EX-10.11.2






Exhibit 10.11.2




INCORPORATED TERMS




DATED AS OF DECEMBER 2, 2008




TO




KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT




          The following are the “Incorporated Terms” referred to in the instrument entitled “Key
Executive Employment and Severance Agreement” which refers to these Incorporated Terms and which
has been signed by the Company and the Employee (the “Base Instrument”). The Incorporated Terms
and the Base Instrument constitute a single agreement and that agreement consists of the Base
Instrument and the Incorporated Terms. The Incorporated Terms dovetail with the Base Instrument;
because the last section of the Base Instrument is Section 1, the Incorporated Terms begin with
Section 2.




          2. Definitions.




               (a) 409A Affiliate. The term “409A Affiliate” means each entity that is required to
be included in the Company’s controlled group of corporations within the meaning of Section 414(b)
of the Code, or that is under common control with the Company within the meaning of Section 414(c)
of the Code; provided, however, that the phrase “at least 50%” shall be used in place of the phrase
“at least 80%” each place it appears therein or in the regulations thereunder.



               (b) Act. For purposes of this Agreement, the term “Act” means the Securities Exchange
Act of 1934, as amended.



               (c) Affiliate and Associate. For purposes of this Agreement, the terms “Affiliate”
and “Associate” shall have the respective meanings ascribed to such terms in Rule l2b-2 of the
General Rules and Regulations under the Act.



               (d) Beneficial Owner. For purposes of this Agreement, a Person shall be deemed to be
the “Beneficial Owner” of any securities:




          (i) which such Person or any of such Person’s Affiliates or Associates
has the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, (A)
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person’s Affiliates or Associates until
such tendered securities are accepted for purchase, or (B) securities
issuable upon exercise of Rights issued pursuant to the terms of the
Company’s Rights Agreement, dated as of July 22, 1999, between the



 









 







Company and Firstar Bank Milwaukee, N.A., as amended from time to time
(or any successor to such Rights Agreement), at any time before the issuance
of such securities;




          (ii) which such Person or any of such Person’s Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has “beneficial ownership” of (as determined pursuant to Rule l3d-3 of the
General Rules and Regulations under the Act), including pursuant to any
agreement, arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
security under this Subsection 2(d) as a result of an agreement, arrangement
or understanding to vote such security if the agreement, arrangement or
understanding: (A) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations
under the Act and (B) is not also then reportable on a Schedule l3D under
the Act (or any comparable or successor report); or




          (iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person’s Affiliates or
Associates has any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy as
described in Subsection 2(d)(ii) above) or disposing of any voting
securities of the Company.



               (e) Cause. “Cause” for termination by the Employer of the Executive’s employment
shall, for purposes of this Agreement, be limited to (i) the engaging by the Executive in
intentional conduct not taken in good faith which has caused demonstrable and serious financial
injury to the Employer, as evidenced by a determination in a binding and final judgment, order or
decree of a court or administrative agency of competent jurisdiction, in effect after exhaustion or
lapse of all rights of appeal, in an action, suit or proceeding, whether civil, criminal,
administrative or investigative; (ii) conviction of a felony (as evidenced by binding and final
judgment, order or decree of a court of competent jurisdiction, in effect after exhaustion of all
rights of appeal) which substantially impairs the Executive’s ability to perform his duties or
responsibilities; and (iii) continuing willful and unreasonable refusal by the Executive to perform
the Executive’s duties or responsibilities (unless significantly changed without the Executive’s
consent)



               (f) Change in Control of the Company. A “Change in Control of the Company” shall mean
the occurrence of any one of the following events:




          (i) any Person (other than (A) the Company or any of its subsidiaries,
(B) a trustee or other fiduciary holding securities under any employee
benefit plan of the Company or any of its subsidiaries, (C) an underwriter
temporarily holding securities pursuant to an offering of such securities or
(D) a corporation owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their ownership of stock in
the Company (“Excluded Persons”)) is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities



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acquired directly from the Company or its Affiliates after October 1,
2008, pursuant to express authorization by the Board of Directors of the
Company (the “Board”) that refers to this exception) representing 50% or
more of either the then outstanding shares of common stock of the Company or
the combined voting power of the Company’s then outstanding voting
securities entitled to vote generally in the election of directors; or




          (ii) the following individuals cease for any reason to constitute a
majority of the number of directors of the Company then serving: (A)
individuals who, on October 1, 2008, constituted the Board and (B) any new
director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of
the Company), whose appointment or election by the Board or nomination for
election by the Company’s shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors on October 1, 2008, or whose initial appointment, election or
nomination for election as a director which occurred after October 1, 2008
was approved by such vote of the directors then still in office at the time
of such initial appointment, election or nomination who were themselves
either directors on October 1, 2008 or initially appointed, elected
or nominated by such two-thirds (2/3) vote as described above ad infinitum
(collectively the “Continuing Directors”); provided, however, that
individuals who are appointed to the Board pursuant to or in accordance with
the terms of an agreement relating to a merger, consolidation, or share
exchange involving the Company (or any direct or indirect subsidiary of the
Company) shall not be Continuing Directors for purposes of this Agreement
until after such individuals are first nominated for election by a vote of
at least two-thirds (2/3) of the then Continuing Directors and are
thereafter elected as directors by the shareholders of the Company at a
meeting of shareholders held following consummation of such merger,
consolidation, or share exchange; and, provided further, that in the event
the failure of any such persons appointed to the Board to be Continuing
Directors results in a Change in Control of the Company, the subsequent
qualification of such persons as Continuing Directors shall not alter the
fact that a Change in Control of the Company occurred; or




          (iii) a merger, consolidation or share exchange of the Company with any
other corporation is consummated or voting securities of the Company are
issued in connection with a merger, consolidation or share exchange of the
Company (or any direct or indirect subsidiary of the Company), other than
(A) a merger, consolidation or share exchange which would result in the
voting securities of the Company entitled to vote generally in the election
of directors outstanding immediately prior to such merger, consolidation or
share exchange continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or any
parent thereof) at least 50% of the combined voting power of the voting
securities of the Company or such surviving entity or any parent thereof
entitled to vote generally in the election of directors of such entity or



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parent outstanding immediately after such merger, consolidation or
share exchange, or (B) a merger, consolidation or share exchange effected to
implement a recapitalization of the Company (or similar transaction) in
which no Person (other than an Excluded Person) is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company (not including
in the securities beneficially owned by such Person any securities acquired
directly from the Company or its Affiliates after October 1, 2008, pursuant
to express authorization by the Board that refers to this exception)
representing at least 50% of the combined voting power of the Company’s then
outstanding voting securities entitled to vote generally in the election of
directors; or




          (iv) the sale or disposition by the Company of all or substantially all
of the Company’s assets (in one transaction or a series of related
transactions within any period of 24 consecutive months), other than a sale
or disposition by the Company of all or substantially all of the Company’s
assets to an entity of which at least 75% of the combined voting power of
the voting securities entitled to vote generally in the election of
directors immediately after such sale are owned by Persons in substantially
the same proportions as their ownership of the Company immediately prior to
such sale.



