EX-10.7






Exhibit 10.7




MGIC INVESTMENT CORPORATION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN 




	 	 	 
	1.

	 	Purpose






        The purposes of this MGIC Investment Corporation Supplemental Executive Retirement
Plan (hereinafter referred to as the “Plan”) are to restore retirement benefits to certain
participants in the Company’s pension plan whose benefits under said Plan are or will be limited by
reason of Sections 401(a)(17) or 415 of the Internal Revenue Code of 1986, as amended (“Code”) and
to provide certain other retirement benefits.



        This Plan is completely separate from the tax-qualified Pension Plan maintained by the
Company and is not funded or qualified for special tax treatment under the Code.



	 	 	 
	2.

	 	Effective Date






        The Plan is effective as of July 31, 1990.



	 	 	 
	3.

	 	Definitions






        The following terms as used herein shall have the meanings set forth below:



	 	 	 
	 

	 	        “Company” means MGIC Investment Corporation, a Wisconsin corporation.






	 	 	 
	 
	 	        “Employer” or “Employers” means the Company and any subsidiary or

affiliate thereof which is a “Participating Employer” under the Pension

Plan.







	 	 	 
	 
	 	        “Group Annuity Contract” means Group Annuity Contract 8474-0

issued by Metropolitan Life Insurance Company to provide for the payment

of benefits accrued under a terminated pension plan previously maintained

by the Company’s predecessor.







	 	 	 
	 
	 	        “Participant” means an employee of the Employers who is a

participant in the Pension Plan and who is (or whose position is)

designated for participation herein by the board of directors of the

Company. As of the Effective Date, the following officers of Mortgage

Guaranty Insurance Corporation are designated as Participants:







	 	 	 
	 
	 	Chief Executive Officer

Chief Operating Officer

All Executive Vice Presidents

All Senior Vice Presidents







	 	 	 
	 
	 	        “Pension Plan” means the defined benefit pension plan maintained

by the Company known as the MGIC Investment Corporation Pension Plan and

any successor to such plan maintained by the Company or any successor or

affiliate of the Company.







	 
	        “Pension Plan Benefits” means the monthly benefits payable under the

terms of the Pension Plan and/or under the Group Annuity Contract.







	 	 	 
	 
	 	        In addition, (i) effective January 1, 1998, any employee of the

Employers not referred to above who is in salary grade 401 through 412,

inclusive, shall be in a position designated for participation in the

Plan, and (ii) after December 31, 1999, William H. Lacy, while he remains

an employee of an Employer, shall continue to be a participant in the

Plan.







	 	 	 
	4.

	 	Administration






        The Plan shall be administered by the Administrator of the Pension Plan
(“Administrator”). Decisions and determinations by the Administrator shall be final and binding on
all parties, except when manifestly contrary to the provisions of this Plan and except that no
presumption of validity shall be given to any such decision or determination with respect to
Section 5(d). The Administrator shall have the authority to interpret the Plan, to promulgate and
revise rules and regulations relating to the Plan and to make any other determinations which it
deems necessary or advisable for the administration thereof.



	 	 	 
	5.

	 	Pension Plan Supplement






        (a)     Any Participant who, upon termination of employment with the Employers after
the Effective Date has a vested and nonforfeitable right to a pension under the Pension Plan, or
such Participant’s spouse or other beneficiary, shall be entitled to a benefit payable hereunder in
accordance with this Section 5, equal to the excess, if any, of



	 	 	 
	 
	 	        (i)     the amount of such Participant’s, surviving spouse’s or

other beneficiary’s Pension Plan Benefits computed under the provisions

of the Pension Plan and Group Annuity Contract, but: determined without

regard to the limitations on benefits imposed by reason of Section 415 of

the Code or the limitation on considered compensation under Section

401(a)(17) of the Code; and, effective January 29, 2004, for an actively

employed officer of Mortgage Guaranty Insurance Corporation then

participating in the Plan, and for officers of Mortgage Guaranty

Insurance Corporation who participate in the Plan thereafter, determined

by adding to “Compensation,” as that term is defined in the Pension Plan,

the market value, determined as of the date of the award, of restricted

stock of the Company awarded (regardless of whether such stock is

subsequently forfeited) as part of such Participant’s bonus during any

year beginning on or after January 1, 1999, but excluding any such

restricted stock awarded to match an election of such Participant to

receive restricted stock; over







	 	 	 
	 
	 	        (ii)     the amount of Pension Plan Benefits actually payable to

such Participant, surviving spouse or other beneficiary for each month

under the Pension Plan and Group Annuity Contract, as computed under the

provisions of such Plan and Contract.







