employee benefit plan of the Company or any of its Affiliates, (iii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its Affiliates, or (iv) an underwriter temporarily holding securities pursuant
to an offering of such securities; or


 


(c)         over a period
of twelve (12) consecutive months or less, there is a change in the composition of the Board such that a majority of the Board members
(rounded up to the next whole number, if a fraction) ceases, by reason of one or more proxy contests for the election of Board members,
to be composed of individuals who either (i) have been Board members continuously since the beginning of that period, or (ii) have been
elected or nominated for election as Board members during such period by at least a majority of the Board members described in the preceding
clause (i) who were still in office at the time that election or nomination was approved by the Board; or


 


(d)         a majority
of the Board votes in favor of a decision that a Change of Control has occurred.


 


1.5    “Change
of Control Protection Period” means the period commencing on the date a Change of Control occurs and ending on the second anniversary
of such date.


 


1.6    “Code”
means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto, and any regulations issued from
time to time thereunder.


 


1.7    “Company”
means PennyMac Financial Services, Inc., its subsidiaries or any successors thereto.


 


1.8    “Disability”
means a physical or mental condition entitling the Eligible Employee to benefits under the applicable long-term disability plan of the
Company or any its subsidiaries, or if no such plan exists, a “permanent and total disability” (within the meaning of Section 22(e)(3)
of the Code) or as determined by the Company in accordance with applicable laws.


 


1.9    “Effective
Date” means September 22, 2021.


 


1.10    “Eligible
Employee” means any employee set forth on Exhibit A who is employed on the date of a Change of Control.


 


1.11    “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.


 


1.12   “Equity
Plan” means the Pennymac Financial Services, Inc. 2013 Equity Incentive Plan and any successor plan thereto, as the same may
be amended from time to time.


 


1.13 “Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 






    



     


    

 


1.14    “Good
Reason” means, if an Eligible Employee has complied with the “Good Reason Process (as defined below) following the occurrence
of any of the following events, without such employee’s express written consent:


 


(a)       a
material reduction by the Company in the Eligible Employee’s base salary except for across-the-board salary reductions based on
the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company; or


 


(b)       a
material change in Eligible Employee’s title, position, duties or responsibilities which represents an adverse change from his or
her title, position, duties or responsibilities as in effect immediately prior to the Change of Control; or


 


(c)       the
relocation of the office at which the Eligible Employee is principally employed immediately prior to the Change of Control to a location
more than fifty (50) miles from the location of such office, except to the extent the Eligible Employee was not previously assigned to
a principal location and except for required travel on the Company’s business to an extent substantially consistent with the Eligible
Employee’s business travel obligations at the time of the Change of Control.


 


Notwithstanding the foregoing,
the Eligible Employee shall not have Good Reason to terminate employment with the Company (or otherwise have the right to claim that he
or she has been constructively terminated from employment) due solely to the fact that the Company shall cease to be a public company
and shall become a subsidiary of another publicly-traded corporation.


 


Any event described in
Section 1.13 (a), (b) or (c) which occurs prior to a Change of Control but which the Eligible Employee reasonably demonstrates (1) was
at the request of a third party who has indicated an intention or taken steps reasonably calculated to effect a Change of Control or (2)
otherwise arose in connection with, or in anticipation of, a Change of Control, shall constitute Good Reason for purposes of this Plan
notwithstanding that it occurred prior to a Change of Control.


 


Notwithstanding the foregoing,
any change in the Eligible Employee’s duties or responsibilities or any relocation of the Eligible Employee’s principal place
of employment shall not constitute Good Reason if such Eligible Employee either requested, volunteered to undertake, or consented in writing
to, such change or relocation. The Eligible Employee’s continued employment shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting Good Reason hereunder.


 


1.15 “Good Reason
Process” means that (i) such employee reasonably determines in good faith that a “Good Reason” condition has occurred;
(ii) such employee notifies the Company in writing of the first occurrence of the Good Reason condition within 60 days of when such employee
first becomes aware, or should with reasonable diligence have become aware, of the first occurrence of such condition; (iii) such employee
cooperates in good faith with the Company’s efforts, for a period not less than 30 days following such notice (the “Cure
Period”) to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) such
employee terminates his employment within 60 days after the end of the Cure Period. If the Company cures the Good Reason condition during
the Cure Period, Good Reason shall be deemed not to have occurred.