               (g) Code. For purposes of this Agreement, the term “Code” means the Internal Revenue
Code of 1986, including any amendments thereto or successor tax codes thereof.



               (h) Covered Termination. Subject to Subsection 3(b) hereof, for purposes of this
Agreement, the term “Covered Termination” means any Termination of Employment during the Employment
Period where the Notice of Termination is delivered on, or the Termination Date is, any date prior
to the end of the Employment Period.



               (i) Employment Period. Subject to Subsection 3(b) hereof, for purposes of this
Agreement, the term “Employment Period” means a period commencing on the date of a Change in
Control of the Company, and ending at 11:59 p.m. Central Time on the earlier of the third
anniversary of such date or the Executive’s Normal Retirement Date.



               (j) Good Reason. For purposes of this Agreement, the Executive shall have “Good
Reason” for Termination of Employment in the event of:




          (i) A material diminution in the Executive’s annual base salary;




          (ii) A material diminution in the Executive’s authority, duties, or
responsibilities;




          (iii) A material diminution in the authority, duties, or
responsibilities of the supervisor to whom the Executive is required to
report, including a requirement that the Executive report to a corporate
officer or employee instead of reporting directly to the Board of Directors
of the Employer.



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          (iv) A material diminution in the budget over which the Executive
retains authority.




          (v) Any other action or inaction that constitutes a material breach by
the Employer of this Agreement.


Good Reason shall not exist for a Termination of Employment unless the Executive provides notice to
the Employer of the existence of the condition described in (i) through (v) above within a period
not to exceed 90 days of the initial existence of the condition, upon which the Employer has thirty
days during which it may remedy the condition and not be required to pay the Termination Payment.




               (k) MGIC. For purposes of this Agreement, the term “MGIC” means Mortgage Guaranty
Insurance Corporation.



               (l) Normal Retirement Date. For purposes of this Agreement, the term “Normal
Retirement Date” means the date on which the Executive can retire from service with the Employer
and commence receiving retirement payments within 31 days thereafter, without any reduction in such
payments on account of early retirement, under the primary qualified defined benefit pension plan
applicable to the Executive, or any successor plan, as in effect on the date of the Change in
Control of the Company.



               (m) Person. For purposes of this Agreement, the term “Person” shall mean any
individual, firm, partnership, corporation or other entity, including any successor (by merger or
otherwise) of such entity, or a group of any of the foregoing acting in concert.



               (n) Prime. “Prime” means the rate of interest announced by U.S. Bank, National
Association, Milwaukee, Wisconsin, from time to time as its prime or base lending rate, such rate
to be determined on the Termination Date.



               (o) Termination Date. Except as otherwise provided in Subsection 3(b), Subsection
11(b), and Subsection 18(a) hereof, the term “Termination Date” means (i) if the Executive’s
Termination of Employment is by the Executive’s death, the date of death; (ii) if the Executive’s
Termination of Employment is by reason of voluntary early retirement, as agreed in writing by the
Employer and the Executive, the date of such early retirement which is set forth in such written
agreement; (iii) if the Termination of Employment is by reason of disability pursuant to Section 13
hereof, the earlier of thirty days after the Notice of Termination is given or one day prior to the
end of the Employment Period; (iv) if the Termination of Employment is by the Executive voluntarily
(other than for Good Reason), the date the Notice of Termination is given; (v) if the Termination
of Employment is by the Employer for Cause, the earlier of ten days after the Notice of Termination
is given or one day prior to the end of the Employment Period; and (vi) if the Executive’s
Termination of Employment is by the Employer (other than for Cause or by reason of disability
pursuant to Section 13 hereof) or by the Executive for Good Reason, the earlier of thirty days
after the Notice of Termination is given or one day prior to the end of the Employment Period.
Notwithstanding the foregoing,




     (1) If termination is for Cause pursuant to Subsection 2(e)(iii) of
this Agreement and if the Executive has cured the conduct constituting such
Cause as described by the Employer in its Notice of Termination within such
ten-day or shorter period, then the Executive’s employment hereunder shall
continue as if the Employer had not delivered its Notice of Termination;



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provided, however, the right of the Executive to cure such conduct
shall apply only to the first Notice of Termination indicating that the
termination is for Cause.




     (2) If the party receiving the Notice of Termination notifies the other
party that a dispute exists concerning the termination within the
appropriate period following receipt thereof and it is finally determined
that the reason asserted in such Notice of Termination did not exist, then
(i) if such Notice was delivered by the Executive, the Executive will be
deemed to have voluntarily terminated his employment and the Termination
Date shall be the earlier of the date fifteen days after the Notice of
Termination is given or one day prior to the end of the Employment Period
and (ii) if delivered by the Company, the Company will be deemed to have
terminated the Executive other than by reason of death, disability or Cause.



               (p) Termination of Employment. For purposes of this Agreement, the Executive’s
Termination of Employment shall be presumed to occur (A) when the Company and Executive reasonably
anticipate that no further services will be performed by the Executive for the Company and its 409A
Affiliates or that the level of bona fide services the Executive will perform as an employee of the
Company and its 409A Affiliates will permanently decrease to no more than 20% of the average level
of bona fide services performed by the Executive (whether as an employee or independent contractor)
for the Company and its 409A Affiliates over the immediately preceding 36-month period (or such
lesser period of services) or (B) when the Company determines in good faith based on the facts and
circumstances in accordance with Code Section 409A, upon a decrease in services by the Executive
that is no more than 20% of such average level of bona fide services but less than 50%, that a
Termination of Employment has occurred. The Executive’s Termination of Employment shall be
presumed not to occur where the level of bona fide services performed by the Executive for the
Company and its 409A Affiliates continues at a level that is 50% or more of the average level bona
fide services performed by the Executive (whether as an employee or independent contractor) for the
Company and its 409A Affiliates over the immediately preceding 36-month period (or such lesser
period of service). No presumption applies to a decrease in services that is more than 20% but
less than 50%, and in such event, whether the Executive has had a Termination of Employment will be
determined in good faith by the Company based on the facts and circumstances in accordance with
Code Section 409A. Notwithstanding the foregoing, if Executive takes a leave of absence for
purposes of military leave, sick leave or other bona fide leave of absence, the Executive will not
be deemed to have incurred a Termination of Employment for the first six months of the leave of
absence, or if longer, for so long as the Executive’s right to reemployment is provided either by
statute or by contract, including this Agreement; provided that if the leave of absence is due to a
medically determinable physical or mental impairment that can be expected to result in death or
last for a continuous period of not less than six months, where such impairment causes the
Executive to be unable to perform the duties of his or her position of employment or any
substantially similar position of employment, the leave may be extended for up to twenty-nine
months without causing a Termination of Employment. No Termination of Employment shall be deemed
to have occurred under this Agreement unless there has been a “separation from service” as defined
under Code Section 409A and Termination of Employment shall be construed to mean “separation from
service” as so defined.



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          3. Termination or Cancellation Prior to Change in Control.




               (a) Subject to Subsection 3(b) hereof, the Employer and the Executive shall each retain the
right to terminate the employment of the Executive at any time prior to a Change in Control of the
Company. Subject to Subsection 3(b) hereof, in the event the Executive’s employment is terminated
prior to a Change in Control of the Company, this Agreement shall be terminated and cancelled and
of no further force and effect, and any and all rights and obligations of the parties hereunder
shall cease.



