Exhibit 10.4

THE PMI GROUP, INC.

SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN

EFFECTIVE APRIL 1, 1995

(Amended and Restated as of September 1, 2007)

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TABLE OF CONTENTS

 

          Page

ARTICLE I DEFINITIONS

   1

1.01

   “Account”    1

1.02

   “Active Participant”.    1

1.03

   “Affiliate”    1

1.04

   “Board”    1

1.05

   “Change in Control Event”    1

1.06

   “Committee”    3

1.07

   “Company”    3

1.08

   “Contribution Credits”    3

1.09

   “Covered Compensation”    3

1.10

   “Disability” or “Disabled”    3

1.11

   “Employer”    4

1.12

   “Final Average Compensation”    4

1.13

   “Interest Credits”    4

1.14

   “Participant”    4

1.15

   “Plan”    4

1.16

   “Retirement Plan Benefits”    4

1.17

   “Retirement Plan”    4

1.18

   “Retired Participant”    4

1.19

   “Separation from Service”    4

1.20

   “Specified Participant”    5

1.21

   “Spouse”    5

1.22

   “Termination”    5

1.23

   “Trust”    5

1.24

   “Valuation Date”    5

1.25

   “Year of Benefit Accrual Service”    5 ARTICLE II INTRODUCTION    5

2.01

   Purpose    5

2.02

   Administration    6

ARTICLE III ELIGIBILITY AND AMOUNT OF BENEFITS

   6

3.01

   Eligibility    6

3.02

   Amount of Benefit    6

3.03

   Preretirement Surviving Spouse Benefit    7

3.04

   Death Benefits After Retirement    7

 

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TABLE OF CONTENTS

(Continued)

 

     Page

ARTICLE IV PAYMENT OF BENEFITS

   7

4.01

   Payment of Benefits    7

4.02

   Benefit Payment Election    8

4.03

   Required Six-Month Delay of Payment to a Specified Participant    8

4.04

   Retirement Plan Termination    8

4.05

   Retirement Plan Benefits    8

4.06

   Facility of Payment    9

4.07

   Review of Benefit Determinations    9

4.08

   Payment and Funding of Benefits    9

4.09

   Contributions to Trust Upon a Change in Control Event    9

ARTICLE V MISCELLANEOUS

   9

5.01

   Action by Company    9

5.02

   Amendment and Plan Termination    9

5.03

   No Effect on Employment    10

5.04

   Assignment of Benefits    10

5.05

   Construction    10

5.06

   Account Statements    10

5.07

   Applicable Law    10

5.08

   Governing State Law; Severability    10

5.09

   Number    10

5.10

   Participation of Affiliates    10

5.11

   Indemnification    11

5.12

   Income Inclusion Under Section 409A of the Code    11

5.13

   No Guarantees Regarding Tax Treatment    11

EXECUTION

   11

 

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ARTICLE I

DEFINITIONS

1.01 “Account” means a hypothetical account balance established and maintained
for each Participant which will be credited or debited, as the case may be, with
Contribution Credits, Interest Credits and any payments pursuant to Article IV.
A Participant’s Account is a nominal account, and is used to determine the
amount of retirement benefits payable under the cash balance aspect. The
Participant shall have no actual individual account, and shall have no claim to
any particular assets of the Plan. The Participant’s Account will be charged
with the amount of any distributions paid to him or her under the Plan based on
benefits payable under Article IV.

1.02 “Active Participant” means Active Participant as defined under the
Retirement Plan.

1.03 “Affiliate” means each corporation, trade or business which is, together
with any Employer, a member of a controlled group of corporations or an
affiliated service group or under common control (within the meaning of section
414(b), (c) or (m) of the Code), but only for the period during which such other
entity is so affiliated with the Employer. Notwithstanding the foregoing, in
applying sections 1563(a)(1), (2) and (3) of the Code for purposes of
determining a controlled group of corporations under section 414(b) of the Code
and in applying Treasury regulation section 1.414(c)-2 for purposes of
determining trades or businesses that are under common control for purposes of
section 414(c) of the Code, the phrase “at least 50 percent” will be used
instead of “at least 80 percent” at each place it appears in such sections.

