# EDGAR Filing Document

**Accession Number:** 0001745916
**File Stem:** 0001104659-23-036669
**Filing Date:** 2023-3
**Character Count:** 38566
**Document Hash:** c43a9a357aac9f2859accbe5f5e36713
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-23-036669.hdr.sgml**: 20230324

**ACCESSION NUMBER**: 0001104659-23-036669

**CONFORMED SUBMISSION TYPE**: 8-K/A

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20230303

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230324

**DATE AS OF CHANGE**: 20230324

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PennyMac Financial Services, Inc.
- **CENTRAL INDEX KEY:** 0001745916
- **STANDARD INDUSTRIAL CLASSIFICATION:** MORTGAGE BANKERS & LOAN CORRESPONDENTS [6162]
- **IRS NUMBER:** 831098934
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38727
- **FILM NUMBER:** 23760553

**BUSINESS ADDRESS:**
- **STREET 1:** 3043 TOWNSGATE ROAD
- **CITY:** WESTLAKE VILLAGE
- **STATE:** CA
- **ZIP:** 91361
- **BUSINESS PHONE:** (818) 224-7442

**MAIL ADDRESS:**
- **STREET 1:** 3043 TOWNSGATE ROAD
- **CITY:** WESTLAKE VILLAGE
- **STATE:** CA
- **ZIP:** 91361

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** New PennyMac Financial Services, Inc.
- **DATE OF NAME CHANGE:** 20180709

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K/A**

**(Amendment No. 1)**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported): March 3, 2023**

**PennyMac Financial Services, Inc.**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Delaware** | &nbsp;&nbsp;**001-38727** | &nbsp;&nbsp;**83-1098934** |
| &nbsp;&nbsp;(State or other jurisdiction | &nbsp;&nbsp;(Commission | &nbsp;&nbsp;(IRS Employer |
| &nbsp;&nbsp;of incorporation) | &nbsp;&nbsp;File Number) | &nbsp;&nbsp;Identification No.) |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;**3043 Townsgate Road, Westlake Village, California** | &nbsp;&nbsp;**91361** |
| &nbsp;&nbsp;(Address of principal executive offices) | &nbsp;&nbsp;(Zip Code) |

---

**(818) 224-7442**

(Registrant's telephone number, including area code)

**Not Applicable**

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

◻ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

◻ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

◻ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Title of each class** | &nbsp;&nbsp;**Trading Symbol(s)** | &nbsp;&nbsp;**Name of each exchange on which registered** |
| &nbsp;&nbsp;Common Stock, $0.0001 par value | &nbsp;&nbsp;PFSI | &nbsp;&nbsp;New York Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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 13(a) of the Exchange Act. ◻

This Amendment No. 1 amends the Current Report on Form 8-K of PennyMac Financial Services, Inc. (the "Company") filed on March 9, 2023, which reported that Vandad Fartaj ceased serving as the Company's Senior Managing Director and Chief Investment Officer on March 3, 2023. The information set forth in the initial 8-K is incorporated herein by reference.

**Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.**

On March 21, 2023, the Company and Mr. Fartaj entered into a separation agreement and general release (the "Separation Agreement") providing that in exchange for Mr. Fartaj's release of claims and other terms the Company will provide Mr. Fartaj: (1) cash severance of $1,525,000, (2) the right to exercise all outstanding vested stock options for the remainder of their original terms, (3) continued vesting of certain unvested stock options and restricted stock units granted in 2021 and 2022 and (4) continued eligibility to vest in certain performance stock units (PSUs) granted in 2021 and 2022 based on Company performance during the performance period but not to exceed 100%. All other Company equity awards and incentive payments are forfeited under the Separation Agreement.

The payments and benefits to Mr. Fartaj under the Separation Agreement are subject to Mr. Fartaj not revoking the Separation Agreement during the seven day revocation period following the date he signed the Separation Agreement as well as complying with other obligations under the Separation Agreement, including a non-disparagement clause.

The description of the Separation Agreement in this Item 5.02 is qualified in its entirety by reference to the full text of the Separation Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein

**Item 9.01 Financial Statements and Exhibits.**

(d) Exhibits.