               (b) Anything in this Agreement to the contrary notwithstanding, if a Change in Control of the
Company occurs and if the Executive’s employment with the Employer is terminated (other than a
termination due to the Executive’s death or as a result of the Executive’s disability) during the
period of 90 days prior to the date on which the Change in Control of the Company occurs, and if it
is reasonably demonstrated by the Executive that such termination of employment (i) was at the
request of a third party who has taken steps reasonably calculated to effect a Change in Control of
the Company or (ii) was by the Executive for Good Reason or was by the Employer for other than
Cause and otherwise arose in connection with or in anticipation of a Change in Control of the
Company, then for all purposes of this Agreement such termination of employment shall be deemed a
“Covered Termination,” “Notice of Termination” shall be deemed to have been given, and the
“Employment Period” shall be deemed to have begun on the date of such termination which shall be
deemed to be the “Termination Date” and the date of the Change of Control of the Company for
purposes of this Agreement.



          4. Employment Period; Vesting of Certain Benefits. If a Change in Control of the
Company occurs when the Executive is employed by the Employer, (a) the Employer will continue
thereafter to employ the Executive during the Employment Period, and the Executive will remain in
the employ of the Employer in accordance with and subject to the terms and provisions of this
Agreement, and (b) (i) the Company shall cause all restrictions on restricted stock awards made to
the Executive prior to the Change in Control to lapse such that the Executive is fully and
immediately vested in his or her restricted stock at the time at which the Change in Control of the
Company occurs, and (ii) the Company shall cause all unexercised stock options granted to the
Executive prior to the Change in Control to be fully vested and exercisable in full at such time.
Any Termination of Employment of the Executive during the Employment Period, whether by the Company
or the Employer, shall be deemed a Termination of Employment by the Company for purposes of this
Agreement.




          5. Duties. During the Employment Period, the Executive (a) shall devote the
Executive’s best efforts and all of the Executive’s business time, attention and skill to the
business and affairs of the Employer and (b) shall be entitled to materially the same job function
as held by the Executive at the time of the Change in Control of the Company or in such other job
function or functions as shall be mutually agreed upon in writing by the Executive and the Employer
from time to time. The services which are to be performed by the Executive hereunder are to be
rendered in the same metropolitan area in which the Executive was employed at the date of such
Change in Control of the Company, or in such other place or places as shall be mutually agreed upon
in writing by the Executive and the Employer from time to time. Any travel incident to the
Executive’s job function shall not be deemed to result in a breach of the immediately preceding
sentence by the Company.




          6. Compensation. During the Employment Period, the Executive shall be compensated as
follows:




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               (a) The Executive shall receive, at reasonable intervals (but not less often than monthly) and
in accordance with such standard policies as may be in effect immediately prior to the Change in
Control of the Company, an annual base salary in cash equivalent of not less than the Executive’s
highest annual base salary in effect at any time during the 90-day period immediately prior to the
Change in Control of the Company, or if prior to the Change in Control of the Company, the Employer
had approved an increase in such base salary to take effect after the Change in Control of the
Company, at such higher rate beginning on the date on which such increase was to take effect
(determined prior to any reduction for amounts deferred under Section 401(k) of the Code or
otherwise, or deducted pursuant to a cafeteria plan or qualified transportation benefit under
Sections 125 and 132(f) of the Code), subject to adjustment as hereinafter provided in Section 7
(such salary amount as adjusted upward from time to time is hereafter referred to as the “Annual
Base Salary”).



               (b) The Executive shall be reimbursed, at such intervals and in accordance with such standard
policies that were in effect at any time during the 90-day period immediately prior to the Change
in Control of the Company, for any and all monies advanced in connection with the Executive’s
employment for reasonable and necessary expenses incurred by the Executive on behalf of the
Employer, including travel expenses.



               (c) The Executive and/or the Executive’s family, as the case may be, shall be included, to the
extent eligible thereunder (which eligibility shall not be conditioned on the Executive’s salary
grade or on any other requirement which excludes persons of comparable status to the Executive
unless such exclusion was in effect for such plan or an equivalent plan at any time during the
90-day period immediately prior to the Change in Control of the Company), in any and all plans
providing benefits for the Employer’s salaried employees in general, including but not limited to
group life insurance, hospitalization, medical, dental, profit sharing and stock bonus plans.



               (d) The Executive shall annually be entitled to not less than the amount of paid vacation and
not fewer than the highest number of paid holidays to which the Executive was entitled annually at
any time during the 90-day period immediately prior to the Change in Control of the Company.



               (e) The Executive shall be included in all plans providing additional benefits to executives
of the Employer of comparable status and position to the Executive, including but not limited to
deferred compensation, split-dollar life insurance, supplemental retirement, stock option, stock
appreciation, stock bonus and similar or comparable plans, and shall receive fringe benefits made
available to executives of the Employer of comparable status and position to the Executive;
provided, that the Employer’s obligation to include the Executive in bonus or incentive
compensation plans shall be determined by Subsection 6(g) hereof.



               (f) The aggregate annual value of the benefits made available to the Executive pursuant to
Subsections 6(c) and (e) shall not be less than 75% of the highest aggregate annual value of the
benefits of the type referred to in such Subsections that were made available to the Executive at
any time during the 90-day period immediately prior to the Change in Control of the Company, except
that if executives based in the United States of Affiliated Companies whose status and position
with such Companies are approximately comparable to the Executive do not generally receive stock
options, restricted stock or other stock-based compensation, during any period in which the
Executive does not receive such benefits, (i) the highest aggregate value of the benefits during
such 90-day period shall be computed without regard the value of stock options, restricted stock or
other stock-based compensation, and (ii) the percentage in the preceding portion of this sentence



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shall be increased to 100% from 75%. The term “Affiliated Companies” means companies that
become Affiliates of the Employer as a result of the Change in Control of the Company.




               (g) (i) To assure that the Executive will have an opportunity to earn annual incentive
compensation after a Change in Control of the Company, the Executive shall be included in a bonus
plan of the Employer which shall satisfy the standards described below (such plan, the “Post-Change
Bonus Plan”). Bonuses under the Post-Change Bonus Plan shall be payable annually with respect to
achieving such annual financial or other goals reasonably related to the business of the Employer
(or, in the case of an Executive whose primary responsibility is sales of the products of the
Employer or an Affiliate, to the extent so provided by the Employer or the Affiliate, reasonably
related to such sales) as the Employer shall establish (the “Goals”), all of which Goals that are
determinable under objective standards shall be attainable on an annual basis with approximately
the same degree of probability as the comparable goals under the Employer’s bonus plan or plans as
in effect at any time during the 90-day period immediately prior to the Change in Control of the
Company (whether one or more, the “Pre-Change Company Bonus Plan”) and in view of the Employer’s
existing and projected financial and business circumstances applicable at the time. The
determination of whether any of the Goals that are determinable under subjective standards has been
achieved shall be made by the Compensation Committee (as hereinafter defined). In the event a
majority of the members of the Compensation Committee are not persons who were on the Compensation
Committee or were officers of MGIC during the 90-day period prior to the date of the Change in
Control of the Company or the highest ranking member of the Compensation Committee is not a person
who was on the Compensation Committee during such 90-day period, none of the Goals shall be
subjective. The term “Compensation Committee” means the Board of Directors of the Company, an
appropriate committee thereof or a committee comprised of members of management of the Employer, in
each case, in accordance with the Company’s practice prior to the Change in Control of the Company
with respect to executives of comparable position to the Executive.