 


1.16 “Other
Equity Plan Participant” means any employee who holds an outstanding award under the Equity Plan and is not an Eligible Employee.


 


1.17 “Plan”
means the Change of Control Severance Plan, as set forth herein and as it may be amended from time to time.


 


1.18 “Plan Administrator”
means the Compensation Committee of the Board or such other authorized person or persons appointed from time to time by the Compensation
Committee of the Board to administer the Plan.


 


1.19 “Potential
Change of Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have
occurred:


(a)       the Company
enters into an agreement, the consummation of which would result in the occurrence of a Change of Control; or


 


(b)       the Company
or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change of
Control.


 


1.20
 “Potential Change of Control Period” means the period beginning upon the occurrence of a Potential Change of
Control and ending upon the earliest to occur of the: (i) consummation of the Change of Control or (ii) one-month
anniversary of the abandonment of the transaction or series of transactions that constitute a Potential Change of Control (as
determined by the Plan Administrator in its sole discretion).


 






    



     


    

 


1.21 “Severance”
means (a) the involuntary termination of an Eligible Employee’s employment by the Company or any subsidiary thereof, other
than for Cause, death or Disability or (b) a termination of an Eligible Employee’s employment by the Eligible Employee for
Good Reason, in each case, following a Change of Control and during the Change of Control Protection Period, other than a termination
of an Eligible Employee’s employment by the Company as part of a global integration after a Change of Control when such Eligible
Employee is rehired by the Company as part of such integration.


 


1.22 “Severance
Date” means the date on which an Eligible Employee incurs a Severance.


 


1.23 “Welfare
Benefit Continuation Period” means the eighteen (18) month period following a Severance that occurs during the Change in Control
Protection Period.


 


SECTION 2.     CHANGE
OF CONTROL SEVERANCE BENEFITS


 


2.1    Generally.
Subject to Sections 2.6, 2.7, 4 and 6.2 hereof, each Eligible Employee shall be entitled to the greater of either the: (a) severance
payments and benefits pursuant to the applicable provisions of Section 2 of this Plan if such Eligible Employee incurs a Severance
during the Change of Control Protection Period or (b) severance benefits under any negotiated severance or employment agreement between
such Eligible Employee and the Company (if applicable). With respect to an Eligible Employee who is entitled to benefits under the Workers
Adjustment Retraining Notification Act of 1988, or any similar state or local statute or ordinance (collectively the “WARN Act”), such
benefits under this Plan shall be reduced dollar-for-dollar by any benefits received pursuant to the WARN Act.


 


2.2    Payment
of Accrued Obligations. Subject to Sections 2.7, 4 and 6.2 hereof, the Company shall pay to each Eligible Employee who incurs a Severance
during the Change of Control Protection Period a lump sum payment in cash, paid in accordance with applicable law, as soon as practicable
but no later than 10 days after the Severance Date, equal to the sum of (a) the Eligible Employee’s accrued but unpaid annual
base salary and any accrued but unpaid vacation pay through the Severance Date, and (b) the Eligible Employee’s annual bonus
earned for the fiscal year immediately preceding the fiscal year in which the Severance Date occurs if such bonus has not been paid as
of the Severance Date.


 


2.3    Severance.
Each Eligible Employee who incurs a Severance during the Change of Control Protection Period shall be entitled to (i) payment of
his or her Base Pay and Bonus, as in effect on the Severance Date (or, if higher, as in effect on the date on which the Change of Control
occurs) in a lump sum payment, as set forth on Exhibit A following the Severance and (ii) reimbursement for individual outplacement
services at a level to be determined by the Plan Administrator for a period of up to eighteen (18) months after the Severance Date, such
reimbursement to be paid not later than sixty (60) days following the month in which the expense is incurred. ; or, if applicable, as
set forth in any negotiated severance or separation agreement between such Eligible Employee and the Company.