---

| | |
|:---|:---|
| **<u>Exhibit No.</u>** | **<u>Description</u>** |
| [10.1](tm2310448d1_ex10-1.htm) | [Separation Agreement and General Release date as of March 21, 2023.](tm2310448d1_ex10-1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | |
|:---|:---|
|  | PENNYMAC FINANCIAL SERVICES, INC. |
| Dated: March 24, 2023 | /s/ Daniel S. Perotti |
|  | Daniel S. Perotti |
|  | Senior Managing Director and Chief Financial Officer |

---

## Exhibit 10.1

**EXHIBIT 10.1**

**SEPARATION AGREEMENT AND GENERAL RELEASE**

This Separation Agreement and General Release ("Agreement") is made and entered into by and between **Vandad Fartaj** ("Fartaj"), on the one hand, and **PennyMac Financial Services, Inc.** and its wholly-owned subsidiaries ("PFSI") and **PennyMac Mortgage Investment Trust** and its wholly-owned subsidiaries ("PMT") (collectively, PFSI and PMT shall be referred to as the "PennyMac Entities"), on the other hand, with reference to the following:

**<u>RECITALS</u>**

A. **WHEREAS**, Fartaj has served as an officer and been an employee of PFSI and has served as an officer
of PMT, and his relationship with both entities ended as of March 17, 2023 for legitimate business reasons;

B. **WHEREAS,** Fartaj and the PennyMac Entities ("the Parties") desire to enter into this Agreement
providing for the consideration described below in exchange for Fartaj's release of claims and other terms set forth in this Agreement;

**NOW, THEREFORE**, the Parties, intending to be legally bound, agree as follows:

1. **Separation Date; Final Pay.** The Parties mutually agree and acknowledge that Fartaj's relationship
with the PennyMac Entities ended as of March 17, 2023 (the "Separation Date"). Fartaj acknowledges that he has been paid
in full for all wages, vacation pay, and other compensation due as a result of his relationship with the PennyMac Entities, and that there
are no further wages, vacation pay, or other compensation due or owed, other than as provided in this Agreement.

2. **Severance Pay.** In exchange for Fartaj's consent to the terms of this Agreement, including but not
limited to the release of claims set forth below, the PennyMac Entities will pay Fartaj the total amount of One Million Five Hundred Twenty-Five
Thousand Dollars and Zero Cents ($1,525,000.00), less standard withholdings and other deductions authorized by law (the "Severance
Amount"). Except as provided in Paragraph 3 below, the Severance Amount will be divided into two installments and paid as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. The first installment will be in the amount of Nine Hundred Seventy-Five Thousand Dollars and Zero Cents
($975,000.00), less standard withholdings and other deductions authorized by law, and will be mailed to Fartaj within five business days
following the later of: (a) the expiration of the seven-day revocation period referenced in Paragraph 11 below, or (b) return
of all property belonging to the PennyMac Entities as set forth in Paragraph 14 below; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Assuming the first installment becomes due and payable as set forth above, the second installment will
be in the amount of Five Hundred Fifty Thousand Dollars and Zero Cents ($550,000.00), less standard withholdings and other deductions
authorized by law, and will be mailed to Fartaj on September 15, 2023.

Page 1 of 10

3. **Deferred Compensation per Section 409A.** Notwithstanding any other provision in this Agreement,
to the extent that any payment or benefit that Fartaj becomes entitled to under this Agreement would be considered deferred compensation
subject to the 20 percent additional tax imposed pursuant to Section 409A of the Internal Revenue Code ("Section 409A"),
such payment or benefit shall not be provided until the earlier of: (a) six months and one day after Fartaj's separation from service,
or (b) Fartaj's death. All payments and benefits under this Agreement delayed pursuant to the immediately preceding sentence
shall be paid to Fartaj in a lump sum upon expiration of such six-month period (or if earlier, upon Fartaj's death). It is intended
that this Agreement shall comply with the provisions of Section 409A and the Treasury Regulations relating thereto so as not to subject
Fartaj to the payment of additional taxes and interest under Section 409A. In furtherance of this intent, this Agreement shall be
interpreted, operated, and administered in a manner consistent with these intentions. Notwithstanding the foregoing, Fartaj remains responsible
for any taxes assessed against him under Section 409A.