               (g) (ii) The maximum amount of the bonus (the “Bonus Amount”) that the Executive is eligible
to earn under the Post-Change Bonus Plan shall be no less than the product of the Executive’s
Annual Base Salary multiplied by a percentage that is at least 75% of the percentage that
determined the Executive’s maximum award provided in the Pre-Change Company Bonus Plan (such
maximum bonus amount herein referred to as the “Targeted Bonus”), and in the event the Goals (other
than any objective Goal) are not achieved such that the entire Targeted Bonus is not payable, the
Bonus Plan shall provide for a payment of a Bonus Amount equal to a portion of the Targeted Bonus
reasonably related to that portion of the Goals which were achieved. The Bonus Amount earned shall
be paid within 75 days after the end of the related fiscal year; at the option of the Employer, up
to one-third of the Bonus Amount may be paid in restricted stock if the class of stock of which
such restricted stock is a part is publicly-traded in an active market in the United States and
such stock becomes fully vested by continued employment for a period of not more than one year
after the date on which the Bonus Amount is paid.



          7. Annual Compensation Adjustments. During the Employment Period, the Compensation
Committee (as defined in Subsection 6(g)(i) hereof) will consider and appraise, annually, the
contributions of the Executive to the Company, and in accordance with the Company’s practice prior
to the Change in Control of the Company, good faith consideration shall be given to the upward
adjustment of the Executive’s Annual Base Salary, annually.




          8. Termination for Cause or Without Good Reason. If there is a Covered Termination
for Cause or due to the Executive’s voluntarily terminating his or her employment other




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than for Good Reason (any such terminations to be subject to the procedures set forth in
Section 14 hereof), then the Executive shall be entitled to receive only Accrued Benefits pursuant
to Subsection 10(a) hereof.




          9. Termination Giving Rise to a Termination Payment.




               (a) If there is a Covered Termination by the Executive for Good Reason, or by the Company
other than by reason of (i) death, (ii) disability pursuant to Section 13 hereof, or (iii) Cause
(any such terminations to be subject to the procedures set forth in Section 14 hereof), then the
Executive shall be entitled to receive, and the Company shall promptly pay, Accrued Benefits and,
in lieu of further Annual Base Salary for periods following the Termination Date, as liquidated
damages and additional severance pay and in consideration of the covenant of the Executive set
forth in Subsection 15(a) hereof, the Termination Payment pursuant to Subsection 10(b) hereof.



               (b) If there is a Covered Termination and the Executive is entitled to Accrued Benefits and
the Termination Payment, then the Company shall provide to the Executive the following additional
benefits:




               (i) The Executive shall receive until the end of the second calendar
year following the calendar year in which the Executive’s Termination of
Employment occurs, at the expense of the Company, outplacement services, on
an individualized basis at a level of service commensurate with the
Executive’s status with the Company immediately prior to the date of the
Change in Control of the Company (or, if higher, immediately prior to the
Executive’s Termination of Employment), provided by a nationally recognized
executive placement firm selected by the Company; provided that the cost to
the Company of such services shall not exceed 10% of the Executive’s Annual
Base Salary.




               (ii) Until the earlier of the end of the Employment Period or such time
as the Executive has obtained new employment and is covered by benefits
which in the aggregate are at least equal in value to the following
benefits, the Executive shall continue to be covered, at the expense of the
Company, by the same or equivalent life insurance, hospitalization, medical
and dental coverage as was required hereunder with respect to the Executive
immediately prior to the date the Notice of Termination is given, subject to
the following:




     (A) If applicable, following the end of the COBRA
continuation period, if such hospitalization, medical or
dental coverage is provided under a health plan that is
subject to Section 105(h) of the Code, benefits payable under
such health plan shall comply with the requirements of
Treasury regulation section 1.409A-3(i)(1)(iv)(A) and (B)
and, if necessary, the Company shall amend such health plan
to comply therewith.




     (B) During the first six months following the
Executive’s Termination Date, the Executive shall pay the



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Company for any life insurance coverage that provides a
benefit in excess of $50,000 under a group term life
insurance policy. After the end of such six month period,
the Company shall make a cash payment to the Executive equal
to the aggregate premiums paid by the Executive for such
coverage, and thereafter such coverage shall be provided at
the expense of the Company for the remainder of the period.




If the Executive is entitled to the Termination Payment pursuant to
Subsection 3(b), within ten days following the Change of Control, the
Company shall reimburse the Executive for any COBRA premiums the Executive
paid for his or her hospitalization, medical and dental coverage under COBRA
from the Executive’s Termination Date through the date of the Change of
Control.




          (iii) The Company shall cause the Executive to be fully and immediately
vested in his or her accrued benefit under any supplemental executive
retirement plan of the Employer providing benefits for the Executive (the
“SERP”) and in any restricted stock paid as part of the Executive’s Bonus
Amount as contemplated by Subsection 6(g)(ii).




          (iv) If the Executive is not fully vested in all accrued benefits under
any defined contribution retirement plan of the Employer, the Company shall
make a lump sum payment to the Executive in an amount equal to the
difference between the fully vested amount of the Executive’s account
balances under such plan at the Termination Date and the vested amount of
such balances at such time.




          (v) The Company shall reimburse the Executive for up to an aggregate of
$10,000 in (A) tax preparation assistance fees for the tax year in which the
Termination Payment is made and (B) fees and expenses of consultants and/or
legal or accounting advisors engaged by the Executive to advise the
Executive as to matters relating to the computation of benefits due and
payable under Subsection 10(b).



          10. Payments.




               (a) Accrued Benefits. For purposes of this Agreement, the Executive’s “Accrued
Benefits” shall include the following amounts, payable as described herein: (i) all Annual Base
Salary for the time period ending with the Termination Date; (ii) reimbursement for any and all
monies advanced in connection with the Executive’s employment for reasonable and necessary expenses
incurred by the Executive on behalf of the Employer for the time period ending with the Termination
Date; (iii) any and all other cash earned through the Termination Date and deferred at the election
of the Executive or pursuant to any deferred compensation plan then in effect; (iv) a lump sum
payment of the bonus or incentive compensation otherwise payable to the Executive with respect to
the year in which termination occurs under all bonus or incentive compensation plan or plans in
which the Executive is a participant, but subject to any deferral election then in effect; and (v)
all other payments and benefits to which the Executive (or in the event of the Executive’s death,
the Executive’s surviving spouse or other beneficiary) may be entitled as compensatory fringe



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benefits or under any benefit plan of the Employer, excluding severance payments under any
Employer severance policy, practice or agreement in effect immediately prior to the Change in
Control of the Company. Payment of Accrued Benefits shall be made promptly in accordance with the
Company’s prevailing practice with respect to Subsections 10(b)(i) and (ii) or, with respect to
Subsections 10(b)(iii), (iv) and (v), pursuant to the terms of the benefit plan or practice
establishing such benefits.