1.04 “Board”

means the Board of Directors of the Company, as constituted from time to time,
except that any action that could be taken by the Board of Directors may also be
taken by a duly authorized Committee of the Board of Directors.

1.05 “Change in Control Event” means a change in the ownership of the Company, a
change in the effective control of the Company, or a change in the ownership of
a substantial portion of the assets of the Company as determined in accordance
with section 409A(a)(2)(A)(v) of the Code and Treasury regulation section
1.409A-3(i)(5), and as set forth below:

(a) A change in the ownership of the Company occurs on the date that any one
person or more than one person acting as a group (a “Person”), acquires
ownership of the stock of the Company that, together with the stock held by such
Person, constitutes more than fifty percent (50%) of the total fair market value
or total voting power of the stock of the Company; provided, however, that for
purposes of this subsection (a), the acquisition of additional stock by any one
Person who is considered to own more than fifty percent (50%) of the total fair
market value or total voting power of the stock of the Company shall not be
considered to cause a change in the

 

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ownership of the Company (or to cause a change in the effective control of the
Company within the meaning of subsection (b) below). An increase in the
percentage of stock owned by any one Person as a result of a transaction in
which the Company acquires its stock in exchange for property shall be treated
as an acquisition of stock for purposes of this subsection (a). This subsection
(a) applies only when there is a transfer of stock of the Company (or issuance
of stock of the Company) and the Company’s stock remains outstanding after the
transaction;

(b) A change in the effective control of the Company occurs on the date that
either: (1) any one Person acquires (or has acquired during the 12-month period
ending on the date of the most recent acquisition by such Person) ownership of
the stock of the Company possessing thirty percent (30%) or more of the total
voting power of the stock of the Company; or (2) a majority of the members of
the Board of Directors is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Board of Directors prior to the date of the appointment or election. A change in
effective control also may occur in a transaction in which either of the two
corporations involved in the transaction has a Change in Control Event under
subsection (a) above or (c) below. For purposes of this subsection (b), if any
one Person is considered to effectively control the Company within the meaning
of this subsection (b), the acquisition of additional control of the Company by
such Person shall not be considered to cause a change in the effective control
of the Company (or to cause a change in the ownership of the Company within the
meaning of subsection (a) above); or

(c) A change in the ownership of a substantial portion of the Company’s assets
occurs on the date that any one Person acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such
Person) assets from the Company that have a total gross fair market value equal
to or more than forty percent (40%) of the total gross fair market value of all
of the assets of the Company immediately prior to such acquisition or
acquisitions. For this purpose, “gross fair market value” means the value of the
assets of the Company, or the value of the assets being disposed of, determined
without regard to any liabilities associated with such assets. However, there is
no Change in Control Event under this subsection (c) when there is a transfer of
assets of the Company to an entity that is controlled by the shareholders of the
Company immediately after the transfer, as provided below. A transfer of assets
by the Company shall not be treated as a change in the ownership of such assets
if the assets are transferred to: (1) a shareholder of the Company (immediately
before the asset transfer) in exchange for or with respect to the Company’s
stock; (2) an entity, fifty percent (50%) or more of the total value or voting
power of which is owned, directly or indirectly, by the Company; (3) a Person,
that owns, directly or indirectly, fifty percent (50%) or more of the total
value or voting power of all the outstanding stock of the Company; or (4) an
entity, at least fifty percent (50%) of the total value or voting power of which
is owned, directly or indirectly, by a Person described in clause (3) above. For
purposes of this subsection (c) and except as otherwise provided, a person’s
status is determined immediately after the transfer of the assets.

For purposes of this Section 1.05, persons will not be considered to be acting
as a group solely because they purchase or own stock of the Company at the same
time. However, persons will

 

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be considered to be acting as a group if they are owners of a corporation that
enters into a merger, consolidation, purchase or acquisition of stock, or
similar business transaction with the Company, and if a person, including an
entity, owns stock in both the Company and another corporation and the Company
and the other corporation enter into a merger, consolidation, purchase or
acquisition of stock, or similar transaction, such shareholder is considered to
be acting as a group with other shareholders only with respect to the ownership
in the Company before the transaction giving rise to the change and not with
respect to the ownership interest in the other corporation. Section 318(a) of
the Code also applies to determine stock ownership. Stock underlying a vested
option is considered owned by the individual who holds the vested option (and
the stock underlying an unvested option is not considered owned by the
individual who holds the unvested option); provided, however, that if a vested
option is exercisable for stock that is not substantially vested (as defined by
Treasury regulation sections 1.83-3(b) and (j)), the stock underlying the option
is not treated as owned by the individual who holds the option.