4. **Equity.** In further consideration of the terms of this Agreement, the Parties agree to the following
in regard to Fartaj's vested, partially vested, and unvested equity with both PFSI and PMT:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. **PFSI**:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>Stock Options</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Fully Vested Options (grant dates February 26, 2020 or earlier)</u>: Fartaj shall have the right
to exercise all fully vested stock options granted on February 26, 2020 or earlier for the remainder of their original, respective
10-year terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Special Bonus Option (54,024 PFSI common shares with a grant date December 14, 2020)</u>: For
the special bonus stock option to purchase 54,024 PFSI common shares granted on December 14, 2020 which fully vested on the grant
date but is subject to transfer restrictions, PFSI will allow the transfer restrictions to lapse for the third and final tranche of such
special bonus stock option on December 14, 2023, and Fartaj shall have the right to exercise such option for the remainder of its
original 10-year term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Partially Vested Option (17,000 PFSI common shares with grant date February 25, 2021)</u>: Fartaj
shall have the right to exercise the fully vested, two-thirds portion of a stock option to purchase 17,000 PFSI common shares granted
on February 25, 2021 for the remainder of its original 10-year term, and the unvested remaining one-third of such option shall be
forfeited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Partially Vested Option (14,601 PFSI common shares with grant date February 23, 2022)</u>: Fartaj
shall have the right to exercise the fully vested, one-third portion of a stock option to purchase 14,601 PFSI common shares granted on
February 23, 2022 for the remainder of its original 10-year term, and the unvested remaining two-thirds of such option shall be forfeited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Partially Vested Option (25,121 PFSI common shares with grant date February 23, 2022)</u>: Fartaj
shall have the right to exercise the fully vested, one-third portion of a stock option to purchase 25,121 PFSI common shares granted on
February 23, 2022 for the remainder of its original 10-year term. With regard to the unvested remaining two-thirds of such option,
PFSI agrees that the option will be allowed to vest in accordance with its original vesting schedule (without any continued service requirement),
and Fartaj shall have the right to exercise that option, when vested, for the remainder of its original term.

Page 2 of 10

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Stock Option Grants for 2023</u>: Fartaj shall forfeit any stock options granted during the 2023 calendar
year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. <u>Restricted Stock Units ("RSUs")/Performance Stock Units ("PSUs")</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Unvested RSUs</u>: The 5,775 unvested and outstanding RSUs from the 8,662 RSUs with a grant date of
February 23, 2022 shall vest in accordance with their original vesting schedule (without any continued service requirement). Fartaj
shall forfeit all other unvested and outstanding RSUs. The corresponding Dividend Equivalents with respect to the RSUs that will vest
in accordance with this Paragraph shall continue to be paid as provided in the applicable award agreement (without any continued service
requirement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Unvested PSUs</u>: Fartaj will be eligible to vest a 26/36th portion of unvested PSUs with a grant
date of February 25, 2021 based on the number of months worked during the performance period (in this case 26 out of 36 months, and
without any continued service requirement). Likewise, Fartaj will be eligible to vest a 14/36th portion of unvested PSUs with a grant
date of February 23, 2022 based on the number of months worked during the performance period (in this case 14 out of 36 months, and
without any continued service requirement). Such PSUs shall vest in accordance with their original vesting schedules and be settled in
a number of shares of PFSI stock based on the cumulative performance achievement during the performance period not to exceed 100% (and
without regard to any individual effectiveness modifier, and such individual effectiveness modifier shall be deemed to be 100%). The corresponding
Dividend Equivalents with respect to the PSUs that will vest in accordance with this Paragraph shall continue to be paid as provided in
the applicable award agreement (without any continued service requirement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>RSU/PSU Grants for 2023</u>: Fartaj shall forfeit any RSUs and PSUs granted during the 2023 calendar
year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **PMT**:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. <u>RSUs/PSUs</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Unvested RSUs</u>: Except as set forth in Paragraph 4.b.i.3. below, Fartaj will be eligible to vest
all unvested and outstanding RSUs (i.e., RSUs with grant dates of February 17, 2021 and February 25, 2022) in accordance with
their original vesting schedules (without any continued service requirement). The corresponding Distribution Equivalents with respect
to the RSUs that will vest in accordance with this Paragraph shall continue to be paid as provided in the applicable award agreement (without
any continued service requirement).

