STONEGATE MORTGAGE CORPORATION (NYSE:SGM) Files An 8-K Material Modification to Rights of Security Holders

STONEGATE MORTGAGE CORPORATION (NYSE:SGM) Files An 8-K Material Modification to Rights of Security Holders

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Item3.03 Material Modification to Rights of Security Holders.

On January26, 2017, Stonegate Mortgage Corporation, an Ohio
corporation (the Company), entered into an Agreement and Plan of
Merger (the Merger Agreement) with Home Point Financial
Corporation, a New Jersey Corporation (Home Point) and Longhorn
Merger Sub, Inc. an Ohio corporation and wholly owned subsidiary
of Home Point (Merger Sub), to which, Merger Sub will merge with
and into the Company, with the Company as the surviving entity
(the Merger).

In connection with the entry by the Company into the Merger
Agreement, on January26, 2017, the Board of the Company adopted a
Tax Asset Protection Plan (the Plan) with Broadridge Corporate
Issuer Solutions, Inc., as Rights Agent. As of September30, 2016,
the Company had approximately $163.5million in net operating loss
carryforwards (collectively, the NOLs) for U.S. federal income
tax purposes.

The Plan is designed to mitigate the potential for an ownership
change within the meaning of Section382 of the Internal Revenue
Code of 1986, as amended (the Code), prior to the consummation of
the Merger. As described further below, the Plan will terminate
if the Merger Agreement is terminated in accordance with its
terms, or immediately prior to the consummation of the Merger. If
the Company were to experience an ownership change within the
meaning of Section382 of the Code prior to the consummation of
the Merger, Home Points ability to utilize the NOLs to offset
future taxable income following the consummation of the Merger
could be significantly limited. In general, an ownership change
would occur if the Companys 5-percent shareholders, as defined
under Section382 of the Code, collectively increase their
ownership of the Company, in relation to their respective
historical low points, by more than 50 percentage points over a
rolling three-year period.

In connection with the adoption of the Plan, the Board declared a
dividend of one preferred share purchase right (a Right) to
purchase one ten-thousandth of a share of a
series of newly designated preferred stock in connection with the
Plan (the Preferred Stock) for each share of Company Common Stock
outstanding at the close of business on February6, 2017 (the
Record Time), or issued thereafter and prior to the Separation
Time (as defined below). In general, the Rights will work to
impose a significant penalty upon any person or group which
becomes the beneficial owner of 4.9% or more of Company Common
Stock or upon any 4.9% or greater holder which becomes the
beneficial owner of additional shares of Company Common Stock, in
each case, without the approval of the Board. There is no
guarantee, however, that the Plan will prevent the Company from
experiencing an ownership change, and therefore having a
limitation on its ability to utilize its NOLs.

The Rights will be
evidenced by either the registration of shares of Company Common
Stock on the stock transfer books of the Company or by Company
Common Stock certificates until the next business day following
the earlier of (i) the tenth business day (or such later date as
determined by the Board) after the date on which any person
commences a tender or exchange offer that, if consummated, would
result in such persons becoming an Acquiring Person (as defined
below) and (ii)the date of the first event causing a Flip-in Date
(as defined below) to occur (the Separation Time). A Flip-in Date
will occur on any Stock Acquisition Date (as defined below) or
such later date and time as the Board may from time to time fix
by resolution adopted prior to the Flip-in Date that would
otherwise have occurred. A Stock Acquisition Date means the first
date on which there is a public announcement by the Company or an
Acquiring Person that a person has become an Acquiring Person. An
Acquiring Person is any person who is or becomes the Beneficial
Owner (as defined below) of 4.9% or more of the outstanding
shares of Company Common Stock at any time after the first public
announcement of the Plan; provided, however, that the term
Acquiring Person will not include:

(i) any person who is the Beneficial Owner of 4.9% or more of the
outstanding shares of Company Common Stock at the time of the
first public announcement of the adoption of the Plan and who
continuously thereafter is the Beneficial Owner of 4.9% or
more of the outstanding shares of Company Common Stock, until
such time thereafter as such person becomes the Beneficial
Owner (other than by means of a stock dividend, stock split
or reclassification) of additional shares of Company Common
Stock;
(ii)

any person who becomes the Beneficial Owner of 4.9% or more
of the outstanding shares of Company Common Stock after the
time of the first public announcement of the Plan solely as
a result of (A)an