1.06 “Committee” means the Committee under the PMI Retirement Plan.

1.07 “Company” means The PMI Group, Inc., a Delaware corporation, or any
successor thereto and any Affiliate to the extent required.

1.08 “Contribution Credits” means an amount equal to the difference between
(i) the aggregate amount credited to the Participant’s account under the
Retirement Plan for such calendar year pursuant to Section 6.02 thereof, and
(ii) the aggregate amount that would have been credited to the Participant’s
account under the Retirement Plan for such calendar year, but for the
restrictions of section 401(a)(17) and section 415 of the Code. Such
Contribution Credits will be credited into the Account of each Participant under
the Plan as of the last day of each calendar year beginning on or after
December 31, 2007.

1.09 “Covered Compensation” means Covered Compensation as defined under the
Retirement Plan.

1.10 “Disability” or “Disabled” means (a) the Participant is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months, or
(b) the Participant is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months, receiving
income replacement benefits for a period of not less than three (3) months under
an accident and health plan covering employees of the Company. The Committee
shall determine whether or not a Participant is Disabled based on such evidence
as the Committee deems necessary or advisable. Notwithstanding the foregoing, a
Participant shall be deemed Disabled if he or she is determined to be totally
disabled by the Social Security Administration.

1.11 “Employer” means Employer as defined under the Retirement Plan.

 

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1.12 “Final Average Compensation” means, subject to Section 3.02(a), Final
Average Compensation as defined under the Retirement Plan.

1.13 “Interest Credits” means the amount credited to a Participant’s Account as
interest in a Plan Year, calculated by using the rate of interest on 30-year
Treasury securities as specified by the Commissioner of the Internal Revenue
Service for the month of November preceding the Plan Year, or such other time as
the Secretary of the Treasury shall prescribe. Such amount for any Plan Year
shall be calculated at a rate that is not greater than the market rate of
return, as defined in section 411(b)(5)(b)(i) and section 411(b)(5)(b)(vi) of
the Code and any successor provisions thereto. The Interest Credit for any
Valuation Date shall be determined prior to crediting a Participant’s Account
with any Contribution Credits with respect to such calendar year and shall be
based on the balance of the Participant’s Account as of the immediately
preceding Valuation Date, with appropriate adjustments for payments made
therefrom since such Valuation Date. Notwithstanding anything in the Plan to the
contrary, in the event that the balance of a Participant’s Account shall be
distributed prior to the last day of a calendar year (as of which the interest
would ordinarily be credited), the Interest Credit otherwise allocable to such
Participant’s Account for such year shall be prorated, based upon the number of
complete calendar months which have elapsed from the first day of such calendar
year to the date of distribution.

1.14 “Participant” means any employee who: (a) is eligible for benefits under
the Retirement Plan, (b) retires on or after January 1, 1989, and (c) meets the
eligibility requirements of Section 3.01 of this Plan.

1.15 “Plan” means The PMI Group, Inc. Supplemental Employee Retirement Plan, as
set forth in the instrument and as heretofore or hereafter amended from time to
time.

1.16 “Retirement Plan Benefits” is defined in Section 4.05 of this Plan.

1.17 “Retirement Plan” means The PMI Group, Inc. Retirement Plan, as amended
from time to time.

1.18 “Retired Participant” means a Participant who retired in accordance with
the provisions of the Retirement Plan.