        The amount of Pension Plan Benefits in the computation under clauses (i) and (ii)
above shall exclude any Pension Plan Benefits earned after a Participant no longer occupies any
position designated for participation in the Plan.



        (b)     Benefits under this Section 5 shall become payable when the Participant or the
Participant’s spouse or other beneficiary begins to receive Pension Plan benefits and shall be
payable in the same manner, at the same time and in the same form as the benefits actually paid to
the Participant, spouse or other beneficiary under the Pension Plan.



        (c)     Notwithstanding the foregoing, no benefits shall be payable under this Plan to
or on behalf of any Participant whose employment with the Employers is terminated “for cause” or
who engages in “prohibited competition.” For purposes of this Plan, the term “for cause” shall mean
fraud, dishonesty, theft, gross negligence, willful misconduct in the performance of duties or
other similar causes. The term “prohibited competition” shall mean the rendering of services to any
competitor of the Employers (i) during the term of his employment by the Employers and (ii) for a
period of one year after any termination of the Participant’s employment in the geographic area or
areas (localized or national, as the case may be) in which he was employed, assigned or otherwise
worked on behalf of the Company, or a present or future parent, subsidiary or affiliate of the
Company, during the three years prior to the termination of his employment. For purposes of this
Plan, the term “competitor” means any corporation, partnership, proprietorship or firm (i) engaged
in the business of mortgage guaranty in any geographic area in which the Company or a present or
future parent, subsidiary or affiliate of the Company is so engaged or (ii) engaged in any other
business in which the Company or any subsidiary is engaged, in any geographic area in which the
Company or any subsidiary is so engaged, but only if such business accounted for at least 10% of
the revenues of the Company and its subsidiaries, on a consolidated basis, during the twelve months
preceding the month in which the Participant’s employment terminated.



        (d)     In the case of a Participant who first becomes a Participant in 1996, the
foregoing provisions of Section 5 shall be modified to the extent provided below:



	 	 	 
	 
	 	        (i)     For purposes of Section 5(a), such Participant shall be

deemed to have a vested and nonforfeitable right to a pension under the

Pension Plan.







	 	 	 
	 
	 	        (ii)     For purposes of clause (i) of Section 5(a), such

Participant (A) shall be deemed to have a Past Service Benefit under

Section 5.01(a) of the Pension Plan equal to $2,833.33 per month, and (B)

shall be deemed to have a number of years of Vesting Service under the

Pension Plan sufficient to be eligible for each benefit under the Pension

Plan and a vested percentage under the Pension Plan sufficient to avoid

any reduction in the amount of any such benefit.







	 	 	 
	 
	 	        (iii)     Section 5(b) shall not apply and benefits under this

Section 5 shall become payable when such Participant or such

Participant’s spouse or other beneficiary would have received Pension

Plan benefits assuming that such Participant’s deemed Vesting Service

under clause (ii) of this Section 5(d) was such Participant’s actual

Vesting Service under the Pension Plan and giving effect to any election

to commence receiving benefits filed with the Administrator as

contemplated below, except that if such an election is made under this

Plan and such Participant is also eligible to elect to commence receiving

benefits under the Pension Plan, such Participant shall also make such an

election under the Pension Plan. Benefits under this Plan shall be

payable in the same manner and in the same form as benefits would have

been payable to the Participant, spouse or other beneficiary under the

Pension Plan in accordance with the immediately preceding sentence if

such benefits were actually payable thereunder. Any election by such

Participant to commence receiving benefits or of the form of benefits

under this Plan shall be filed with the Administrator in accordance with

the same procedures as established under the Pension Plan, and in the

case of an election of the form of benefits, shall be the same as any

such election under the Pension Plan and shall be subject to the same

restrictions as under the Pension Plan.







