PFSI PennyMac Financial Services Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

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

 

Date of Report (Date of earliest event reported): September 4, 2024

 

PennyMac Financial Services, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware	001-38727	83-1098934
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 

3043 Townsgate Road, Westlake Village, California	91361
(Address of principal executive offices)	(Zip Code)

 

(818) 224-7442

(Registrant’s telephone number, including area code)

 

Former name or former address, if changed since last report: N/A

 

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:

 

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock, $0.0001 par value		PFSI		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 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 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. ¨

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On September 4, 2024, PennyMac Financial Services, Inc. (the “Company”) and HC Partners LLC entered into the Third Amended and Restated Stockholder Agreement (the “Stockholder Agreement”) to increase the maximum number of directors to serve on the Board from twelve to thirteen. The foregoing description of the Stockholder Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stockholder Agreement, a copy of which is filed as Exhibit 10.1 hereto and 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.

 

Election of Directors. On September 4, 2024, the Board of Directors (the “Board”) of the Company increased the authorized number of directors on the Board from twelve to thirteen directors and, in connection with such increase, elected Sunil Chandra to the Board, effective on September 4, 2024. Mr. Chandra will serve until the Company’s next annual meeting of stockholders or until his successor is duly elected and qualified or until his earlier death, resignation or removal. Mr. Chandra will serve on the Nominating and Corporate Governance Committee and the Risk Committee of the Company’s Board.

 

In consideration for his services as a director of the Company, Mr. Chandra will be entitled to receive compensation on the same terms and in the same amounts as the other independent directors. Accordingly, Mr. Chandra is expected to receive an annual base retainer of $92,500, as well as additional annual committee retainers of $7,750 for serving on the Compensation Committee and $10,000 for serving on the Risk Committee. In connection with his election to the Board, Mr. Chandra will receive a one-time equity grant of $157,500 in restricted stock units under the Company’s 2022 Equity Incentive Plan (with such amount to be prorated based on days of service on the Board during the annual equity award cycle) that vests in full on the first anniversary of the date of grant.

 

In connection with his election, Mr. Chandra will enter into an indemnification agreement with the Company in the same form that the Company has entered into with its other directors. There are no other arrangements or understandings pursuant to which Mr. Chandra, on the one hand, and any other persons, on the other hand, was selected as a director. Mr. Chandra is not a party to any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K and has no family relationship with any director or executive officer of the Company. A copy of the press release announcing the appointment of Mr. Sunil is attached hereto as Exhibit 99.1.

 

Departure of Directors or Certain Officers. On September 4, 2024, James K. Hunt and Emily Youssouf each notified the Company that they plan to retire from the Board effective December 31, 2024. Mr. Hunt currently serves on the Company’s Compensation Committee and Nominating and Corporate Governance Committee.  Ms. Youssouf currently serves on the Company’s Audit Committee and Finance Committee. Mr. Hunt and Ms. Youssouf have each served on the Company’s Board since 2013. Neither Mr. Hunt’s nor Ms. Youssouf’s notice to retire was due to any disagreement with the Company on any matter related to the Company’s operations, policies or practices.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

In connection with Mr. Chandra’s appointment to the Board, effective September 4, 2024, the Board amended Article II, Section 1 of the Company’s Amended and Restated Bylaws (the “Amendment”) of the Company to increase the maximum number of directors to serve on the Board from twelve to thirteen.

 

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed as Exhibit 3.1 hereto and incorporated herein by reference.

 

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit Number		Description
3.1		Amendment to the Amended and Restated Bylaws of PennyMac Financial Services, Inc.
10.1		Third Amended and Restated Stockholder Agreement
99.1		Press Release dated September 4, 2024
104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

* Filed herewith.

 

 

SIGNATURES

 

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.
Date: September 6, 2024	/s/ Daniel S. Perotti
	Daniel S. Perotti
	Senior Managing Director and Chief Financial Officer

 

 

EXHIBIT 3.1

 

AMENDMENT TO

 

AMENDED AND RESTATED

 

BYLAWS

 

OF

 

PENNYMAC FINANCIAL SERVICES, INC.,

 

A Delaware corporation

 

The Amended and Restated Bylaws (the “Bylaws”) of PennyMac Financial Services, Inc., a Delaware corporation, are hereby amended effective as of September 4, 2024 as follows:

 

1.     The first sentence of Article II, Section 1 of the Bylaws is hereby amended and restated in its entirety as follows:

 

“Section 1.        The Board shall consist, subject to the certificate of incorporation of the Corporation and the Stockholder Agreements, of such number of directors as shall from time to time be fixed exclusively by resolution adopted by affirmative vote of the majority of the Board, provided that such number of directors shall not exceed thirteen (13).”