1.19 “Separation from Service” means a Participant’s death, retirement or other
termination of employment with the Employer and all of its Affiliates (as
determined in accordance with section 409A(a)(2)(A)(i) of the Code and Treasury
regulation section 1.409A-1(h)), including, but not by way of limitation, a
termination by resignation, discharge, death, Disability, Retirement, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous reemployment by the Company or an Affiliate. For this purpose,
the employment relationship shall be treated as continuing intact while the
Participant is on military leave, sick leave or other bona fide leave of
absence, except that if the period of such leave exceeds six (6) months and the
Participant does not retain a right to reemployment under an applicable statute
or by contract, then the

 

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employment relationship shall be deemed to have terminated on the first day
immediately following such six-month period. A leave of absence constitutes a
bona fide leave of absence only if there is a reasonable expectation that the
Participant will return to perform services for the Employer.

1.20 “Specified Participant” means a Participant who, as of the date of his or
her Separation from Service, is a key employee of the Company. For this purpose,
a Participant shall be deemed to be a “key employee” of the Company if he or she
meets the requirements of section 416(i)(1)(A)(i), (ii) or (iii) of the Code
(applied in accordance with the regulations thereunder and disregarding section
416(i)(5) of the Code) at any time during the 12-month period ending on
September 30 (the “Identification Date”). In this connection, the definition of
compensation under Treasury regulation section 1.415(c)-2(a) will be used,
applied as if no safe harbor provided in Treasury regulation section
1.415(c)-2(d) were used, no elective special timing rules provided in Treasury
regulation section 1.415(c)-2(e) were used, and no elective special rules
provided in Treasury regulation section 1.415(c)-2(g) were used. If a
Participant is a key employee of the Company as of any Identification Date, then
he or she will be treated as such for the entire 12-month period beginning on
the first day of the fourth month following the Identification Date.

1.21 “Spouse” means Spouse as defined in the Retirement Plan.

1.22 “Termination” means Termination as defined under the Retirement Plan.

1.23 “Trust” means a trust established pursuant to Section 4.09 of the Plan for
the purposes of holding assets for the payment of the Employer’s general
creditors, including the Employer’s Participants. Such Trust shall be intended
to be a grantor trust, of which the Employer is the grantor, within the meaning
of subpart E, part I, subchapter J, subtitle A of the Code. In addition, the
Trust, if established, shall be irrevocable and shall conform to the provisions
of Revenue Procedure 92-64.

1.24 “Valuation Date” means the last business day of each calendar year, or such
other or additional days as the Committee may deem necessary or appropriate.

1.25 “Year of Benefit Accrual Service” means Year of Benefit Accrual Service as
defined under the Retirement Plan.

ARTICLE II

INTRODUCTION

2.01 Purpose. The purpose of this Plan is: (1) to restore to Participants the
benefits they lose under the Retirement Plan as a result of the compensation
limit in section 401(a)(17) of the Internal Revenue Code of 1986, as amended
(the “Code”), or any successor provision, and (2) to restore to Participants the
benefits they lose as a result of section 415 of the Code, as amended, or any
successor provision. The Plan is an unfunded deferred compensation program for a
select group of management and highly compensated employees. Thus, the Plan is
subject to Part 1 of Title I of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), but is exempt from Parts 2, 3 and 4 thereof.

 

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2.02 Administration. The Plan will be administered by the Committee. The
Committee has all discretionary authority to issue such rules as it deems
appropriate and to interpret the provisions of the Plan and make factual
determinations, including the power to determine the rights or eligibility of
employees or participants and any other persons, and the amounts of their
benefits under the Plan, and to remedy ambiguities, inconsistencies, or
omissions. Any decision by the Committee shall be final, binding; and conclusive
on all participants and all other persons, and shall be given the maximum
possible deference permitted by law.

ARTICLE III

ELIGIBILITY AND AMOUNT OF BENEFITS

3.01 Eligibility. Each employee of an Employer who meets the definition of
Section 1.13 is eligible to receive a benefit under this Plan if he or she is
vested in benefits under the Retirement Plan and if such vested benefits have
been reduced because of the application of section 401(a)(17) or section 415 of
the Code. Notwithstanding the foregoing, in addition to the above eligibility
requirements, a Participant’s eligibility to obtain an Account is governed by
the following rules:

(a) For a Participant who is an Active Participant on September 1, 2007, and who
does not incur a Termination on or before December 31, 2010, such Participant
shall be eligible to receive a Contribution Credit for Plan Years beginning
after December 31, 2010.