Page 3 of 10

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Unvested PSUs</u>: Except as set forth in Paragraph 4.b.i.3. below, Fartaj will be eligible to vest
all unvested and outstanding PSUs (i.e., PSUs with grant dates of February 17, 2021 and February 23, 2022) in accordance with
their original vesting schedules (without any continued service requirement), and such PSUs shall be settled in a number of shares of
PMT stock based on the cumulative performance achievement during the performance period not to exceed 100% (and without regard to any
individual effectiveness modifier, and such individual effectiveness modifier shall be deemed to be 100%). The corresponding Distribution
Equivalents with respect to the PSUs that will vest in accordance with this Paragraph shall continue to be paid as provided in the applicable
award agreement (without any continued service requirement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>RSU/PSU Grants for 2023</u>: Fartaj shall forfeit any RSUs and PSUs granted during the 2023 calendar
year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Fartaj acknowledges and agrees that the provisions in this Paragraph provide vesting and equity rights
to which Fartaj would not otherwise be entitled but for this Agreement and, thus, such rights constitute further, valid consideration
for the promises made by the PennyMac Entities under this Agreement. Further, Fartaj agrees that the vesting and other equity rights provided
in this Paragraph 4 shall be conditioned on his full and complete compliance with the terms of this Agreement, including but not limited
to the provisions of Paragraph 15 below. Except as provided above, Fartaj shall not be eligible to receive or vest any PFSI or PMT stock
options, RSUs, PSUs, or any other equity awards; he shall have no other rights to exercise vested equity; and any outstanding equity awards
shall be forfeited.

5. **No Right to Future Bonus Payments.** Fartaj acknowledges and
agrees that the Severance Amount in Paragraph 2 includes and exceeds any bonus amounts that were earned or could have been earned from
his employment. Accordingly, Fartaj is not entitled to any annual bonus or non-equity performance based incentives earned or accrued
prior to the date of this Agreement; nor would Fartaj be entitled to any such amounts at any point thereafter.

6. **Payments Exceed Remuneration Owed To Fartaj.** Fartaj acknowledges and agrees that the consideration under this Agreement above
exceeds any remuneration or rights to which Fartaj is otherwise entitled. Fartaj further acknowledges and agrees that, except as expressly
set forth in this Agreement, the PennyMac Entities shall have no further obligation to Fartaj.

7. **Agreement Not To Contest Unemployment Benefits.** Although the PennyMac Entities make no representations
regarding Fartaj's possible entitlement to unemployment insurance benefits, the PennyMac Entities agree that they will not contest eligibility
should Fartaj decide to make a claim for such benefits under applicable state law.

8. **COBRA Benefits.** Fartaj will continue on PFSI's health insurance plan through the end of March 2023.
Thereafter, Fartaj may elect to exercise his COBRA rights and continue coverage under PFSI's group health plan(s). If Fartaj elects COBRA
coverage, he will be required to make such payments to the plan as are permitted by COBRA. PFSI will send COBRA information to the Fartaj
under separate cover.

Page 4 of 10

9. **Fartaj's Release of All Claims.** In exchange for the consideration provided by the PennyMac Entities
under this Agreement, Fartaj covenants not to sue and releases and discharges the PennyMac Entities and all of their predecessors, successors,
parent, subsidiary, affiliated and/or related entities, and their current and former directors, officers, executives, supervisors, employees,
representatives, agents, and attorneys ("PennyMac Released Parties") from any and all claims whatsoever arising prior to Fartaj's
execution of this Agreement, whether known or unknown and suspected or unsuspected, including, but not limited to, any claims arising
out of Fartaj's relationship and/or the termination of his relationship with the PennyMac Entities ("Released Claims"). Without
limitation, the Released Claims include: any and all claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Civil
Rights Act of 1866, the Civil Rights Act of 1991, the Americans with Disabilities Act ("ADA"), the ADA Amendments Act of 2008,
the Rehabilitation Act, the Genetic Information Non-Discrimination Act ("GINA"), the Age Discrimination in Employment Act ("ADEA"),
the Employee Retirement Income Security Act ("ERISA"), the Older Workers Benefit Protection Act ("OWBPA"), the Worker
Adjustment Retraining Notification Act ("WARN"), the Consolidated Omnibus Budget Reconciliation Act ("COBRA"), the
Family Medical Leave Act ("FMLA"), the California Family Rights Act ("CFRA"), the California Fair Employment and Housing
Act ("FEHA"), the California Labor Code; any actual or potential claims arising under any federal, state, or local laws or statutes
not specifically identified in this Paragraph; any actual or potential claims for wrongful termination, constructive discharge, breach
of contract, breach of the covenant of good faith and fair dealing, tort, intentional and/or negligent infliction of emotional distress,
intentional and/or negligent misrepresentation, negligent supervision, defamation, fraud, discrimination, harassment, retaliation, failure
to prevent discrimination, failure to prevent harassment, failure to prevent retaliation, failure to hire, failure to promote, physical
injuries, personal injuries, economic damages, loss of consortium, punitive damages, wages, overtime, missed meals and breaks, premium
pay, statutory penalties, civil penalties, severance pay, relocation expenses, expenses, expense reimbursements, stocks, stock options,
equity grants, bonuses, sick leave, holiday pay, vacation pay, life insurance, health and medical insurance, or any other fringe benefit;
and any other actual or potential claims based upon any act or omission of the PennyMac Entities and/or PennyMac Released Parties occurring
prior to Fartaj's execution of this Agreement. The Released Claims do not include: (i) claims under the federal Fair Labor Standards
Act; (ii) claims that cannot be released under applicable law; (iii) claims to enforce Fartaj's rights under this Agreement;
(iv) Fartaj's rights to indemnification under the applicable organizational documents of the PennyMac Entities; (v) Fartaj's
rights to any director and officer insurance policy; and (vi) vested benefits under any applicable retirement plan. However, to the
extent that Fartaj has any such unreleased claims, those claims must be submitted to arbitration as provided in Paragraph 21 below.