 


For purposes of calculating
the Base Pay and Bonus as provided in this Section 2.3, (1) the Eligible Employee’s “Base Pay” shall be the Eligible
Employee’s base annual salary as of his or her Severance Date or, if greater, as of the date on which the Change in Control occurs
and (2) the Eligible Employee’s “Bonus” shall be the greater of (x) the average of the aggregate bonus and/or commission,
if any, paid or payable to the Eligible Employee for each of the two (2) fiscal years preceding the fiscal year in which the Eligible
Employee’s Severance Date occurs (or such fewer number of fiscal years for which the Eligible Employee was eligible to receive a
bonus and/or commission) and (y) the bonus and/or commission paid for the fiscal year immediately preceding the date of the Change of
Control.


 






    



     


    

 


2.4   Acceleration
of Vesting.


 


(a)           Eligible
Employees. In addition to the benefits provided pursuant to Sections 2.3 and 2.5 hereof (as applicable), each Eligible Employee
who incurs a Severance during the Change of Control Protection Period shall be entitled to (i) with
respect to any outstanding equity awards subject to time-based vesting, including, but not limited to, stock options, full
acceleration of the time-based vesting provisions of such awards and (ii) with respect to any outstanding equity awards subject to
performance-based vesting, the pro rata portion of such award that remains outstanding after application of Section 9 of the Equity
Plan or any similar change of control provision in the Equity Plan shall be deemed vested at target; or,
if applicable, as set forth in any negotiated severance or separation agreement between such Eligible Employee and the
Company.


 


(b)           Other
Equity Plan Participants. Each Other Equity Plan Participant who incurs a Severance during the Change of Control Protection Period
shall be entitled to the same benefits provided in Section 2.4(a) to Eligible Employees. For the avoidance of doubt, Other Equity Plan
Participants shall only be entitled to the benefits described in this Section 2.4(b) and shall not be entitled to any other payments
or benefits described in this Plan.


 


2.5    Benefit
Continuation. In the case of each Eligible Employee who incurs a Severance during the Change of Control Protection Period, during
the Welfare Benefit Continuation Period the Company shall provide to each such Eligible Employee (and anyone entitled to claim under or
through such Eligible Employee) all Company-paid benefits under any group health plan or dental plan of the Company (as in effect immediately
prior to such Eligible Employee’s Severance Date) for which Eligible Employees of the Company are eligible, to the same extent as
if such Eligible Employee had continued to be an Eligible Employee of the Company during the Welfare Benefit Continuation Period; provided,
however, such benefits shall be subject to such Eligible Employee’s (i) timely election of continuation coverage under Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), and (ii) continued copayment of premium amounts at
the applicable active employees’ rate. To the extent that such Eligible Employee’s participation in Company benefit plans
is not practicable, the Company shall arrange to provide, at the Company’s sole expense, such Eligible Employee (and anyone entitled
to claim under or through such Eligible Employee) with equivalent health and dental benefits under an alternative arrangement during the
Welfare Benefit Continuation Period. The coverage period for purposes of the group health continuation requirements of Section 4980B of
the Code shall commence at the Severance Date, and shall run concurrently with the Welfare Benefit Continuation Period.


 


2.6    Release;
Restrictive Covenants; Benefit Commencement Date. No Eligible Employee who incurs a Severance during the Change of Control Protection
Period shall be eligible to receive any payments or other benefits under the Plan (other than payments under Section 2.2 hereof)
unless, within forty-five (45) days following such Employee’s Severance Date, he or she first executes a release (as substantially
in the form of Exhibit B hereto, or in such other form as is required to comply with applicable law, a “Release”)
in favor of the Company and others set forth on said Exhibit B, or in such other form as is required to comply with applicable
law, relating to all claims or liabilities of any kind relating to his or her employment with the Company or a subsidiary thereof and
the termination of the Employee’s employment, and such Release becomes effective and has not been revoked by the employee by the
forty-fifth (45th) day following such Severance Date. Provided that the Eligible Employee executes the Release in accordance
with the requirements of this Section 2.6, any payments or other benefits under the Plan shall commence (the “Benefit Commencement
Date”) on or before the sixtieth (60th) business day following the Severance Date; all payments or benefits
accrued during the period between the Severance Date and Benefit Commencement Date shall be provided in full on the Benefit Commencement
Date. If the Eligible Employee does not execute and return such Release such that it does not become effective within the aforesaid period,
the Eligible Employee shall cease to be entitled to any payments or benefits under this Plan.