acquisition by the Company of shares of Company Common Stock,
or (B)an acquisition directly from the Company in a
transaction which duly authorized officers of the Company
have determined shall not result in the creation of an
Acquiring Person under the Plan, until, in each case, such
time thereafter as such person becomes the Beneficial Owner
(other than by means of a stock dividend, stock split or
reclassification) of additional shares of Company Common
Stock while such person is or as a result of which such
person becomes the Beneficial Owner of 4.9% or more of the
outstanding shares of Company Common Stock;
(iii) any person who the Board determines, in its sole discretion,
has inadvertently become the Beneficial Owner of 4.9% or more
of the outstanding shares of Company Common Stock, if such
person promptly divests, or promptly enters into an agreement
with, and satisfactory to, the Board, in the Boards sole
discretion, to divest, and subsequently divests in accordance
with the terms of such agreement (without exercising or
retaining any power, including voting power, with respect to
such shares), sufficient shares of Company Common Stock (or
securities convertible into, exchangeable into or exercisable
for Company Common Stock) so that such person ceases to be
the Beneficial Owner of 4.9% or more of the outstanding
shares of Company Common Stock; or
(iv) any person determined by the Board to be an Exempt Person in
accordance with the Plan for so long as such person complies
with any limitations or conditions required by the Board in
making such determination.

A person shall be
deemed the Beneficial Owner, and to have Beneficial Ownership of,
and to Beneficially Own, any securities (i)which such person is
considered to own under general federal income tax principles for
purposes of Section382 of the Code and the U.S. Treasury
regulations promulgated thereunder, (ii)which such person would
be deemed to indirectly or constructively own for purposes of
Section382 of the Code and the U.S. Treasury regulations
promulgated thereunder or (iii)which any other person
Beneficially Owns, but only if such person and such other person
are part of the same group of persons that, with respect to such
security, are treated as one entity as defined under U.S.
Treasury Regulation 1.382-3(a)(1), provided that for the purposes
of determining Beneficial Ownership, any options within the
meaning of Section382 of the Code and the Treasury Regulations
promulgated thereunder will be deemed to be exercised.

Furthermore, the
Board must, within 10 business days of receiving an exemption
request, exempt (i)a proposed transfer that does not cause any
aggregate increase in the Beneficial Ownership of persons with
Beneficial Ownership of 4.9% of the Company Common Stock and any
other class of stock, as defined for purposes of Section382 of
the Code (Stock) then outstanding (a Five Percent Shareholder)
over the lowest Beneficial Ownership of Stock by such Five
Percent Shareholders (as determined immediately before the
proposed transfer) at any time during the relevant testing
period, in all cases for purposes of Section382 of the Code or
(B)a proposed acquisition by any Existing Holder if such proposed
acquisition and all prior and anticipated acquisitions or
transactions effected or expected to be effected during the
relevant testing period do not result in an aggregate owner shift
(as defined in the Code) of more than 35%.

The Plan provides
that, until the Separation Time, the Rights will be transferred
with and only with the Common Stock, and will be evidenced by
either the registration of the Common Stock on the stock transfer
books of the Company, or a certificate for Common Stock, if
issued. Following the Separation Time, separate certificates
evidencing the Rights (Rights Certificates) will be delivered to
holders of record of Common Stock at the Separation Time.

The Plan provides
that, until the Separation Time, the Rights will be transferred
with and only with the Company Common Stock, and will be
evidenced by either the registration of the Company Common Stock
on the stock transfer books of the Company or a Company Common
Stock certificate. Following the Separation Time, separate
certificates evidencing the Rights (Rights Certificates)
will be delivered to holders of record of Company Common Stock at
the Separation Time.

The Rights will
not be exercisable until the Separation Time. On or after the
Separation Time and prior to the Expiration Time (as defined
below), each Right would initially entitle the holder to
purchase, for $24.00 (the

Exercise
Price
), one ten-thousandth of a share of Preferred Stock. The
Preferred Stock will be designed so that each one ten-thousandth of a share has
economic and voting terms similar to those of one share of
Company Common Stock.

The Exercise Price and the
number of Rights outstanding, or in certain circumstances the
securities purchasable upon exercise of the Rights, are subject
to adjustment from time to time to prevent dilution in the event
of a stock dividend on, or a subdivision or a combination into a
smaller number of shares of, Company Common Stock, or the
issuance or distribution of any securities or assets in respect
of, in lieu of or in exchange for Company Common
Stock.