 

2.      Except as set forth above, the remaining provisions of the Bylaws shall not be amended hereby and shall remain in full force and effect.

 

 

 

Exhibit 10.1

 

THIRD AMENDED AND RESTATED STOCKHOLDER AGREEMENT

 

This THIRD AMENDED AND RESTATED STOCKHOLDER AGREEMENT (this “Agreement”), dated as of September 4, 2024, is by and between PennyMac Financial Services, Inc., a Delaware corporation (the “Company”), and HC Partners LLC, a Delaware limited liability company (“HCP”).

 

WHEREAS, the Company and HCP are parties to the Second Amended and Restated Stockholder Agreement, dated as of March 1, 2023 (the “Existing Agreement”);

 

WHEREAS, Section 11 of the Existing Agreement provides that no amendment of the Existing Agreement will be effective against the Company or HCP (each, a “Required Party”) unless such amendment is approved in writing by the party against whom such amendment is to be enforced;

 

WHEREAS, the Required Parties have agreed that the Existing Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Agreement; and

 

WHEREAS, the Required Parties hereto wish to set forth their relative rights and obligations with regard to the elections of the Company’s Board of Directors and certain other rights.

 

NOW, THEREFORE, the Required Parties to this Agreement hereby agree that the Existing Agreement is amended and restated as follows:

 

§1.        DEFINITIONS. For all purposes of this Agreement, the following terms shall have the meanings set forth below:

 

“Affiliate” means, with respect to HCP, (i) any person or entity (including trust(s)) directly or indirectly controlling, controlled by or under direct or indirect common control with HCP, (ii) any person or entity (including trust(s)) who is or was a member or other owner of HCP and has received a distribution of securities of the Company or its subsidiary from HCP, and (iii) each HCP Charitable Entity. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under direct or indirect common control with”), as applied to any entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that entity, whether through the ownership of voting securities, by contract or otherwise.

 

“HCP Charitable Entity” means each tax-exempt private foundation or public charity created by HCP or any of its Affiliates or principals, or with respect to which HCP or any of its Affiliates or principals is a disqualified person, and each sponsoring organization which maintains a donor advised fund which is separately identified by reference to contributions of HCP or any of its Affiliates or principals (as such terms are defined in the Internal Revenue Code of 1986, as amended).

 

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

 

“Nomination Date” means the date that is (i) 60 calendar days prior to the scheduled date of the annual or special meeting at which the directors of the Company are to be elected, or (ii) 30 calendar days prior to the date on which the initial solicitation of written consents in respect of the election of directors of the Company is scheduled.

 

“Shares” means shares of Common Stock of the Company held by HCP or its Affiliates.

 

“Voting Power” means the voting power of all of the then-outstanding shares of Common Stock of the Company with respect to matters on which stockholders generally are entitled to vote.

 

 

§2.          BOARD OF DIRECTORS; COMMITTEES.

 

2.1            Board Nomination Rights. In any and all elections of directors of the Company (whether at a meeting or by written consent in lieu of a meeting), HCP shall have the right to nominate for election to the Board (i) two individuals if HCP, together with its Affiliates, beneficially holds Shares constituting 15% or more of the Voting Power as of the applicable Nomination Date and (ii) one individual if HCP, together with its Affiliates, beneficially holds Shares constituting 10% or more of the Voting Power as of the applicable Nomination Date; provided, however, that no Shares held or beneficially owned directly or indirectly by any entity that is an HCP Charitable Entity may or shall be included when calculating such 15% and/or 10% thresholds.

 

2.2            Board Nomination Procedures. To exercise its board nomination rights hereunder, HCP shall provide written notice to the Company no later than the applicable Nomination Date of the individual(s) that it has a right to nominate hereunder, which notice shall also contain all information with respect to each such individual that will be required to be included in the proxy statement to be circulated in respect of the election of such individual, provided that if HCP fails to provide written notice of its nominees prior to the Nomination Date, the directors nominated by HCP at the most recent election of directors of the Company shall be deemed nominated for purposes of this Section 2.2 as long as they remain eligible pursuant to laws and regulations applicable to the Company, and are willing, to serve as directors. Following the timely receipt of such written notice, the Company, provided that each such nominee is reasonably acceptable to the Board (not including the vote of such nominee for this purpose), shall (i) include such individual(s) as nominee(s) in the proxy statement and other proxy materials circulated with respect to the applicable election of directors, (ii) recommend in such proxy statement and materials that the stockholders of the Company vote in favor of the election of such nominee(s) to the Board, and (iii) otherwise use its best efforts to cause such nominee(s) to be elected to the Board.

 

2.3            Maximum Number of Directors. At all times prior to the termination of this Agreement, the Company shall cause the Board to consist of no more than 13 directors.