 


2.7    409A.
Notwithstanding any provision to the contrary in this Plan, no payment or distribution under this Plan which constitutes an item of
deferred compensation under Section 409A of the Code and becomes payable by reason of the Eligible Employee’s termination
of employment with the Company will be made to the Eligible Employee unless the Eligible Employee’s termination of employment
constitutes a “separation from service” (as such term is defined in Treasury Regulations issued under Section 409A
of the Code). In addition, no such payment or distribution will be made to the Eligible Employee prior to the earlier of
(i) the expiration of the six (6)-month period measured from the date of the Eligible Employee’s “separation from
service” (as such term is defined in Treasury Regulations issued under Section 409A of the Code) or (ii) the date of
the Eligible Employee’s death, if the Eligible Employee is deemed at the time of such separation from service to be a
 “key employee” within the meaning of that term under Section 416(i) of the Code and to the extent such delayed
commencement is otherwise required in order to avoid a prohibited distribution under Section 409A(a)(2) of the Code. All
payments and benefits which had been delayed pursuant to the immediately preceding sentence shall be paid to the Eligible Employee
in a lump sum upon expiration of such six-month period (or if earlier upon the Eligible Employee’s death). It is intended that
this Plan shall comply with the provisions of Section 409A of the Code and the Treasury Regulations relating thereto so as not
to subject the Eligible Employee to the payment of additional taxes and interest under Section 409A of the Code. In furtherance
of this intent, this Plan shall be interpreted, operated, and administered in a manner consistent with these intentions.


 






    



     


    

 


SECTION 3.        PLAN
ADMINISTRATION.


 


3.1    The
Plan Administrator shall administer the Plan and have all powers necessary to enable it to properly carry out its duties with respect
to the complete control of the administration of the Plan.


 


3.2 The Plan Administrator
shall have the power and authority in its discretion to:


 


(a)          
construe the Plan to determine all questions that shall arise as to interpretations of the Plan provisions;


 


(b)          
determine which individuals are and are not Eligible Employees, determine the benefits to which any Eligible Employee may be entitled,
the eligibility requirements for participation in the Plan and all other matters pertaining to the Plan;


 


(c)          
adopt amendments to the Plan which are deemed necessary or desirable to comply with all applicable laws and regulations, including but
not limited to Section 409A of the Code and the guidance thereunder; and


 


(d)          
make all other determinations necessary or advisable for the administration of the Plan, subject to all of the provisions of the Plan.


 


3.3    The
Plan Administrator may delegate any of its duties hereunder to such person or persons from time to time as it may designate.


 


3.4    
All decisions and interpretations of the Plan Administrator shall be final, binding, and conclusive on all persons, including the Company
and Eligible Employees.


 


SECTION 4.        LIMITATION
ON BENEFITS.


 


In the event that any payment
or benefit received or to be received by the Eligible Employee pursuant to the terms of any plan, arrangement or agreement (including
any payment or benefit received pursuant to the Plan) would be subject (in whole or part) to the excise tax (the “Excise Tax”)
imposed under Section 4999 of the Code (all such payments and benefits being hereinafter referred to as the “Total Payments”),
then the Total Payments shall be reduced to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax
but only if (i) the net amount of such Total Payments, as so reduced (after subtracting the amount of federal, state and local income
taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable
to such reduced Total Payments) is greater than or equal to (ii) the net amount of such Total Payments without such reduction (after subtracting
the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Eligible Employee
would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal
exemptions attributable to such unreduced Total Payments). The Total Payments shall be reduced in the following order: (A) reduction of
any cash severance payments otherwise payable to the Employee that are exempt from Section 409A of the Code, (B) reduction of any other
cash payments or benefits otherwise payable to the Eligible Employee that are exempt from Section 409A of the Code, but excluding any
payment attributable to the acceleration of vesting or payment with respect to any equity award with respect to the Company’s common
stock that is exempt from Section 409A of the Code, (C) reduction of any other payments or benefits otherwise payable to the Eligible
Employee on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payment attributable
to the acceleration of vesting and payment with respect to any equity award with respect to the Company’s common stock that is exempt
from Section 409A of the Code, and (D) reduction of any payments attributable to the acceleration of vesting or payment with respect to
any equity award with respect to the Company’s common stock that is exempt from Section 409A of the Code. The foregoing reductions
shall be made in a manner that results in the maximum economic benefit to the Eligible Employee and, to the extent economically equivalent,
in a pro rata manner.