	 	 	 
	 
	 	        (iv)     Section 5(c) shall apply only to benefits under this

Plan which are attributable to the Annual Pension Credits of such

Participant. No benefits under this Plan which are attributable to the

Past Service Benefit referred to in clause (ii) of this Section 5(d)

shall be payable to or on behalf of such Participant if (A) prior to the

third anniversary of such Participant’s first day as an employee of an

Employer, such Participant quits (as such term is used in Section 2.01

(a)(i) of the Pension Plan) as an employee of the Employers other than as

a result of a meaningful reduction in such Participant’s job status,

responsibilities or compensation, or (B) such Participant engages in

“prohibited competition,” as such term is used in Section 5(c).







	 	 	 
	 

	 	        (v)     Capitalized definitional terms used in this Section 5(d)

which are defined in the Pension Plan are used as so defined.






	 	 	 
	6.

	 	Plan Reserve






        (a)     The Company shall establish a bookkeeping reserve with respect to the benefits
provided under this Plan. Such reserve shall serve solely as a device for determining the amount of
the Company’s accrued deferred liability for the benefits provided herein, and shall not constitute
or be treated as a trust fund of any kind, it being expressly provided that the amounts credited to
the reserve shall be and remain the sole property of the Company, and that no Participant shall
have any proprietary rights of any nature whatsoever with respect thereto or with respect to any
investments the Company may make to aid it in meeting its obligations hereunder.



        (b)     No funds or other assets of the Company shall be segregated and attributable
to the amounts that may from time to time be credited to the reserve. Benefit payments under the
Plan shall be made from the general assets of the Company at the time any such payments become due
and payable. To the extent that any person acquires a right to receive payments from the Company
hereunder, such right shall be no greater than the right of an unsecured creditor.



	 	 	 
	7.

	 	Inter-Employer Reimbursements






        Although all benefit payments hereunder shall be made by the Company, the
Administrator shall determine whether any portion thereof is allocable to any other Employer on
account of its employment of one or more Participants. In any such case, the Company shall be
reimbursed by such other Employer in the amount and manner determined by the Administrator.



	 	 	 
	8.

	 	Non-Alienation of Payments






        Benefits payable under the Plan shall not be subject in any manner to alienation,
sale, transfer, assignment, pledge, attachment, garnishment or encumbrance of any kind, by will, or
by inter vivos instrument. Any attempt to alienate, sell, transfer, assign, pledge or otherwise
encumber any such benefit payment, whether currently or thereafter payable, shall be void and shall
not be recognized by the Administrator or the Company.



	 	 	 
	9.

	 	Limitation of Rights Against the Employers






        Participation in this Plan, or any modifications thereof, or the payments of any
benefits hereunder, shall not be construed as giving to any person any right to be retained in the
service of the Employers, limiting in any way the right of the Employers to terminate such person’s
employment at any time, or evidencing any agreement or understanding that the Employers will employ
such person in any particular position or at any particular rate of compensation.



	 	 	 
	10.

	 	Applicable Laws






        The Plan shall be construed, administered and governed in all respects under and by
the laws of the State of Wisconsin.



	 	 	 
	11.

	 	Liability






        Neither the Company nor any shareholder, director, officer or other employee of any
Employer or any other person shall be liable for any act or failure to act hereunder except for
gross negligence or fraud.



	 	 	 
	12.

	 	Amendment or Termination






        (a)     The Company, by action of its board of directors, reserves the right to amend
or terminate this Plan at any time, provided that no such amendment or modification shall adversely
affect the rights of any Participant, spouse or other beneficiary with respect to any benefits
under this Plan which have accrued to the effective date of such amendment, termination or
modification.



        (b)     It is understood that an individual’s entitlement to benefits under Section 5
of this Plan may be automatically reduced as the result of an increase in his Pension Plan
Benefits. Nothing herein shall be construed in any way to limit the right of the Company to amend
or modify the Pension Plan.



	 	 	 
	13.

	 	Code Section 409A Grandfathering






        (a)     The Plan shall be grandfathered to the maximum extent permitted under Internal
Revenue Code (Code) Section 409A.



