Document:

Exhibit 10.11

 

PENNYMAC FINANCIAL SERVICES, INC.
 2013 EQUITY INCENTIVE PLAN

 

RESTRICTED STOCK UNIT

AWARD AGREEMENT

 

THIS AGREEMENT is dated as of                          , 2014, 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

 

Vesting Commencement Date

 

Number of RSUs Subject to

Continued Service

 

Number of RSUs Subject to

Performance Components

 

Total Number of RSUs

 

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 (i) for each RSU that is subject to vesting based on continued service, one fully paid and nonassessable share of Class A Common Stock, par value $0.0001 per share, in the Company (the “Stock”), and (ii) for each RSU that is subject to vesting based on the satisfaction of performance components, one fully paid and nonassessable share of Stock if the Variance to Target is 0% for performance component 1 and the Rating is 4 for performance component 2, all as set forth on Exhibit A attached hereto, or such greater number (up to a maximum of 1.875 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 shall vest in accordance with the schedule set forth below.

 

(a)  Vesting Based on Continued Service.  One-third (1/3) of the RSUs subject to vesting based on continued service shall vest in a lump sum on each of the first, second,

 

 

and third anniversaries of the Vesting Commencement Date specified above, subject to the Recipient’s continued service through each such anniversary, with any fractions rounded down except on the final installment.  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 the date 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.

 

(b)  Vesting Based on Performance Components.  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 Company’s Earnings Per Share 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 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, including death or disability and an entity ceasing to be an Affiliate of the Company; 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, all of the then unvested RSUs shall be forfeited by the Recipient or any transferee.

 

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.

 

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.

 

	
By:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature of   Recipient
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    

 

 

PENNYMAC FINANCIAL SERVICES, INC. 2013 EQUITY INCENTIVE PLAN

Restricted Stock Unit Award Agreement

Exhibit A

 

	
 
    	
 
    	
 
    	
RSUs Subject to   Performance  
    	
 
    
	
Recipient:  
    	
 
    	
 
    	
Components (“Grant”):
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Total Potential Shares if   Maximum  
    	
 
    
	
Performance Period:
    	
 
    	
 
    	
Potential Components   Satisfied:
    	
 
    

 

PFSI Equity Incentive Plan Performance Objectives - EVPs and below

 

	
 
    	
 
    	
Component
    	
 
    	
Comments
    	
 
    	
Target
    	
 
    	
% of Total
    
	
Award
    	
 
    	
1.   Earnings Per Share (EPS)
    	
 
    	
The   performance measurement period will be 7/1/14 - 12/31/16 cumulative EPS.
    	
 
    	
$ 6.81
   cumulative diluted EPS
    	
 
    	
100%
    
	
Components
    	
 
    	
2.   Individual Effectiveness
    	
 
    	
Award   “modifier” based on individual overall achievement of cumulative EPS goal for   the 2 and one half grant period years.
    	
 
    	
4
   Exceeds Expectations
    	
 
    	
Multiplier
    

 

	
 
    	
 
    	
Variance to Target
    	
 
    	
Factor
    	
 
    	
 
    
	
 
    	
 
    	
25%
    	
 
    	
150%
    	
 
    	
 
    
	
 
    	
 
    	
17.5%
    	
 
    	
125%
    	
 
    	
 
    
	
Pay-Out   Scale for
    	
 
    	
0%
    	
 
    	
100%
    	
 
    	
 
    
	
Component 1
    	
 
    	
-17.5%
    	
 
    	
75%
    	
 
    	
 
    
	
 
    	
 
    	
-25%
    	
 
    	
50%
    	
 
    	
 
    
	
 
    	
 
    	
Less than -25%
    	
 
    	
0%
    	
 
    	
 
    

 

	
 
    	
 
    	
Rating
    	
 
    	
Description
    	
 
    	
Factor
    
	
 
    	
 
    	
5
    	
 
    	
Outstanding
    	
 
    	
125%
    
	
Multiplier   Scale
    	
 
    	
4
    	
 
    	
Exceeds Expectations
    	
 
    	
100%
    
	
for   Component 2
    	
 
    	
3
    	
 
    	
Meets Expectations
    	
 
    	
75%
    
	
 
    	
 
    	
2
    	
 
    	
Needs Improvement
    	
 
    	
0%
    
	
 
    	
 
    	
1
    	
 
    	
Unsatisfactory
    	
 
    	
0%Exhibit 10.48

 

EXECUTION

 

AMENDMENT NO. 8
 TO MASTER REPURCHASE AGREEMENT

 

Amendment No. 8 to Master Repurchase Agreement, dated as of August 13, 2014 (this “Amendment”), by and among Bank of America, N.A. (“Buyer”), PennyMac Loan Services, LLC (“Seller”) and Private National Mortgage Acceptance Company, LLC (the “Guarantor”).

 

RECITALS

 

Buyer, Seller and Guarantor are parties to that certain Master Repurchase Agreement, dated as of March 17, 2011, (as amended, restated, supplemented or otherwise modified from time to time, the “Existing Master Repurchase Agreement”; and as further amended by this Amendment, the “Master Repurchase Agreement”).  The Guarantor is a party to that certain Guaranty (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty”), dated as of March 17, 2011, made by Guarantor in favor of Buyer.

 

Buyer, Seller and Guarantor have agreed, subject to the terms and conditions of this Amendment, that the Existing Master Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Master Repurchase Agreement.  As a condition precedent to amending the Existing Master Repurchase Agreement, Buyer has required Guarantor to ratify and affirm the Guaranty on the date hereof.