 






    



     


    

 


Notwithstanding anything
to the contrary contained herein, the provisions of this Section 4 shall also apply to an Eligible Employee who has entered into an employment
agreement with the Company but only to the extent that such provision does not materially and adversely affect the payment and benefits
set forth in such Eligible Employee’s existing agreement and inures to the net economic benefit of such Eligible Employee.


 


SECTION 5.        PLAN
MODIFICATION OR TERMINATION.


 


5.1    As
long as no Potential Change of Control Period or Change of Control Protection Period is in effect, the Board may amend or terminate the
Plan at any time. During any Potential Change of Control Period or Change of Control Protection Period, the Board may not, except as provided
in Section 5.2, (a) terminate the Plan or (b) amend the Plan if such amendment would in any manner be adverse to the interests
of any Eligible Employee. For the avoidance of doubt, (a) any action taken by the Company or the Plan Administrator during the Change
of Control Protection Period to cause an Eligible Employee to no longer be designated as an Eligible Employee, or to decrease the payments
or benefits for which an Eligible Employee is eligible, and (b) any amendment to Section 3.4 or this Section 5 during the
Change of Control Protection Period shall be treated as an amendment to the Plan which is adverse to the interests of any Eligible Employee.


 


5.2    Notwithstanding
the foregoing Section 5.1, the Plan Administrator may amend the Plan at any time and in any manner necessary to comply with
applicable law, including, but not limited to, Section 409A of the Code.


 


SECTION 6.        GENERAL
PROVISIONS.


 


6.1    Except
as otherwise provided herein or by law, no right or interest of any Eligible Employee under the Plan shall be assignable or transferable,
in whole or in part, either directly or by operation of law or otherwise, including without limitation by execution, levy, garnishment,
attachment, pledge or in any manner; no attempted assignment or transfer thereof shall be effective; and no right or interest of any Eligible
Employee under the Plan shall be liable for, or subject to, any obligation or liability of such Eligible Employee. When a payment is due
under this Plan to a severed employee who is unable to care for his or her affairs, payment may be made directly to his or her legal guardian
or personal representative.


 


6.2    If
the Company or any subsidiary thereof is obligated by law or by contract to pay severance pay, a termination indemnity, notice pay, or
the like, or if the Company or any subsidiary thereof is obligated by law or by contract to provide advance notice of separation (“Notice
Period”), then any severance pay hereunder shall be reduced by the amount of any such severance pay, termination indemnity,
notice pay or the like, as applicable, and by the amount of any compensation received during any Notice Period. Notwithstanding any other
provision of the Plan, any Severance Benefits under this Plan shall be subject to any Company clawback policies that the Company has adopted,
or otherwise may adopt after the Effective Date, to the extent permissible under applicable law.


 


6.3    Neither
the establishment of the Plan, nor any modification thereof, nor the creation of any fund, trust or account, nor the payment of any benefits
shall be construed as giving any Eligible Employee, or any person whomsoever, the right to be retained in the service of the Company or
any subsidiary thereof, and all Eligible Employees shall remain subject to discharge to the same extent as if the Plan had never been
adopted.


 


6.4    If
any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions
hereof, and this Plan shall be construed and enforced as if such provisions had not been included.


 


6.5    This
Plan shall inure to the benefit of and be binding upon the heirs, executors, administrators, successors and assigns of the parties, including
each Eligible Employee, present and future, and any successor to the Company. If a severed employee shall die, all amounts, unless otherwise
provided herein, shall continue to accrue and be paid in accordance with the terms of this Plan to the executor, personal representative
or administrators of the severed employee’s estate.