 

2.4            Committee Nomination Rights. As long as HCP is entitled to nominate at least one individual for election to the Board and at least one HCP nominee is serving as a director on the Board pursuant to this Agreement, each committee and subcommittee of the Board shall include one HCP designee as shall be specified by HCP from time to time if HCP elects to have an HCP designee serve on such committee or subcommittee, provided that such director is qualified to serve on such committee or subcommittee under the laws and regulations applicable to the Company, including, without limitation, the independence requirements of the New York Stock Exchange and the Securities and Exchange Commission.

 

2.5            Certificate of Incorporation and Bylaws Consistent. The Company shall use its best efforts to take or cause to be taken all lawful action necessary or appropriate to ensure that at all times neither the Certificate of Incorporation nor the Bylaws of the Company, nor any of the corresponding constituent documents of the Company’s subsidiaries contain any provisions inconsistent with the terms of this Agreement (including, without limitation, this Section 2) or which would in any way nullify or impair the terms of this Agreement or the rights of HCP hereunder. The Company shall not take or cause to be taken any action inconsistent with the terms of this Agreement (including without limitation this Section 2) or the rights of HCP hereunder.

 

§3.          CONSENT RIGHTS.

 

3.1            Agreements with Other Stockholders. In the event that the Company enters into or amends, modifies or waives (as distinct from a consent or approval provided for therein) any provision of a stockholder agreement between the Company and any other stockholder that involves the grant of rights to a stockholder that are superior, taking into account the impact of differences in levels of stockholding, regulatory status, noncompetition provisions and other similar matters (the “Contractual Superior Rights”), to those belonging to HCP under this Agreement, the Company shall offer HCP the opportunity to obtain such Contractual Superior Rights. The Company shall notify HCP prior to the time such rights become effective and shall afford it the opportunity for at least 20 days to determine whether or not it wishes to obtain such Contractual Superior Rights.

 

3.2            Charter Amendments. The Certificate of Incorporation of the Company, as amended from time to time in accordance with this Agreement (the “Charter”) shall not be amended in any manner that is adverse to HCP or its Affiliates without the prior written consent of HCP if HCP and its Affiliates hold, at the time of such amendment or repeal, Shares constituting 5% or more of the Voting Power. Article IX of the Charter shall not be amended or repealed, and no provision that is inconsistent with such Article IX shall be adopted, in any manner without the prior written consent of HCP if HCP and its Affiliates hold any Shares at such time.

 

 

3.3            By-law Amendments. The by-laws of the Company shall not be amended or repealed in any manner that is adverse to HCP or its Affiliates without the prior written consent of HCP if HCP and its Affiliates hold, at the time of such amendment or repeal, Shares constituting 5% or more of the Voting Power.

 

§4.          RESERVED.

 

§5.          AGGREGATION OF AFFILIATES. Notwithstanding anything in this Agreement to the contrary, if voting power of shares of stock of the Company is held by HCP and one or more of its Affiliates (excluding any HCP Charitable Entity), or by more than one Affiliate of HCP (excluding any HCP Charitable Entity), then all nominations, consents and actions required or permitted to be given, made or taken by HCP pursuant to this Agreement shall be given, made or taken by the parties holding a majority of such voting power held by HCP and its Affiliates (excluding any HCP Charitable Entity). The Company and its officers shall be entitled to rely on any notice, consent, waiver or instructions executed by either (i) such parties holding a majority of such voting power or (ii) by the HCP Designee if such designee certifies that the requisite approval of such parties has been obtained, without inquiry and without requiring substantiating evidence of any kind. HCP shall be the initial “HCP Designee.” The party acting as the HCP Designee may be changed by HCP by providing notice of such change to the Company.

 

§6.          SEVERABILITY. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

§7.          ENTIRE AGREEMENT. Except as otherwise expressly set forth herein, this document embodies the complete agreement and understanding among the Required Parties hereto with respect to the subject matter hereof and thereof and supersedes and preempts any prior understandings, agreements or representations by or among the Required Parties, written or oral, which may have related to the subject matter hereof in any way.

 

§8.          SUCCESSORS AND ASSIGNS. This Agreement will bind and inure to the benefit of and be enforceable by the Company and HCP and their respective successors and permitted assigns.

 

§9.          COUNTERPARTS. This Agreement may be executed in separate counterparts each of which will be an original and all of which taken together will constitute one and the same agreement.

 

§10.       NOTICES. Any notice provided for in this Agreement will be in writing and will be deemed properly delivered if either personally delivered or sent by overnight courier or mailed certified or registered mail, return receipt requested, postage prepaid to the recipient (a) if to HCP, at HC Partners LLC, 59th Floor, John Hancock Tower, 200 Clarendon St., Boston MA 02116, Attention: Jonathon S. Jacobson and Jennifer L. Stier, or at any other address provided by HCP and (b) if to the Company, at 3043 Townsgate Road, Westlake Village, California 91361, Attention: Derek W. Stark, with a copy to Goodwin Procter LLP, 601 Marshall Street, Redwood City, California 94063, Attention: Bradley C. Weber. Any such notice shall be effective (i) if delivered personally, when received, (ii) if sent by overnight courier, when receipted for, and (iii) if mailed, 3 days after being mailed as described above.