               (b) Termination Payment and Other Payments.




          (i) The Termination Payment shall be an amount equal to (A) the
Executive’s Annual Base Salary (as defined in Subsection 6(a) and determined
as of the time of the Change in Control of the Company or, if higher,
immediately prior to the date the Notice of Termination is given) plus (B)
an amount equal to the greater of the Executive’s Targeted Bonus for the
year in which the Termination Date occurs or the bonus the Executive
received (w) for the year in which the Change in Control of the Company
occurred or (x) for the year prior to the year in which the Change in
Control of the Company occurred (each year described in clauses (w) and (x)
is herein referred to as a “Prior Year”) plus (C) an amount equal to the
“actuarial equivalent” (as defined in the Company’s defined benefit pension
plan on the determination date) of the Executive’s benefit accruals under
the pension plan and the SERP for, whichever is greater, the year in which
the Termination Date occurs or a Prior Year plus an amount equal to the
Company’s matching contribution and profit sharing contribution under the
Company’s defined contribution profit sharing and savings plan for,
whichever is greater, the year in which the Termination Date occurs or a
Prior Year (the aggregate amount set forth in (A), (B) and (C) hereof shall
hereafter be referred to as “Annual Cash Compensation”), times (D) the
Multiplier less, if the Termination Date occurs more than three months after
the date of Change in Control of the Company, the portion of the Employment
Period that has elapsed at the Termination Date (measured by the number of
months that have elapsed from the date of the Change in Control of the
Company to the Termination Date divided by 33); provided, however, that such
amount shall not be less than the severance benefits to which the Executive
would have been entitled under the Company’s severance policies and
practices in effect immediately prior to the Change in Control of the
Company. The Termination Payment shall be paid to the Executive in cash
equivalent in two lump sums if any stock of the Company or any Affiliate is
publicly traded on an established securities market or otherwise at the time
of the Executive’s Termination of Employment. The first lump sum shall be
paid within ten (10) business days after the Executive’s Termination Date
and shall equal the amount that (aa) does not exceed the Termination Payment
amount and (bb) is the lesser of two times (y) the Executive’s annualized
compensation based upon the annual rate of pay for services provided to the
Company for the taxable year of the Executive preceding the taxable year in
which the Executive has a Termination of Employment or (z) the maximum
amount that may be taken into account under a qualified plan pursuant to
Code Section 401(a)(17) for the year in which the Executive has a
Termination of Employment. The second lump sum payment shall be equal to
the difference between the



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amount calculated under the first sentence of this paragraph and the
amount calculated under the second sentence of this paragraph, and such
amount shall be paid six months and one day after the Executive’s
Termination Date. Each lump sum payment shall be deemed a separate payment
for purposes of Code Section 409A. If the Company or any Affiliate has no
publicly traded stock, as described above, at the Executive’s Termination of
Employment, then the entire Termination Payment shall be paid within ten
(10) business days after the Executive’s Termination Date. Any Termination
Payment amount paid six months and one day after the Executive’s Termination
Date shall be accompanied by a payment of interest calculated at Prime,
compounded quarterly. Notwithstanding the foregoing, in the event the
Executive’s Termination Date is pursuant to Subsection 3(b), the Termination
Payment shall be paid within ten (10) business days after the date of the
Change in Control of the Company (as defined without reference to Subsection
3(b)), without interest. The Termination Payment shall not be reduced by
any present value or similar factor, and the Executive shall not be required
to mitigate the amount of the Termination Payment by securing other
employment or otherwise, nor will such Termination Payment be reduced by
reason of the Executive securing other employment or for any other reason.
The Termination Payment shall be in lieu of, and acceptance by the Executive
of the Termination Payment shall constitute the Executive’s release of any
rights of Executive to, any other severance payments under any Company
severance policy, practice or agreement.




          (ii) Notwithstanding any other provision of this Agreement, if any
portion of any payment under this Agreement (including any Section 409A
Gross-Up Payment under Subsection 10(b)(vi)), or under any other agreement
with or plan of the Employer, including payments that may be deemed to have
occurred on account of accelerated vesting of restricted stock or stock
options under Subsection 4(b) hereof (in the aggregate “Total Payments”),
would constitute an “excess parachute payment,” the Company shall pay the
Executive an additional amount (the “Gross-Up Payment”) such that the net
amount retained by the Executive after deduction of any excise tax imposed
under Section 4999 of the Code, any interest charges or penalties in respect
of the imposition of such excise tax (but not any federal, state or local
income tax, or employment tax) on the Total Payments, and any federal, state
and local income tax, employment tax, and excise tax upon the payment
provided for by this Subsection 10(b)(ii), shall be equal to the Total
Payments. For purposes of determining the amount of the Gross-Up Payment,
the Executive shall be deemed to pay federal income tax and employment taxes
at the highest marginal rate of federal income and employment taxation in
the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of the Executive’s domicile for income tax purposes on the date the
Gross-Up Payment is made, net of the maximum reduction in federal income
taxes that may be obtained from the deduction of such state and local taxes.



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          (iii) For purposes of this Agreement, the terms “excess parachute
payment” and “parachute payments” shall have the meanings assigned to them
in Section 280G of the Code and such “parachute payments” shall be valued as
provided therein. Present value for purposes of this Agreement shall be
calculated in accordance with Section 1274(b)(2) of the Code (or any
successor provision). Promptly following a Covered Termination or notice by
the Company to the Executive of its belief that there is a payment or
benefit due the Executive which will result in an excess parachute payment
as defined in Section 280G of the Code (or if the Company fails to give such
notice and the Executive furnishes notice to the Company setting forth
computations in reasonable detail supporting the Executive’s belief that
there has been such an excess parachute payment, promptly after such notice
by the Executive unless the Executive has withdrawn such notice after the
Company’s response to such computations), the Executive and the Company, at
the Company’s expense, shall obtain the opinion (which need not be
unqualified) of nationally recognized tax counsel (“National Tax Counsel”)
selected by the Company’s independent auditors and reasonably acceptable to
the Executive (which may be regular outside counsel to the Company), which
opinion sets forth (i) the amount of the Base Period Income, (ii) the amount
and present value of Total Payments, (iii) the amount and present value of
any excess parachute payments, and (iv) the amount of any Gross-Up Payment.
As used in this Agreement, the term “Base Period Income” means an amount
equal to the Executive’s “annualized includible compensation for the base
period” as defined in Section 280G(d)(1) of the Code. For purposes of such
opinion, the value of any noncash benefits or any deferred payment or
benefit shall be determined by the Company’s independent auditors in
accordance with the principles of Section 280G(d)(3) and (4) of the Code (or
any successor provisions), which determination shall be evidenced in a
certificate of such auditors addressed to the Company and the Executive.
The opinion of National Tax Counsel shall be addressed to the Company and
the Executive and, subject to any adjustment pursuant to Subsection
10(b)(iv), shall be binding upon the Company and the Executive. If such
National Tax Counsel so requests in connection with the opinion required by
this Subsection 10(b) of Section 10, the Executive and the Company shall
obtain, at the Company’s expense, and the National Tax Counsel may rely on,
the advice of a firm of recognized executive compensation consultants as to
the reasonableness of any item of compensation to be received by the
Executive solely with respect to its status under Section 280G of the Code
and the regulations thereunder. The Company shall pay (or cause to be paid)
or distribute (or cause to be distributed) to or for the benefit of the
Executive such Gross-Up Payment as is then due to the Executive within five
days after the National Tax Counsel’s opinion is received by the Company and
the Executive, but in no event prior to the date the Termination Payment is
initially payable to the Executive; provided, however, that, if prior to
such date the Executive is required to remit the excise tax under Code
Section 4999 of the Code to the Internal Revenue Service, then upon written
notice by the Executive to the Company, the Company shall promptly pay the
Gross-Up Payment (but based on the Executive’s actual rate of taxation) to
the Executive.