        (b)     The amount of compensation deferred before January 1, 2005, under the Plan for
any Participant who, on December 31, 2004, had a vested and nonforfeitable right to a pension under
the Pension Plan, shall be determined in accordance with Treasury Regulation 1.409A-6(a)(3). For
purposes of calculating the present value of the grandfathered benefit amount, actuarial
assumptions and methods shall be the same as those used to determine the present value of lump sum
benefits under the Pension Plan as of each date such benefit is valued for purposes of determining
the grandfathered amount.



	 	 	 
	14.

	 	Fixed Time and Form of Non-Grandfathered Benefit Payment






       (a)     The payment provisions of Section 5(b) of the Plan, as in effect on
December 31, 2004, regarding form and time of payment of benefits shall not apply to the
non-grandfathered benefits described in this Section 14. All other terms of the SERP continue to
apply to the non-grandfathered benefit amount, including the forfeiture for cause or competition
provisions of Section 5(c).



        (b)     The amount of compensation deferred for any Participant under the Plan on or
after January 1, 2005, shall be paid in a single lump sum payment to the Participant, the
Participant’s surviving spouse, or other beneficiary, as applicable, on the first business day
after the date that is six months following the Participant’s “separation from service” within the
meaning of Section 409A of the Code, as determined by applying the default rules thereof. No
elections are permitted with regard to time or form of payment.



        (c)     The amount of compensation deferred on and after January 1, 2005, under the
Plan for a Participant shall be determined in accordance with the methodology described in Treasury
Regulation 1.409A-6(a)(3), but with regard to the full benefit amount to which the Participant, the
Participant’s surviving spouse, or other beneficiary, as applicable, is entitled under the Plan at
the time of actual payment, reduced by the grandfathered amount determined at the same time in
accordance with Section 13. For purposes of calculating the present value of the full benefit
amount, actuarial assumptions and methods shall be the same as those used to determine the present
value of lump sum benefits under the Pension Plan as of the date such benefit is valued for payment
purposes.



       (d)     If any amount of compensation paid or benefits provided pursuant to the SERP
may be includible in income under Code Section 409A, the Company shall, in consultation with the
affected Participant, modify the terms of the SERP as applicable to the affected Participant’s
benefits in the least restrictive manner necessary in order to comply with the provisions of Code
Section 409A, including taking into account other applicable provision (s) of the Code and/or any
rules, regulations or other regulatory guidance issued under such statutory provisions, and without
any diminution in the value of the payments to the Participant, the Participant’s surviving spouse,
or other beneficiary, as applicable.



	 	 	 
	15.

	 	Acceleration of or Delay in Payments






       (a)     The Administrator, in its sole and absolute discretion, may elect to accelerate
the time or form of payment of a benefit owed to the Participant hereunder, provided such
acceleration is permitted under Section 1.409A-3(j)(4) of the Income Tax Regulations (or any
successor provision thereto), including but not limited to an accelerated payment with respect to
the Participant’s non-grandfathered benefit to pay (a) the Federal Insurance Contributions Act tax
imposed under Code Sections 3101, 3121(a) and 3121(v)(2) on compensation deferred under the Plan
(the “FICA Amount”), and (b) the income tax at source on wages imposed under Code Section 3401 or
the corresponding withholding provisions of applicable state, local or foreign tax laws as a result
of the payment of the FICA Amount and to pay the additional income tax at source on wages
attributable to the pyramiding of wages under section 3401 and taxes; provided that the total
amount of any such accelerated payment of the Participant’s non-grandfathered benefit shall not
exceed the aggregate FICA Amount on such non-grand-fathered benefit and the income tax withholding
related to such FICA Amount. Any accelerated benefit payment made pursuant to this Section 15(a)
will reduce, on a dollar-for-dollar basis, the lump sum benefit payable under Section 14(b).



        (b)     The Administrator may also, in its sole and absolute discretion, delay the
time for payment of a benefit owed to the Participant hereunder, to the extent permitted under
Treas. Reg. Section 1.409A-2(b)(7) (or any successor provision thereto), including but not limited
to a delay in the payment of amounts for which, if paid as scheduled, are reasonably expected to
result in a loss to the Company of its tax deduction for the benefit payment due to application of
Code Section 162(m) and a delay in payment if payment would violate Federal securities laws or
other applicable law.