 


6.6    The
headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not
be employed in the construction of the Plan.


 






    



     


    

 


6.7    The
Plan shall not be required to be funded unless such funding is authorized by the Board. Regardless of whether the Plan is funded, no Eligible
Employee shall have any right to, or interest in, any assets of any Company which may be applied by the Company to the payment of benefits
or other rights under this Plan.


 


6.8    Any
notice or other communication required or permitted pursuant to the terms hereof shall have been duly given when delivered or mailed by
United States Mail, first class, postage prepaid (or such local equivalent thereof), addressed to the intended recipient at his, her or
its last known address.


 


6.9    This
Plan shall be construed and enforced according to the laws of the State of Delaware to the extent not preempted by federal law or other
applicable local law, which shall otherwise control.


 


6.10    All
benefits hereunder shall be reduced by applicable withholding and shall be subject to applicable tax reporting, as determined by the Plan
Administrator, or as required by applicable law.


 


6.11    Any
amendments made to this Plan (including, but not limited to, amendments to the definition of Change of Control in Section 1.4, Change
of Control Protection Period in Section 1.5, Good Reason in Section 1.13, and Potential Change of Control in Section 1.16,
the provisions with regard to Plan Modifications or Termination in Section 5 and the Binding Arbitration provisions in Section 7.7)
will not be applicable in certain jurisdictions outside the United States where (i) country-specific definitions or terms and conditions
were adopted in a sub-plan to the Plan in accordance with applicable law, (ii) the amendments to the Plan would modify or otherwise
alter the country-specific definitions or terms and conditions as adopted in a sub-plan to the Plan in accordance with applicable law,
(iii) such changes to the Plan are prohibited by applicable law, or (iv) applicable law requires the Company or its affiliates
to provide notice, obtain approval or obtain consent for such amendments to the sub-plan and/or the Plan to or by local labor courts,
tribunals, governmental entities, works councils, unions, employee representatives or similar bodies or employees of the Company.


 


SECTION 7.        CLAIMS,
INQUIRIES, APPEALS.


 


7.1    Applications
for Benefits and Inquiries. Any application for benefits, inquiries about the Plan or inquiries about present or future rights under
the Plan must be submitted to the Plan Administrator in writing, as follows:


 


Plan Administrator


c/o PennyMac Financial
Services, Inc.


3043 Townsgate Road


Westlake Village, California
91362


Attention: Senior Managing
Director and Chief Operating Officer


 


7.2    Denial
of Claims. In the event that any application for benefits is denied in whole or in part, the Plan Administrator must notify the applicant,
in writing, of the denial of the application, and of the applicant’s right to review the denial. The written notice of denial will
be set forth in a manner designed to be understood by the employee, and will include specific reasons for the denial, specific references
to the Plan provision upon which the denial is based, a description of any information or material that the Plan Administrator needs to
complete the review and an explanation of the Plan’s review procedure.


 


This written notice will be given to the employee
within ninety (90) days after the Plan Administrator receives the application, unless special circumstances require an extension
of time, in which case, the Plan Administrator has up to an additional ninety (90) days for processing the application. If an extension
of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial ninety
(90) day period.


 


This notice of extension will describe the
special circumstances necessitating the additional time and the date by which the Plan Administrator is to render his or her decision
on the application. If written notice of denial of the application for benefits is not furnished within the specified time, the application
shall be deemed to be denied. The applicant will then be permitted to appeal the denial in accordance with the review procedure described
below.


 






    



     


    

 


7.3    Request
for a Review. Any person (or that person’s authorized representative) for whom an application for benefits is denied (or
deemed denied), in whole or in part, may appeal the denial by submitting a request for a review to the Plan Administrator within
sixty (60) days after the application is denied (or deemed denied). The Plan Administrator will give the applicant (or his or her
representative) an opportunity to review pertinent documents in preparing a request for a review and submit written comments,
documents, records and other information relating to the claim. A request for a review shall be in writing and shall be addressed
to:


 


Plan Administrator


c/o PennyMac Financial
Services, Inc.


3043 Townsgate Road


Westlake Village, California
91362


Attention: Senior Managing
Director and Chief Operating Officer


 


A request for review must set forth all of
the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are pertinent. The
Plan Administrator may require the applicant to submit additional facts, documents or other material as he or she may find necessary or
appropriate in making his or her review.