 

 

§11.          AMENDMENT AND WAIVER. No modification, amendment or waiver of any provision of this Agreement will be effective against the Company or HCP unless such modification, amendment or waiver is approved in writing by the party against whom such modification, amendment or waiver is to be enforced. The failure of any party to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.

 

§12.          TERMINATION. This Agreement will terminate at such time as HCP, together with its Affiliates, first fails to beneficially hold any equity securities of the Company.

 

§13.          GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

§14.          DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

 

§15.          CONSTRUCTION. The language used in this Agreement will be deemed to be the language chosen by the Required Parties to express their mutual intent, and no rule of strict construction will be applied against any party.

 

[Remainder of page intentionally left blank.]

 

 

IN WITNESS WHEREOF, the Required Parties hereto have executed this Third Amended and Restated Stockholder Agreement on the day and year first above written.

 

	PENNYMAC FINANCIAL SERVICES, INC.
	By:	/s/ Derek W. Stark
	Name:	Derek W. Stark
	Title:	Senior Managing Director, Chief Legal Officer and Secretary
	HC PARTNERS LLC
	By:	/s/ Jennifer Stier
	Name:	Jennifer Stier
	Title:	Manager

 

 

 

Exhibit 99.1

 

 

PennyMac Financial Services, Inc. Announces

Changes To Its Board of Directors

 

WESTLAKE VILLAGE, Calif. – September 6, 2024 – PennyMac Financial Services, Inc. (NYSE: PFSI) announced today that Sunil Chandra, a technology and financial services expert, has joined its Board of Directors and that James Hunt and Emily Youssouf will retire effective December 31, 2024.

 

“I am extraordinarily grateful to both Jim and Emily for their long service on our Board of Directors, and for their ongoing commitment to and passion for our business,” said Chairman and Chief Executive Officer David Spector. “Both joined our Board more than 10 years ago, serving on multiple different committees and helping to enable Pennymac’s significant growth and transformation into a leading mortgage company. Their invaluable guidance, expertise, and institutional knowledge will be greatly missed and I would like to congratulate them both on their upcoming retirements.”

 

Mr. Spector continued, “As we begin this transition, we are thrilled to welcome Sunil Chandra to our Board. His remarkable leadership experience in technology, financial services, and global operations, combined with his innovative approach to business will bring a unique perspective to our Board. We are eager to see the significant contributions he will make at Pennymac.”

 

Mr. Chandra’s distinguished career spans several leading global organizations. He is the Founder and Chief Executive Officer of Dyme.Earth, a pioneering climate fintech company focused on reducing carbon emissions through innovative business travel solutions. Previously, he served as Chief Executive Officer of OakNorth, where he led its AI-powered credit platform managing over $17 billion in assets. Mr. Chandra also held the role of Vice President at Google, where he played a crucial role in expanding the company’s global workforce. His earlier career includes serving as Chief Operating Officer (Technology) at Barclays Capital and as Director of Administration for Southeast Asia and Greater China at McKinsey & Co. Mr. Chandra holds a Bachelor of Engineering in Computer Engineering from the University of Wollongong, Australia, and an MBA in Technology Management from APESMA, Sydney.

 

 

About PennyMac Financial Services, Inc.

 

PennyMac Financial Services, Inc. is a specialty financial services firm focused on the production and servicing of U.S. mortgage loans and the management of investments related to the U.S. mortgage market. Founded in 2008, the company is recognized as a leader in the U.S. residential mortgage industry and employs approximately 3,900 people across the country. For the twelve months ended June 30, 2024, PennyMac Financial’s production of newly originated loans totaled $101 billion in unpaid principal balance, making it a top lender in the nation. As of June 30, 2024, PennyMac Financial serviced loans totaling $633 billion in unpaid principal balance, making it a top mortgage servicer in the nation. Additional information about PennyMac Financial Services, Inc. is available at pfsi.pennymac.com.

 

Media	Investors
Lauren Padilla	Kevin Chamberlain
mediarelations@pennymac.com	Isaac Garden
805.225.8224	PFSI_IR@pennymac.com
	818.224.7028

 

 

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Entity Registrant Name	PennyMac Financial Services, Inc.
Entity Central Index Key	0001745916
Entity Tax Identification Number	83-1098934
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	3043 Townsgate Road
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Title of 12(b) Security	Common Stock, $0.0001 par value
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---