(b) For a Participant who is an Active Participant on September 1, 2007, and who
does incur a Termination on or before December 31, 2010, but is subsequently
rehired and becomes an Active Participant thereafter, such Active Participant
shall be eligible to receive a Contribution Credit for Plan Years on or after
his or her date of re-eligibility to participate in the Retirement Plan.

(c) For a Participant who is not an Active Participant on September 1, 2007,
such Active Participant shall be eligible to receive a Contribution Credit to
the extent the Participant is eligible to participate in the Retirement Plan.

3.02 Amount of Benefit. The amount of benefit paid from the Plan will be equal
to: (a) plus (b) minus (c) below:

(a) The benefit, if any, which would have been payable to the Participant under
the terms of Article 5 of the Retirement Plan at his or her Separation from
Service, but for the restrictions of section 401(a)(17) and section 415 of the
Code. Notwithstanding the foregoing, and notwithstanding any contrary provision
of the Retirement Plan, “Compensation,” for purposes of determining a
Participant’s Final Average Compensation, shall mean Compensation as defined
under the Retirement Plan, but shall include amounts a Participant defers under
any nonqualified deferred compensation sponsored by an Employer.

 

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(b) The benefit, if any, which would have been payable to the Participant under
the terms of Section 6.02 of the Retirement Plan at his or her Separation from
Service, but for the restrictions of section 401(a)(17) and section 415 of the
Code and as set forth in the Participant’s Account.

(c) The amount of benefit that would be payable to the Participant under the
terms of Article 5 and/or Article 6 of the Retirement Plan at his or her
Separation from Service.

3.03 Preretirement Surviving Spouse Benefit. Preretirement Surviving Spouse
Benefits will be payable under this Plan on behalf of a Participant. The benefit
payable will be equal to the lump sum that would have been paid to the
Participant had they retired the day before their death. In the event that the
Participant does not have a surviving Spouse, the lump sum will be paid to their
beneficiary or estate.

3.04 Death Benefits After Retirement. Benefits will be payable from this Plan to
a beneficiary or contingent annuitant designated by a Retired Participant. The
normal form of benefit under the Plan is a single lump sum and if the
Participant has received their benefit in the form of a lump sum, then there are
no other benefits – including death benefits – payable under the Plan. If the
Participant has elected, under section 4.02, to receive their benefit in the
form of an annuity, then the death benefit, if any, will be based on the terms
of that annuity payable to the beneficiary of death benefits for that annuity.

ARTICLE IV

PAYMENT OF BENEFITS

4.01 Payment of Benefits. Subject to the provisions of Sections 4.02 and 4.03, a
Participant who incurs a Separation from Service shall receive the benefits due
him or her under this Plan in the form of single lump sum cash payment based on
a life annuity at the time of the Separation from Service. Such payment shall be
made on the first day of the calendar month that immediately follows the
Participant’s Separation from Service (the “Original Payment Date”) or as soon
as administratively practicable thereafter. The Retirement Plan factors for
calculating the Participant’s payment under the Plan in effect at the time of
his or her Separation from Service will be used to calculate such payment. All
distributions from a Participant’s Account will be based on the value of such
Account measured as of the Valuation Date immediately preceding the date of
distribution.

4.02 Benefit Payment Election. Notwithstanding the foregoing provisions of
Section 4.01, a Participant may elect to defer the payment of the benefits due
him or her under this Plan beyond the Original Payment Date (as defined in
Section 4.01) and receive such benefits in the form of an

 

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annuity that is permitted under the terms of the Retirement Plan, provided that
the following requirements (the “Deferral Requirements”) are satisfied: (a) the
election is made at least twelve (12) months before the Original Payment Date,
(b) the newly-elected payment date is at least five (5) years after the Original
Payment Date but not more than ten (10) years after the Original Payment Date,
and (c) the election does not take effect until at least twelve (12) months
after the date on which the election is made. Notwithstanding the foregoing, in
accordance with Treasury regulation section 1.409A-2(b)(8) the Deferral
Requirements shall be deemed to be satisfied to the extent the Committee (in its
discretion) provides a Participant with an election to satisfy the requirements
of the Uniformed Services Employment and Reemployment Rights Act of 1994, as
amended, if applicable

4.03 Required Six-Month Delay of Payment to a Specified Participant.
Notwithstanding any contrary Plan provision, any payment(s) that are otherwise
required to be made under the Plan to a Specified Participant as a result of his
or her Separation from Service shall be accumulated during the first six
(6) months following such Separation from Service and shall instead be paid on
the first day of the calendar month that immediately follows the end of such
six-month period (or if earlier, the date of death of such Specified
Participant) or as soon as administratively practicable thereafter.