 


7.4    Decision
on Review. The Plan Administrator will act on each request for review within sixty (60) days after receipt of the request, unless
special circumstances require an extension of time (not to exceed an additional sixty (60) days), for processing the request for
a review. If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial
sixty (60) day period. The Plan Administrator will give prompt, written notice of his or her decision to the applicant. In the event that
the Plan Administrator confirms the denial of the application for benefits in whole or in part, the notice will outline, in a manner calculated
to be understood by the applicant, the specific Plan provisions upon which the decision is based. If written notice of the Plan Administrator’s
decision is not given to the applicant within the time prescribed in this Section 7.4, the application will be deemed denied on review.


 


7.5    Rules
and Procedures. The Plan Administrator may establish rules and procedures, consistent with the Plan and with ERISA, as necessary and
appropriate in carrying out his or her responsibilities in reviewing benefit claims. The Plan Administrator may require an applicant who
wishes to submit additional information in connection with an appeal from the denial (or deemed denial) of benefits to do so at the applicant’s
own expense.


 


7.6    Exhaustion
of Remedies. No claim for benefits under the Plan may be brought in any forum until the claimant (a) has submitted a written
application for benefits in accordance with the procedures described by Section 7.1 above, (b) has been notified by the Plan
Administrator that the application is denied (or the application is deemed denied due to the Plan Administrator’s failure to act
on it within the established time period), (c) has filed a written request for a review of the application in accordance with the
appeal procedure described in Section 7.3 above, and (d) has been notified in writing that the Plan Administrator has denied
the appeal (or the appeal is deemed to be denied due to the Plan Administrator’s failure to take any action on the claim within
the time prescribed by Section 7.4 above).


 


7.7    Binding
Arbitration. Any and all disputes (including but not limited to claims in contract, tort, or claims for the interpretation, scope,
or validity of the Plan, or this arbitration clause) between an applicant for benefits under the Plan, the Plan Administrator, and/or
the Company premised in whole or in part upon a claimed material diminution in the Eligible Employee’s duties and responsibilities
that remains unresolved after the exhaustion of the claims procedure outlined in Sections 7.1 through 7.6, above, shall be resolved through
binding arbitration by a single arbitrator. The arbitration shall be conducted in the State where the applicant was employed as of the
date of separation and will be governed by the Federal Arbitration Act (9 U.S.C. § 1 et. al). The arbitration will be conducted under
the JAMS Streamlined Rules, except as modified or expanded by this provision. The arbitrator shall apply the standard of a reviewing court
under ERISA and may provide all remedies and relief available under ERISA. The arbitrator shall permit reasonable pre-hearing discovery
of facts sufficient to permit the parties to adequately arbitrate their claim(s) and defense(s), including access to essential documents
and witnesses. The arbitrator shall give a written determination to the parties stating the arbitrator’s determination and the facts
and law supporting the determination and shall furnish to the parties a signed copy of such determination. The determination of the arbitrator
shall be conclusive and binding upon the parties and judgment upon the same may be entered in any court having jurisdiction thereof. To
the extent required by applicable law, the expenses of the arbitration shall be borne by the Company except that each party shall be responsible
for their own legal fees and expenses, subject to any decision by the arbitrator under ERISA to award attorney’s fees.


 






    



     


    

 


EXHIBIT A


 


	Eligible Employee Classification	Title
	A	[**********************************]
	B	[******************]


  


Severance Payment


 


The Severance Payment to which an Eligible Employee is entitled shall
be based on the Eligible Employee’s employee classification as of the date immediately preceding the date of the Eligible Employee’s
Qualifying Termination or, if greater, as of the date on which the Change of Control occurs, and shall equal the amount described in
the table below. 


 


	A	Two (2) years Base Pay (as defined in Section 2.3) plus 200% Bonus (as defined in Section 2.3)
	B	[*********************************] Base Pay (as defined in 2.3) plus [***]% Bonus (as defined in Section 2.3)


 






    



     


    

  


EXHIBIT B


 


FORM OF RELEASE