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          (iv) In the event that upon any audit by the Internal Revenue Service,
or by a state or local taxing authority, of the Total Payments or Gross-Up
Payment, a change is finally determined to be required in the amount of
taxes paid by the Executive, appropriate adjustments shall be made under
this Agreement such that the net amount which is payable to the Executive
after taking into account the provisions of Section 4999 of the Code shall
reflect the intent of the parties as expressed in this Section 10, in the
manner determined by the National Tax Counsel. If the Company is required
to make a payment to the Executive, such payment shall be paid following the
date of the final determination by a court or the Internal Revenue Service
and within thirty days after the date Executive provides the Company a
written request for reimbursement thereof (accompanied by proof of taxes
paid), but in no event shall the reimbursement be made later than the end of
the calendar year following the year in which the Executive remits the
excise tax to the Internal Revenue Service.




          (v) The Company agrees to bear all costs associated with, and to
indemnify and hold harmless, the National Tax Counsel of and from any and
all claims, damages, and expenses resulting from or relating to its
determinations pursuant to this Subsection 10(b), except for claims, damages
or expenses resulting from the gross negligence or willful misconduct of
such firm.



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          (vi) If any portion of the Termination Payment or any other payment or
benefit (or any acceleration of any payment or benefit) made or provided to
the Executive or for the Executive’s benefit in connection with this
Agreement or, on or after the Change in Control of the Company, the
Executive’s employment with the Company or the termination thereof (the
“Payments”) are determined to be subject to the interest charges and taxes
imposed by Section 409A(a)(1)(B) of the Code, or any state, local, or
foreign taxes of a similar nature, or any interest charges or penalties with
respect to such taxes (such taxes, together with any such interest charges
and penalties, are collectively referred to as the “Section 409A Tax”), then
the Company shall pay the Executive, within 30 days after the date on which
the Executive provides the Company with a written request for reimbursement
thereof (accompanied by proof of taxes paid), but in no event later than the
end of the calendar year following the year in which the Executive remits
the Section 409A tax to the Internal Revenue Service or other applicable
taxing authority, an additional amount (the “Section 409A Gross-Up
Payment”); provided, however, that any Section 409A Gross-Up Payment shall
be reduced to the extent that the Section 409A Tax payable is due to the
direct fault of the Executive. The Section 409A Gross-Up Payment shall,
subject to the proviso at the end of the previous sentence, be such that the
net amount retained by the Executive after deduction of the Section 409A Tax
(but not any federal, state, or local income tax or employment tax) and any
federal, state, or local income tax, or employment tax upon the payment
provided for by this Subsection 10(b)(vi) shall be equal to the Payments.
For purposes of determining the amount of the Section 409A Gross-Up Payment,
the Executive shall be deemed to pay federal income tax and employment taxes
at the highest marginal rate of federal income and employment taxation in
the calendar year in which the Section 409A Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rate of taxation in
the state and locality of the Executive’s domicile for income tax purposes
on the date the Section 409A Gross-Up Payment is made, net of the maximum
reduction in federal income taxes that may be obtained from the deduction of
such state and local taxes. The Company and the Executive shall reasonably
cooperate with each other in connection with any administrative or judicial
proceedings concerning the existence or amount of liability for Section 409A
Tax with respect to the Payments, and the Executive shall, if reasonably
requested by the Company, contest any obligation to pay a Section 409A Tax
for which a Section 409A Gross-Up Payment is owed. If, as a result thereof,
the Executive receives a tax refund or credit for any Section 409A Tax
previously paid with respect to any Payments for which a Section 409A
Gross-Up Payment was paid, the Executive shall return to the Company an
amount equal to such refund or credit.



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          (vii) Executive agrees that this Agreement and any other agreements
which may give rise to any Section 409A Tax may be amended by the Company on
one or more occasions without the consent or approval of the Executive if in
the determination of the Compensation Committee such amendment is necessary
or appropriate to conform the provisions of such agreement to Treasury
Regulation 1.409A-1 et seq. or any position published by the Internal
Revenue Service with respect to Section 409A of the Internal Revenue Code of
1986. The right of the Company to make such an amendment does not depend on
whether the applicable agreement is subject to such Section but will enable
the Company to have uniform provisions among all agreements having
provisions such as the one being amended, including those under which
compensation is subject to such Section. Any such amendment will become
effective upon notice to the Executive. The Company will seek to give the
Executive notice of an amendment with reasonable promptness after the
Compensation Committee has approved the amendment.



          11. Death.




               (a) Except as provided in Subsection 11(b) hereof, in the event of a Covered Termination due
to the Executive’s death, the Executive’s estate, heirs and beneficiaries shall receive all the
Executive’s Accrued Benefits through the Termination Date.



               (b) In the event the Executive dies after a Notice of Termination is given (i) by the Company
or (ii) by the Executive for Good Reason, the Executive’s estate, heirs and beneficiaries shall be
entitled to the benefits described in Subsection 11(a) hereof and, subject to the provisions of
this Agreement, to such Termination Payment as the Executive would have been entitled to had the
Executive lived, except that the Termination Payment shall be paid within 90 days following the
date of the Executive’s death, without interest thereon. For purposes of this Subsection 11(b),
the Termination Date shall be the earlier of thirty days following the giving of the Notice of
Termination, subject to extension pursuant to the definition of Termination of Employment, or one
day prior to the end of the Employment Period.



          12. Retirement. If, during the Employment Period, the Executive and the Employer
shall execute an agreement providing for the early retirement of the Executive from the Employer,
or the Executive shall otherwise give notice that he is voluntarily choosing to retire early from
the Employer, the Executive shall receive Accrued Benefits through the Termination Date; provided,
that if the Executive’s employment is terminated by the Executive for Good Reason or by the Company
other than by reason of death, disability or Cause and the Executive also, in connection with such
termination, elects voluntary early retirement, the Executive shall also be entitled to receive a
Termination Payment pursuant to Subsection 9(a) hereof.