4.04 Retirement Plan Termination. No further benefits may be earned under this
Plan with respect to the Retirement Plan after the termination of the Retirement
Plan.

4.05 Retirement Plan Benefits. The term “Retirement Plan Benefits” generally
means the benefits actually payable to a Participant, Spouse, beneficiary, or
contingent annuitant under the Retirement Plan. However, this Plan is only
intended to remedy pension reductions caused by the operation of section
401(a)(17) and section 415 of the Code and not reductions caused for any other
reason. In those instances where pension benefits are reduced for some other
reason, the term “Retirement Plan Benefits” shall be deemed to mean the benefits
that would have been actually payable but for such other reason.

Examples of such other reasons include, but are not limited to, the following:

(a) A reduction in pension benefits as a result of a distress termination (as
described in section 4041(c) of ERISA, or any comparable successor provision of
law) of the Retirement Plan. In such a case, the Retirement Plan Benefits will
be deemed to refer to the payments that would have been made from the Retirement
Plan had it terminated on a fully funded basis as a standard termination (as
described in ERISA section 4041(b) or any comparable successor provision of
law).

(b) A reduction of accrued benefits as permitted under section 412(c)(8) of the
Code, as amended, or any comparable successor provision of law.

(c) A reduction of pension benefits as a result of payment of all or a portion
of a Participant’s benefits to a third party on behalf of or with respect to a
Participant.

 

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4.06 Facility of Payment. Any amount payable under the Plan to a person under a
Disability may be paid to such person’s legal representative, or may be applied
for the benefit of such person in any manner selected by the Committee.

4.07 Review of Benefit Determinations. The Committee will provide notice in
writing to any Participant or beneficiary whose claim for benefits under the
Plan is denied and the Committee shall afford such Participant or beneficiary a
review of its decision if so requested.

4.08 Payment and Funding of Benefits. Amounts payable under the Plan to or on
account of a Participant shall be paid directly by the Employers, and shall be
provided solely from the general assets of the Employers. Benefits under the
Plan are not funded, the Employers’ obligation to pay such benefits is merely an
unsecured contractual obligation, and a Participant or beneficiary shall be
treated as a general creditor of the Employers with respect to any benefits
payable under the Plan. Except as provided in Section 4.09, nothing in this Plan
shall be deemed to create a trust of any kind for the benefit of the Participant
or any beneficiary, or create any fiduciary relationship between the Company and
the Participant or any beneficiary with respect to any assets of the Company.

4.09 Contributions to Trust Upon a Change in Control Event. Upon a Change in
Control Event and by the fifteenth (15th) business day following the end of each
calendar month of each Plan year thereafter, the Employer shall irrevocably
deposit cash (or its equivalent) to a Trust for the investment of benefits
payable under the Plan to or on account of each Participant. However, any
contributions made to the Trust in respect of each Participant shall remain
subject to the claims of the general creditors of the Employers. Nothing
contained in this Section 4.09 shall give any Participant or beneficiary any
interest in or claim against any specific assets of the Company.

ARTICLE V

MISCELLANEOUS

5.01 Action by Company. Any action required or permitted to be taken by the
Company under the Plan shall be by resolution of its Board of Directors, by
resolution of a duly authorized committee of its Board of Directors, or by a
person or persons authorized by resolution of its Board of Directors or such
committee.

5.02 Amendment and Plan Termination. The Company may, in its sole discretion,
terminate, suspend, or amend this Plan at any time or from time to time, in
whole or in part, but no amendment, suspension, or termination of the Plan
shall, without the consent of a Participant, reduce the accrued benefit of the
Participant or any Spouse; provided, however, that this Section 5.02 shall not
prevent reductions on account of the Participant’s (or Spouse’s) benefit ceasing
to be affected (or becoming affected to a lesser degree) by the limitations of
section 401(a)(17) and section 415 of the Code.