In the event that prior to the
Expiration Time a Flip-in Date occurs, each Right (other than
Rights Beneficially Owned on the Stock Acquisition Date or
thereafter acquired by an Acquiring Person or any affiliate
thereof, which Rights shall become void) shall constitute the
right to purchase from the Company, upon the exercise thereof in
accordance with the terms of the Plan, that number of shares of
Company Common Stock having an aggregate Market Price (as defined
in the Plan) on the Stock Acquisition Date that gave rise to the
Flip-in Date equal to twice the Exercise Price for an amount in
cash equal to the then current Exercise Price. In addition, the
Board may, at its option, at any time after a Flip-in Date and to
the extent permitted by law, elect to exchange all (but not less
than all) of the then outstanding Rights (other than Rights
Beneficially Owned by the Acquiring Person or any affiliate
thereof, which Rights shall become void) for shares of Company
Common Stock at an exchange ratio of one share of Company Common
Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the
Separation Time (the Exchange Ratio). Immediately upon such
action by the Board (the Exchange Time), the right to exercise
the Rights will terminate and each Right will thereafter
represent only the right to receive a number of shares of Company
Common Stock equal to the Exchange Ratio.

Whenever the Company shall
become obligated, as described in the preceding paragraph, to
issue shares of Company Common Stock upon exercise of or in
exchange for Rights, the Company, at its option, may substitute
therefor shares of Preferred Stock, at a ratio of one
ten-thousandth of a share of Preferred Stock for each share of
Company Common Stock so issuable.

The Board may, at its option,
at any time, redeem all (but not less than all) of the then
outstanding Rights at a price of $0.001 per Right (the Redemption
Price), as provided in the Plan. Immediately upon the action of
the Board electing to redeem the Rights, without any further
action and without any notice, the right to exercise the Rights
will terminate and each Right will thereafter represent only the
right to receive the Redemption Price in cash or securities for
each Right so held.

The Merger Agreement provides
that under certain circumstances, the Board may not redeem, amend
or terminate the Plan, or approve any exemption request, without
the prior written consent of Home Point.

The Rights will expire on the
earliest of (i)the Exchange Time, (ii)the date on which the
Rights are redeemed as described above, (iii)the time at which
the Board receives, at the Boards request, a report from the
Companys advisors that the NOLs are utilized in all material
respects or no longer available in any material respect under
Section382 of the Code or any applicable state law or that an
ownership change under Section382 of the Code would not adversely
impact in any material respect the time period in which the
Company could use the NOLs, or materially impair the amount of
the NOLs that could be used by the Company in any particular time
period, for applicable tax purposes, (iv)immediately prior to the
consummation of the Merger and (v)the later of (1)the close of
business on January26, 2018, the first anniversary of the date of
this Plan or (2)the termination of the Merger Agreement in
accordance with its terms (in any such case, the Expiration
Time).

The holders of Rights will,
solely by reason of their ownership of Rights, have no rights as
stockholders of the Company, including, without limitation, the
right to vote or to receive dividends.

As of January27, 2017, there
are an estimated 25,854,022 shares of Company Common Stock
outstanding.

The foregoing descriptions of
the Plan, the Rights and the Preferred Stock do not purport to be
complete and are qualified in their entirety by reference to the
Plan (which includes as Exhibit A the forms of Rights Certificate
and Election to Exercise and as Exhibit B the form of Certificate
of Designation and Terms of the Preferred Stock), which is filed
as Exibit 4.1 hereto and incorporated herein.

Item8.01 Other Events.

On January27, 2017, the
Company and Home Point issued a joint press release announcing
the execution of the Merger Agreement and the Plan. A copy of the
joint press release is attached hereto as Exhibit99.1 and is
incorporated by reference herein.

Cautionary
Statement Regarding Forward-Looking
Statements

This Current Report on Form
8-K contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
that are intended to be protected by the safe harbor provided
therein. We generally identify forward-looking statements,
particularly those statements regarding the benefits of the
proposed Merger between Home Point and the Company, the
anticipated timing of the transaction and the business of each
company, by terminology such as outlook, believes, expects,
potential, continues, may, will, would, could, should, seeks,
approximately, predicts, intends, plans, estimates, anticipates,
projects, strategy, future, opportunity, will likely result or
the negative version of those words or other comparable words.
These forward-looking statements are not historical facts, and
are based on current expectations, estimates and projections
about our industry, managements beliefs and certain assumptions
made by management, many of which, by their nature, are
inherently uncertain and beyond our control. Accordingly, you are
cautioned that any such forward-looking statements are not
guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to
predict.