          13. Termination for Disability. If, during the Employment Period, as a result of the
Executive’s disability due to physical or mental illness or injury (regardless of whether such
illness or injury is job-related), the Executive shall have been absent from the Executive’s duties
hereunder on a full-time basis for a period of six consecutive months and, within thirty days after
the Company notifies the Executive in writing that it intends to terminate the Executive’s
employment (which notice shall not constitute the Notice of Termination contemplated below), the
Executive shall not have returned to the performance of the Executive’s duties hereunder on a
full-time basis,



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the Company may terminate the Executive’s employment for purposes of this Agreement pursuant
to a Notice of Termination given in accordance with Section 14 hereof. If the Executive’s
employment is terminated on account of the Executive’s disability in accordance with this Section,
the Executive shall receive Accrued Benefits in accordance with Subsection 10(a) hereof and shall
remain eligible for all benefits provided by any long term disability programs of the Company in
effect at the time of such termination.




          14. Termination Notice and Procedure. Any Covered Termination by the Company or the
Executive (other than a termination of the Executive’s employment that is a Covered Termination by
virtue of Subsection 3(b) hereof) shall be communicated by a written notice of termination (“Notice
of Termination”) to the Executive, if such Notice is given by the Company, and to the Company, if
such Notice is given by the Executive, all in accordance with the following procedures and those
set forth in Section 25 hereof:



               (a) If such termination is for disability, Cause or Good Reason, the Notice of Termination
shall indicate in reasonable detail the facts and circumstances alleged to provide a basis for such
termination.



               (b) If the Notice is given by the Executive for Good Reason, the Executive may cease
performing his duties hereunder on or after the date fifteen days after the delivery of Notice of
Termination and shall in any event cease employment on the Termination Date. If the Notice is
given by the Company, then the Executive may cease performing his duties hereunder on the date of
receipt of the Notice of Termination, subject to the Executive’s rights hereunder.



               (c) To the extent provided by Subsection 2(p)(1), the Executive shall have ten days, or such
longer period as the Company may determine to be appropriate, to cure any conduct or act, if
curable, alleged to provide grounds for termination of the Executive’s employment for Cause under
this Agreement pursuant to Subsection 2(e) (iii) hereof.



               (d) The recipient of any Notice of Termination shall personally deliver or mail in accordance
with Section 25 hereof written notice of any dispute relating to such Notice of Termination to the
party giving such Notice within fifteen days after receipt thereof; provided, however, that if the
Executive’s conduct or act alleged to provide grounds for termination by the Company for Cause is
curable, then such period shall be thirty days. After the expiration of such period, the contents
of the Notice of Termination shall become final and not subject to dispute.



          15. Further Obligations of the Executive.




               (a) Competition. The Executive agrees that, in the event of any Covered Termination
where the Executive is entitled to Accrued Benefits and the Termination Payment, the Executive
shall not, for a period expiring twelve months after the Termination Date, without the prior
written approval of the Company’s Board of Directors, participate in the management of, be employed
by or own any business enterprise at a location within the United States that engages in
substantial competition with MGIC, where such enterprise’s revenues from any such competitive
activities amount to 10% or more of such enterprise’s net revenues and sales for its most recently
completed fiscal year; provided, however, that nothing in this Subsection 15(a) shall prohibit the
Executive from owning stock or other securities of a competitor amounting to less than five percent
of the outstanding capital stock of such competitor.



-18-









 





               (b) Confidentiality. During and following the Executive’s employment by the Company,
the Executive shall hold in confidence and not directly or indirectly disclose or use or copy or
make lists of any confidential information or proprietary data of the Company (including that of
the Employer), except to the extent authorized in writing by the Board of Directors of the Company
or required by any court or administrative agency, other than to an employee of the Company or a
person to whom disclosure is reasonably necessary or appropriate in connection with the performance
by the Executive of duties as an executive of the Company. Confidential information shall not
include any information known generally to the public or any information of a type not otherwise
considered confidential by persons engaged in the same business or a business similar to that of
the Company. All records, files, documents and materials, or copies thereof, relating to the
business of the Company which the Executive shall prepare, or use, or come into contact with, shall
be and remain the sole property of the Company and shall be promptly returned to the Company upon
termination of employment with the Company.



          16. Expenses and Interest. If, after a Change in Control of the Company, (i) a
dispute arises with respect to the enforcement of the Executive’s rights under this Agreement, (ii)
any arbitration proceeding shall be brought to enforce or interpret any provision contained herein
or to recover damages for breach hereof, or (iii) any legal proceeding shall be brought with
respect to the arbitration provisions hereof, in each case so long as, and to the extent that, the
Executive prevails in such proceeding, the Executive shall recover from the Company the reasonable
attorneys’ fees and necessary costs and disbursements incurred as a result of the dispute,
arbitration or legal proceeding as to which the Executive has prevailed (“Expenses”), and
prejudgment interest on any arbitration award obtained by the Executive calculated at Prime from
the date that payments to him or her should have been made under this Agreement. Within ten days
after the Executive’s written request therefore (but in no event later than the end of the calendar
year following the calendar year in which such Expense is incurred), the Company shall reimburse
the Executive, or such other person or entity as the Executive may designate in writing to the
Company, the Expenses. Any dispute as to the reasonableness of the Expenses incurred, or the
extent to which the Executive has prevailed, shall be resolved by the arbitrator.



          17. Payment Obligations Absolute. The Company’s obligation during and after the
Employment Period to pay the Executive the amounts and to make the benefit and other arrangements
provided herein shall be absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any setoff, counterclaim, recoupment, defense or other right which
the Company may have against him or anyone else. Except as provided in Subsection 10(b) and
Section 16 of this Agreement, all amounts payable by the Company hereunder shall be paid without
notice or demand. Each and every payment made hereunder by the Company shall be final, and the
Company will not seek to recover all or any part of such payment from the Executive, or from
whomsoever may be entitled thereto, for any reason whatsoever.



          18. Successors.



               (a) If the Company sells, assigns or transfers all or substantially all of its business and
assets to any Person or if the Company merges into or consolidates or otherwise combines (where the
Company does not survive such combination) with any Person (any such event, a “Sale of Business”),
then the Company shall assign all of its right, title and interest in this Agreement as of the date
of such event to such Person, and the Company shall cause such Person, by written agreement (an
“Assumption Agreement”), to expressly assume and agree to perform from and after the date of such
assignment all of the terms, conditions and provisions imposed by this



-19-









 




Agreement upon the Company, and the Assumption Agreement shall be in form and substance
reasonably satisfactory to the Executive (but if at the time of a Sale of Business, the chief
executive officer of the Company or any officer of Company who is among the next four highest
ranking officers of the Company has a Key Executive Employment and Severance Agreement, and any of
such officers approves the Assumption Agreement, the Executive, if not one of such five officers,
shall be deemed to have approved the Assumption Agreement). Failure of the Company to obtain an
Assumption Agreement prior to the effective date of such Sale of Business shall be a breach of this
Agreement constituting “Good Reason” hereunder, except that for purposes of implementing the
foregoing the date upon which such Sale of Business becomes effective shall be deemed the
Termination Date. In case of such assignment by the Company and of assumption and agreement by
such Person, as used in this Agreement, “Company” shall thereafter mean such Person which executes
and delivers the Assumption Agreement or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law, and this Agreement shall inure to the benefit of,
and be enforceable by, such Person. The Executive shall, in his or her discretion, be entitled to
proceed against any or all of such Persons, any Person which theretofore was such a successor to
the Company and the Company (as so defined) in any action to enforce any rights of the Executive
hereunder. Except as provided in this Subsection 18(a), this Agreement shall not be assignable by
the Company. This Agreement shall not be terminated by the voluntary or involuntary dissolution of
the Company.