10. **Waiver of Civil Code Section 1542.** Fartaj expressly waives the provisions of California Civil
Code Section 1542, which provides as follows:

"A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor."

Fartaj waives all rights under Section 1542 or any other law or statute of similar effect in any jurisdiction with respect to the Released Claims. Fartaj acknowledges that he understands the significance and specifically assumes the risk regarding the consequences of such release and such specific waiver of Section 1542. Except as to any unreleased claims specifically listed in the second-to-last sentence of Paragraph 9, Fartaj acknowledges and agrees that this Agreement releases all claims existing or arising prior to his execution of this Agreement which he has or may have against the PennyMac Entities and/or the PennyMac Released Parties whether such claims are known or unknown and suspected or unsuspected by Fartaj and Fartaj forever waives all inquiries and investigations into any and all such claims.

Page 5 of 10

11. **OWBPA Release.** This Agreement constitutes
 a voluntary waiver and release of Fartaj's rights and claims under the Age Discrimination
 in Employment Act and pursuant to the Older Workers Benefit Protection Act ("OWBPA").
 Fartaj acknowledges: (a) he has been advised and is aware of his right to consult with
 legal counsel of his choice prior to signing this Agreement; (b) he further acknowledges
 that he is aware that he has twenty-one (21) days during which to consider the provisions
 of this Agreement, although he may sign and return it sooner; (c) he has the right to
 revoke this Agreement for a period of seven (7) days after his execution; and (d) nothing
 in this Agreement prevents or precludes him from challenging or seeking a determination in
 good faith of the validity of this waiver under the ADEA, nor does it impose any condition
 precedent for, or penalties or costs as a result of, his doing so, unless specifically authorized
 by federal law. During the seven-day revocation period referenced above, Fartaj may revoke
 this Agreement by giving written notice to Derek Stark, Senior Managing Director, Chief Legal
 Officer, and Secretary via both certified mail at PennyMac Financial Services, Inc.,
 3043 Townsgate Road, Westlake Village, CA 91361 and e-mail at the following e-mail address: <u>derek.stark@pennymac.com.</u> Accordingly, this Agreement shall not become effective or
 enforceable until the eighth day following Fartaj's execution of this Agreement which shall
 be the effective date of this Agreement.

12. **No Pending Claims or Lawsuits.** Fartaj acknowledges and agrees that as of his execution of this Agreement, he has no pending
lawsuits, arbitration claims, administrative complaints or charges, claims for indemnity, or other claims pending against the PennyMac
Entities and/or the PennyMac Released Parties. Fartaj agrees that he will not file any charge, civil action, or claim with any local,
state or federal agency, court, or arbitral forum based upon any of the Released Claims.

13. **Work-Related Injuries.** Fartaj represents and affirms that he has reported to the PennyMac Entities all known work-related injuries
that Fartaj has suffered or sustained during his relationship with the PennyMac Entities.