 

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5.03 No Effect on Employment. Nothing in the Plan shall interfere with or limit
in any way the right of the Company or the Employer directly employing the
Participant to terminate any Participant’s employment at any time, with or
without cause. Employment with the Company and its Affiliates is on an at-will
basis only.

5.04 Assignment of Benefits. A Participant, Retired Participant, surviving
Spouse, or beneficiary may not, either voluntarily or involuntarily, assign,
anticipate, alienate, commute, pledge, or encumber any benefits to which he or
she is or may become entitled under the Plan, nor may the same be subject to
attachment or garnishment by any creditor’s claim or to legal process.

5.05 Construction. The Committee shall have full discretionary authority to
determine eligibility and to construe and interpret the terms of the Plan,
including the power to remedy possible ambiguities, inconsistencies, or
omissions.

5.06 Account Statements. Periodically (as determined by the Committee), each
Participant shall receive a statement indicating the amounts credited to and
payable from the Participants’ Account.

5.07 Applicable Law. The Plan is intended to comply with the provisions of
section 409A of the Code. Notwithstanding any contrary Plan provision, the Plan
shall be construed, administered and enforced in a manner that is consistent
with such intent. The provisions of the Plan also shall be construed,
administered and enforced in accordance with the applicable provisions of ERISA,
and to the extent not preempted by ERISA, with the applicable state laws
described in Section 5.08.

5.08 Governing State Law; Severability. The Plan shall be construed,
administered and governed in all respects in accordance with the laws of the
State of California (but without giving effect to any choice or conflict of law,
provision or rule which would cause the application of the laws of any
jurisdiction other than the State of California). If any provision of the Plan
shall be held invalid or unenforceable by a court of competent jurisdiction, the
remaining provisions hereof shall continue to be fully effective.

5.09 Number. The singular, where appearing in this Plan, will be deemed to
include the plural, unless the context clearly indicates the contrary.

5.10 Participation of Affiliates. One or more Affiliates of the Company may
become a participating employer by adopting the Plan. By adopting the Plan, an
Affiliate is deemed to agree to all of its terms, including (but not limited to)
the provisions granting exclusive authority to the Company to amend the Plan and
the provisions granting exclusive authority to the Committee to administer and
interpret the Plan. Any Affiliate may terminate its participation in the Plan at
any time subject, in each case, to the approval of the Company. The liabilities
incurred under the Plan to the Participants employed by each employer shall be
solely the liabilities of that employer, and no other employer shall be liable
for benefits accrued by a Participant during any period when he or she was not
employed by such employer.

 

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5.11 Indemnification. The Company shall, and hereby does, indemnify and hold
harmless the members of the Committee, from and against any and all losses,
claims, damages or liabilities (including attorneys’ fees and amounts paid, with
the approval of the Company’s Board of Directors, in settlement of any claim)
arising out of or resulting from the implementation of a duty, act or decision
with respect to the Plan, so long as such duty, act or decision does not involve
gross negligence or willful misconduct on the part of any such individual.

5.12 Income Inclusion Under Section 409A of the Code. If the Internal Revenue
Service or a court of competent jurisdiction determines that Plan benefits are
includible for federal income tax purposes in the gross income of a Participant
before his or her actual receipt of such benefits due to a failure of the Plan
to satisfy the requirements of section 409A of the Code, Participant shall be
solely responsible for his or her expenses, including additional taxation,
related to such a determination.

5.13 No Guarantees Regarding Tax Treatment. Participants (or their
beneficiaries) shall be responsible for all taxes with respect to any benefits
under the Plan. The Company and the other Affiliates make no guarantees
regarding the tax treatment to any person of any payments made under this Plan.

EXECUTION

IN WITNESS WHEREOF, The PMI Group, Inc., by it duly authorized officer, has
executed the amended and restated Plan on the date indicated below, such
amendments shall be effective as of September 1, 2007.

 

    THE PMI GROUP, INC. Dated: September 24, 2007     By:  

/s/ Charles Broom

      Charles Broom     Title:   Senior Vice President

 

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