               (b) This Agreement and all rights of the Executive shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, executors, administrators, heirs
and beneficiaries. All amounts payable to the Executive under Sections 8, 9, 10, 11, 12, 13 and 16
hereof if the Executive had lived shall be paid, in the event of the Executive’s death, to the
Executive’s estate, heirs and representatives; provided, however, that the foregoing shall not be
construed to modify any terms of any benefit plan of the Employer, as such terms are in effect on
the date of the Change in Control of the Company, that expressly govern benefits under such plan in
the event of the Executive’s death.



          19. Severability. The provisions of this Agreement shall be regarded as divisible,
and if any of said provisions or any part hereof are declared invalid or unenforceable by a court
of competent jurisdiction, the validity and enforceability of the remainder of such provisions or
parts hereof and the applicability thereof shall not be affected thereby.



          20. Contents of Agreement; Waiver of Rights; Amendment. This Agreement sets forth the
entire understanding between the parties hereto with respect to the subject matter hereof, and the
Executive hereby waives all rights under any prior or other agreement or understanding between the
parties with respect to such subject matter. Any implication to the contrary in the preceding
sentence notwithstanding, this Agreement shall not affect the Executive’s obligations under
non-competition or confidentiality agreement with the Company, the Employer or MGIC. This
Agreement may not be amended or modified at any time except by written instrument executed by the
Company and the Executive, provided, however, the Company may, on one or more occasions without the
approval of the Executive, amend this Agreement with the approval of the Board to the extent the
Company determines such amendment is necessary to comply with the provisions of the Emergency
Economic Stabilization Act of 2008 or any regulation or program issued or established thereunder.
Any such amendment will become effective upon notice to the Executive. The Company will seek to
give the Executive notice of an amendment with reasonable promptness after the Board has approved
the amendment.



-20-









 





          21. Withholding. The Company shall be entitled to withhold from amounts to be paid to
the Executive hereunder any federal, state or local withholding or other taxes or charges which it
is from time to time required to withhold; provided that the amount so withheld shall not exceed
the minimum amount required to be withheld by law. In addition, if prior to the date of payment of
the Termination Payment hereunder, the Federal Insurance Contributions Act (FICA) tax imposed under
Sections 3101, 3121(a) and 3121(v)(2), where applicable, becomes due with respect to any payment or
benefit to be provided hereunder, the Company may provide for an immediate payment of the amount
needed to pay the Executive’s portion of such tax (plus an amount equal to the taxes that will be
due on such amount) and the Executive’s Termination Payment shall be reduced accordingly. The
Company shall be entitled to rely on an opinion of the National Tax Counsel if any question as to
the amount or requirement of any such withholding shall arise.



          22. Additional Section 409A Provisions.



               (a) If any payment amount or the value of any benefit under this Agreement is required to be
included in an Executive’s income prior to the date such amount is actually paid or the benefit
provided as a result of the failure of this Agreement (or any other arrangement that is required to
be aggregated with this Agreement under Code Section 409A) to comply with Code Section 409A, then
the Executive shall receive a distribution, in a lump sum, within 90 days after the date it is
finally determined that the Agreement (or such other arrangement that is required to be aggregated
with this Agreement) fails to meet the requirements of Section 409A of the Code; such distribution
shall equal the amount required to be included in the Executive’s income as a result of such
failure and shall reduce the amount of payments or benefits otherwise due hereunder.



               (b) The Company and the Executive intend the terms of this Agreement to be in compliance with
Section 409A of the Code. To the maximum extent permissible, any ambiguous terms of this Agreement
shall be interpreted in a manner which avoids a violation of Section 409A of the Code and, subject
to mutual written consent of the Executive and the Company, payments may be deferred hereunder to
comply with Code Section 409A requirements.



               (c) The Executive acknowledges that to avoid an additional tax on payments that may be payable
or benefits that may be provided under this Agreement and that constitute deferred compensation
that is not exempt from Section 409A of the Code, the Executive must make a reasonable, good faith
effort to collect any payment or benefit to which the Executive believes the Executive is entitled
hereunder no later than 90 days after the latest date upon which the payment could have been made
or benefit provided under this Agreement, and if not paid or provided, must take further
enforcement measures within one 180 days after such latest date.



          23. Certain Rules of Construction. No party shall be considered as being responsible
for the drafting of this Agreement for the purpose of applying any rule construing ambiguities
against the drafter or otherwise. No draft of this Agreement shall be taken into account in
construing this Agreement. Any provision of this Agreement which requires an agreement in writing
shall be deemed to require that the writing in question be signed by the Executive and an
authorized representative of the Company. This Agreement supersedes any prior Key Executive
Employment and Severance Agreement between the Executive and the Company.



          24. Governing Law; Resolution of Disputes. This Agreement and the rights and
obligations hereunder shall be governed by and construed in accordance with the laws of the State
of



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Wisconsin applicable to contracts made therein between residents thereof. Any dispute arising
out of this Agreement shall be determined by arbitration under the rules of the American
Arbitration Association then in effect. The venue for the arbitration (and any legal action to
enforce the foregoing obligation to arbitrate) shall be Milwaukee, Wisconsin or, if the Executive
is not then residing or working in the Milwaukee, Wisconsin metropolitan area, in the judicial
district encompassing the city in which the Executive resides; provided, that, if the Executive is
not then residing in the United States, the election of the Executive with respect to such venue
shall be either Milwaukee, Wisconsin or in the judicial district encompassing that city in the
United States among the thirty cities having the largest population (as determined by the most
recent United States Census data available at the Termination Date) which is closest to the
Executive’s residence. For purposes of any legal action to enforce the foregoing obligation to
arbitrate, the parties consent to personal jurisdiction in each trial court in the selected venue
having subject matter jurisdiction notwithstanding their residence or situs, and each party
irrevocably consents to service of process in the manner provided hereunder for the giving of
notices.




          25. Notice. Notices given pursuant to this Agreement shall be in writing and, except
as otherwise provided by Subsection 14(d) hereof, shall be deemed given when actually received by
the Executive or actually received by the Company’s Secretary or any officer of the Company other
than the Executive. If mailed, such notices shall be mailed by United States registered or
certified mail, return receipt requested, addressee only, postage prepaid, if to the Company, to
MGIC Investment Corporation, Attention: Secretary (or President, if the Executive is the
Secretary), 250 East Kilbourn Avenue, Milwaukee, Wisconsin 53202, or if to the Executive, at the
address set forth below the Executive’s signature to this Agreement, or to such other address as
the party to be notified shall have theretofore given to the other party in writing.



          26. No Waiver. No waiver by either party at any time of any breach by the other party
of, or compliance with, any condition or provision of this Agreement to be performed by the other
party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time
or any prior or subsequent time.



          27. Headings. The headings herein contained are for reference only and shall not
affect the meaning or interpretation of any provision of this Agreement.




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