 

Accordingly, Buyer, Seller and Guarantor hereby agree, in consideration of the mutual premises and mutual obligations set forth herein, that the Existing Master Repurchase Agreement is hereby amended as follows:

 

SECTION 1.                            Definitions.  Section 2 of the Existing Master Repurchase Agreement is hereby amended by deleting the definition of “Cash Equivalents” in its entirety and replacing it with the following (modified text underlined for review purposes):

 

“Cash Equivalents” means (a) securities with maturities of 90 days or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of 90 days or less from the date of acquisition and overnight bank deposits of Buyer or of any commercial bank having capital and surplus in excess of $500,000,000 and a rating of at least BBB- by S&P or Baa3 by Moody’s, (c) repurchase obligations of Buyer or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than seven days with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody’s and in either case maturing within 90 days after the day of acquisition, (e) securities with maturities of 90 days or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government

 

 

(as the case may be) are rated at least A by S&P or A by Moody’s, (f) securities with maturities of 90 days or less from the date of acquisition backed by standby letters of credit issued by Buyer or any commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.

 

SECTION 2.                            Conditions Precedent.  Section 10(b) of the Existing Master Repurchase Agreement is hereby amended by adding the following subsection (14) to the end thereof:

 

(14)                          No Affiliate Fund Default.  No Affiliate Fund is in default under any Indebtedness of such Affiliate Fund with Buyer or any of Buyer’s Affiliates.

 

SECTION 3.                            Representations and Warranties.  Section 13 of the Existing Master Repurchase Agreement is hereby amended by deleting subsection (11) in its entirety and replacing it with the following (modified text underlined for review purposes):

 

(11)                          Litigation.  There is no action, proceeding or investigation pending with respect to which either Seller or Guarantor has received service of process or, to the best of Seller’s or Guarantor’s knowledge, threatened against it before any court, administrative agency or other tribunal (A) asserting the invalidity of this Agreement, any Transaction or any Program Agreement, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any Program Agreement, (C) makes a claim individually in an amount greater than $5,000,000 or in an aggregate amount greater than $10,000,000, (D) which requires filing with the Securities and Exchange Commission in accordance with the 1934 Act or any rules thereunder or (E) which might materially and adversely affect the validity of the Mortgage Loans or the performance by it of its obligations under, or the validity or enforceability of, this Agreement or any Program Agreement.

 

SECTION 4.                            Covenants.  Section 14(ff) of the Existing Master Repurchase Agreement is hereby amended by deleting subsection (2) in its entirety.

 

SECTION 5.                            Events of Default.  Section 15 of the Existing Master Repurchase Agreement is hereby amended by deleting subsection (b) in its entirety and replacing it with the following:

 

b.                                      Cross Default.  Seller, Guarantor or Affiliates thereof shall be in default under (A) any Indebtedness of Seller, Guarantor or any Affiliate with Buyer or any of its Affiliates; (B) any Indebtedness, in the aggregate, in excess of $1 million of Seller, Guarantor or any Affiliate thereof, which default (x) involves the failure to pay a matured obligation, or (y) permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness, or (C) any other contract or contracts, in the aggregate in excess of $1 million to which Seller, Guarantor or any Affiliate thereof is a party which default (x) involves the failure to pay a matured

 

2

 

obligation, or (y) permits the acceleration of the maturity of obligations by any other party to or beneficiary of such contract.

 

SECTION 6.                            Fees and Expenses.  Seller hereby agrees to pay to Buyer, on demand, any and all reasonable fees, costs and expenses (including reasonable fees and expenses of counsel) incurred by Buyer in connection with the development, preparation and execution of this Amendment, irrespective of whether any transactions hereunder are executed.

 

SECTION 7.                            Conditions Precedent.  This Amendment shall become effective as of the date hereof upon Buyer’s receipt of this Amendment, executed and delivered by a duly authorized officer of Buyer, Seller and Guarantor.

 

SECTION 8.                            Limited Effect.  Except as expressly amended and modified by this Amendment, the Existing Master Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.

 

SECTION 9.                            Counterparts.  This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

 

SECTION 10.                     Severability.  Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

 

SECTION 11.                        GOVERNING LAW.  THE AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

 

SECTION 12.                     Reaffirmation of Guaranty. The Guarantor hereby (i) agrees that the liability of Guarantor or rights of Buyer under the Guaranty shall not be affected as a result of this Amendment, (ii) ratifies and affirms all of the terms, covenants, conditions and obligations of the Guaranty and (iii) acknowledges and agrees that such Guaranty is and shall continue to be in full force and effect.

 

[SIGNATURE PAGE FOLLOWS]

 

3

 

IN WITNESS WHEREOF, the parties have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written.

 

 

	
 
    	
BANK OF AMERICA, N.A.,
    
	
 
    	
as Buyer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Adam Robitshek
    
	
 
    	
 
    	
Name:
    	
Adam   Robitshek
    
	
 
    	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PENNYMAC LOAN SERVICES, LLC,
    
	
 
    	
as Seller
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Pamela Marsh
    
	
 
    	
 
    	
Name:
    	
Pamela Marsh
    
	
 
    	
 
    	
Title:
    	
Executive Vice President, Treasurer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PRIVATE NATIONAL MORTGAGE   ACCEPTANCE COMPANY, LLC,
    
	
 
    	
as Guarantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Pamela Marsh
    
	
 
    	
 
    	
Name:
    	
Pamela Marsh
    
	
 
    	
 
    	
Title:
    	
Executive Vice President, Treasurer
    

 

Signature Page to Amendment No. 8 to Master Repurchase Agreement

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