A number of important factors
could cause actual results to differ materially from those
indicated by the forward-looking statements in this Current
Report on Form 8-K, including, but not limited to: the risk that
the Merger may not be completed in a timely manner or at all,
which may adversely affect the Companys business and the price of
the Company Common Stock; required governmental approvals of the
Merger may not be obtained or may not be obtained on the terms
expected or on the anticipated schedule; the Companys
stockholders may fail to approve the Merger; the parties to the
Merger Agreement may fail to satisfy other conditions to the
completion of the Merger, or may not be able to meet expectations
regarding the timing and completion of the Merger; the occurrence
of any event, change or other circumstance that could give rise
to the termination of the Merger Agreement; the effect of the
announcement or pendency of the Merger on the Companys business
relationships, operating results, and business generally; risks
that the proposed Merger disrupts current plans and operations of
the Company and potential difficulties in the Companys employee
retention as a result of the Merger; risks related to diverting
managements attention from the Companys ongoing business
operations; the outcome of any legal proceedings that may be
instituted against the Company related to the Merger Agreement or
the Merger; the amount of unexpected costs, fees, expenses and
other charges related to the Merger; the impact of changes in
interest rates; and political instability. For additional factors
that could materially affect our financial results and our
business generally, please refer to the Companys filings with the
SEC, including but not limited to, the factors, uncertainties and
risks described under the headings Risk Factors and Managements
Discussion and Analysis of Financial Condition and Results of
Operations. The Company undertakes no obligation to revise these
statements following the date of this Current Report on Form 8-K,
except as required by law.

Additional
Information and Where to Find It

This Current Report on Form
8-K may be deemed to be solicitation material in respect of the
proposed Merger between the Company and Home Point. In connection
with the Merger, the Company intends to file relevant materials
with the SEC, including a proxy statement on Schedule 14A.
INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO
READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE
COMPANYS PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED MERGER.
Investors and
stockholders will be able to obtain copies of the documents, when
filed, free of charge at the SECs website (http://www.sec.gov).
Investors and stockholders may also obtain copies of documents
filed by the Company with the SEC by writing to Stonegate
Mortgage Corporation, Attention: Secretary, 9190 Priority Way
West Drive, Suite 300, Indianapolis, IN 46240, United States, or
by visiting the Companys website
(www.stonegatemtg.com).

Participants in
Solicitation

The Company and its directors,
executive officers and other members of management and employees
may be deemed to be participants in the solicitation of proxies
from the holders of the Company Common Stock in connection with
the proposed Merger. Information about the Companys directors and
executive officers is available in the Companys proxy statement
for its 2016 Annual Meeting of Stockholders, which was filed with
the SEC on May19, 2016. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement and other relevant
materials to be filed with the SEC regarding the proposed merger
when they become available. Investors and stockholders should
read the proxy statement carefully when it becomes available
before making any investment or voting decisions.

Item9.01 Financial Statements and Exhibits.
(d) Exhibits.

Exhibit No.

Description of Exhibit

4.1 Tax Asset Protection Plan, dated as of January26, 2017,
between Stonegate Mortgage Corporation and Broadridge
Corporate Issuer Solutions, Inc., as Rights Agent, including
as Exhibit A the forms of Rights Certificate and of Election
to Exercise and as Exhibit B the form of Certificate of
Designation and Terms of the Participating Preferred Stock of
Stonegate Mortgage Corporation.
99.1 Joint Press Release, dated January26, 2017.


About STONEGATE MORTGAGE CORPORATION (NYSE:SGM)

Stonegate Mortgage Corporation is a non-bank mortgage company. The Company is focused on originating, financing and servicing the United States residential mortgage loans. The Company’s segments include Originations, Servicing, Financing and Other. The Originations segment primarily originates and sells residential mortgage loans, which conform to the underwriting guidelines of the government sponsored enterprises and government agencies, and non-agency whole loan investors. The Servicing segment includes loan administration, collection and default activities, including the collection and remittance of loan payments, responding to customer inquiries, collection of principal and interest payments, holding custodial funds for the payment of property taxes and insurance premiums, counseling delinquent mortgagors and modifying loans. The Financing segment includes warehouse-lending activities to correspondent customers by the Company’s subsidiary, NattyMac, LLC.

STONEGATE MORTGAGE CORPORATION (NYSE:SGM) Recent Trading Information

STONEGATE MORTGAGE CORPORATION (NYSE:SGM) closed its last trading session 00.00 at 5.95 with 8,801 shares trading hands.

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