14. **Return of PennyMac Entities' Property.** Fartaj agrees that he is not entitled to any payment under
Paragraph 2 above unless and until he has returned all property owned by the PennyMac Entities. Accordingly, Fartaj represents that he
has returned to the PennyMac Entities all of their property, including but not limited to keys, access cards, laptop computers, cell phones,
and all originals and copies of the following, whether in his possession or previously removed by him from the PennyMac Entities' premises
and still existing, and whether recorded on paper, computer disk, other computer-readable form, or any other medium: all lists, correspondence,
books, letters, records, financial data, and other materials and writings owned by the PennyMac Entities or used by it in connection with
the conduct of its business. Fartaj likewise represents that the PennyMac Entities have returned all of his personal property.

15. **Non-Disparagement.** The Parties agree that they will not, and PFSI and PMT agree to instruct its executive officers and directors
not to, orally or in writing, publicly or privately, post, publish, make or express any comment, view or opinion that criticizes, brings
disrepute in the eyes of the public, defames, derogates or disparages another party to this agreement in any manner, including but not
limited to any managers, officers, employees, representatives or agents of the PennyMac Entities, nor shall the Parties authorize any
agent or representative to make or express any such comment, view or opinion. However, nothing in this Agreement prevents Fartaj from
discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that
he has reason to believe is unlawful. For the avoidance of doubt, Fartaj is not subject to any non-compete or non-solicitation agreements
and he shall not be restricted from engaging in such activity provided he complies with applicable law.

Page 6 of 10

16. **Government Agencies.** Fartaj understands that nothing in this Agreement limits his ability to communicate with any federal,
state or local government agency or to participate in any investigation or proceeding that may be conducted by any such government agencies,
including providing documents or other information without notice to the PennyMac Entities. This Agreement does not limit Fartaj's right
to receive an award for information provided to any government agencies.

17. **Cooperation.** Fartaj agrees to provide such reasonable cooperation and assistance as may be requested in good faith from time
to time by the PennyMac Entities with respect to the investigation and handling of any threatened, pending or future litigation, regulatory
proceeding, investigation, administrative or other hearing, trial or proceeding, initiated by the PennyMac Entities or any other person,
entity or governmental body against the PennyMac Entities. Such reasonable cooperation shall be at mutually agreed times, and the Parties
shall mutually agree on an hourly rate to be paid to Fartaj for his time.

18. **Employment Inquiries.** To the extent Fartaj wishes to have prospective employers or others verify his former employment with
the PFSI, Fartaj agrees to direct all such inquiries to "The Work Number" at 1-800-367-5690 (1-800-424-0253 for TTY if hearing
impaired). In such situations, "The Work Number" shall only provide dates of employment and job titles. "The Work Number"
shall be the sole and exclusive mechanism and means by which to verify Fartaj's former employment with the PFSI. The PennyMac Entities
and the PennyMac Released Parties shall not be liable or responsible for any inquiry directed to any source, person or location other
than "The Work Number."

19. **Real Party in Interest.** Fartaj represents and warrants that he is and at all relevant times has been the real party in interest
with respect to any and all Released Claims, represents and warrants that no other individual and/or entity has a lien, claim, or interest
in Fartaj's Released Claims or potential claims, and represents and warrants that Fartaj has not assigned or transferred or purported
to assign or transfer by operation of law or otherwise, to any person or entity, any claim embraced in this Agreement, or any portion
or interest in any such claim. Fartaj agrees to indemnify the PennyMac Entities and the PennyMac Released Parties (individually and/or
severally), and to defend and hold them harmless (individually and/or severally) from and against any claims arising out of, related to,
or in connection with any such prior assignment or transfer, or any such purported assignment or transfer, of any claims or other matters
released in this Agreement.

20. **No Admissions**. Neither this Agreement nor anything contained in this Agreement shall be admissible in any proceeding as evidence
of or an admission by the PennyMac Entities and/or the PennyMac Released Parties of any violation of any law or regulation or of any liability
whatsoever to Fartaj. Likewise, neither this Agreement nor anything contained in this Agreement shall be admissible in any proceeding
as evidence of or an admission by Fartaj of any violation of any law or regulation or of any liability whatsoever to the PennyMac Entities
and/or the Pennymac Released Parties. Notwithstanding the foregoing, this Agreement may be introduced into a proceeding solely for the
purpose of enforcing this Agreement.

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21. **Arbitration.** Any dispute over the formation, validity, enforcement, scope, breach or interpretation
of this Agreement and any dispute of any kind whatsoever between Fartaj and the PennyMac Entities and/or the PennyMac Released Parties,
if any, shall be submitted and resolved in final and binding arbitration through the American Arbitration Association ("AAA")
in accordance with its employment arbitration rules, applicable to individually negotiated agreements; except, no arbitrator shall have
jurisdiction to grant any remedy or relief that would have been unavailable to the parties had the matter been heard in court in accordance
with applicable law, including, but not limited to, awards of attorney's fees and costs. Any and all issues regarding this agreement to
arbitrate, both procedural and substantive, shall be governed by the Federal Arbitration Act.

22. **Entire Agreement.** This Agreement contains the entire agreement and understanding between Fartaj and the PennyMac Entities and
supersedes all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning its subject matter. This
is an integrated document.

23. **Severability.** Should any provision, part or term of this Agreement be held to be invalid or unenforceable, the validity and
enforceability of the remaining parts, terms and provisions shall not be affected, and a suitable and equitable provision shall be substituted
to carry out, so far as may be enforceable and valid, the intent and purpose of the invalid or unenforceable provision.

24. **Successors.** This Agreement shall be binding upon and shall inure to the benefit of Fartaj, the PennyMac Entities and the PennyMac
Released Parties and their respective heirs, administrators, successors and assigns.

25. **Knowing and Voluntary Entry into Agreement**. Fartaj acknowledges that he has read this Agreement,
that he understands it, and that the decision to enter into this Agreement is knowing and voluntary and based only upon the promises contained
in this Agreement and is not based on any other promises or representations of any kind whatsoever.

26. **Right to Consult Legal Counsel.** In addition to the acknowledgments in Paragraph 11 above, Fartaj
acknowledges: (a) he has been advised of the right to consult an attorney regarding this Agreement, and (b) he has been given
at least five (5) business days in which to do so. To the extent Fartaj signs this Agreement prior to five (5) business days
after receiving it, he acknowledges that his decision to do so was knowing and voluntary and was not induced by the PennyMac Entities
through fraud, misrepresentation, or a threat to withdraw or alter the offer prior to the expiration of the time period specified in this
Paragraph, or by providing different terms to employees who sign such an agreement prior to the expiration of such time period.

27. **Use of Headings/Paragraph Titles.** The headings/paragraph titles in this document are for reference
only and shall not in any way affect the meaning or interpretation of this Agreement.

28. **Counterparts**. This Agreement may be executed in counterparts and exchanged by the parties by electronic
means, including facsimile, e-mail of pdf copies of original physical signatures, and/or electronic signatures certified or verified by
DocuSign or similar certified signature method, and each counterpart when executed shall have the efficacy of a signed original. Photographic,
facsimile, e-mailed pdf copies of such physically, and/or certified or verified electronically signed counterparts may be used in lieu
of the originals for any purpose.

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29. **Choice of Law**. With the exception of the agreement to arbitrate in Paragraph 21 above, this Agreement
shall be governed by and construed in accordance with the law of the State of California.

**IN WITNESS WHEREOF,** the Parties have executed this Agreement as of the dates indicated below:

**[INTENTIONALLY BLANK: SIGNATURES ON THE FOLLOWING PAGE]**

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**PLEASE READ THIS AGREEMENT CAREFULLY. IT INCLUDES A GENERAL RELEASE AND WAIVER OF ALL KNOWN AND UNKNOWN CLAIMS.**

**By signing below, I voluntarily agree to the terms and conditions of this Agreement.**

Executed this 21<sup>st</sup> day of March 2023, at ________________, California.

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| | |
|:---|:---|
| By: | /s/ Vandad Fartaj |
|  | VANDAD FARTAJ |

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Executed this 21<sup>st</sup> day of March 2023, at Westlake Village, California.

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| | |
|:---|:---|
| PENNYMAC FINANCIAL SERVICES, INC. | PENNYMAC FINANCIAL SERVICES, INC. |
| By: | /s/ Derek Stark |
|  | DEREK STARK |
|  | Senior Managing Director, Chief Legal Officer, and Secretary |
| PENNYMAC MORTGAGE INVESTMENT TRUST | PENNYMAC MORTGAGE INVESTMENT TRUST |
| By: | /s/ Derek Stark<u> </u> |
|  | DEREK STARK |
|  | Senior Managing Director, Chief Legal Officer, and Secretary |

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