Document:

The PMI Group, Inc. Non-employee Director Phantom Stock Plan

 EXHIBIT 10.20 
 THE PMI GROUP, INC. 
 NON-EMPLOYEE DIRECTOR PHANTOM STOCK PLAN 
 (Effective January 15, 2009) 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 SECTION 1 BACKGROUND AND PURPOSE
	  	1
			
	 1.1
	  	Background and Effective Date	  	1
	 1.2
	  	Purpose of the Plan	  	1
		
	 SECTION 2 DEFINITIONS
	  	1
			
	 2.1
	  	“1934 Act”	  	1
	 2.2
	  	“Affiliate”	  	1
	 2.3
	  	“Award”	  	1
	 2.4
	  	“Award Agreement”	  	1
	 2.5
	  	“Board” or “Board of Directors”	  	2
	 2.6
	  	“Code”	  	2
	 2.7
	  	“Committee”	  	2
	 2.8
	  	“Company”	  	2
	 2.9
	  	“Director”	  	2
	 2.10
	  	“Disability”	  	2
	 2.11
	  	“Employee”	  	2
	 2.12
	  	“Equity Plan”	  	2
	 2.13
	  	“Fair Market Value”	  	3
	 2.14
	  	“Fiscal Year”	  	3
	 2.15
	  	“Grant Date”	  	3
	 2.16
	  	“Non-employee Director”	  	3
	 2.17
	  	“Participant”	  	3
	 2.18
	  	“Phantom Stock”	  	3
	 2.19
	  	“Plan”	  	3
	 2.20
	  	“Rule 16b-3”	  	3
	 2.21
	  	“Section 16 Person”	  	3
	 2.22
	  	“Shares”	  	3
		
	 SECTION 3 ADMINISTRATION
	  	3
			
	 3.1
	  	The Committee	  	3
	 3.2
	  	Authority of the Committee	  	3
	 3.3
	  	Delegation by the Committee	  	4
	 3.4
	  	Eligibility to Participate	  	4
	 3.5
	  	Decisions Binding	  	4
		
	 SECTION 4 SHARES SUBJECT TO THE PLAN
	  	4
			
	 4.1
	  	Number of Shares	  	4
	 4.2
	  	Adjustments in Awards and Authorized Shares	  	4
		
	 SECTION 5 PHANTOM STOCK
	  	4
			
	 5.1
	  	Grant of Phantom Stock	  	4
	 5.2
	  	Terms of Phantom Stock	  	5
	 5.3
	  	Value of Phantom Stock	  	5
	 5.4
	  	Form and Timing of Payment of Phantom Stock	  	5

  

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	 	  	 	  	Page
	 5.5
	  	Dividends and Other Distributions	  	5
		
	 SECTION 6 MISCELLANEOUS
	  	5
			
	 6.1
	  	No Enlargement of Rights	  	5
	 6.2
	  	Indemnification	  	6
	 6.3
	  	Successors	  	6
	 6.4
	  	Beneficiary Designations	  	6
	 6.5
	  	Limited Transferability of Awards	  	6
	 6.6
	  	Withholding Requirements	  	7
	 6.7
	  	No Rights as Stockholder	  	7
		
	 SECTION 7 AMENDMENT, TERMINATION, AND DURATION
	  	7
			
	 7.1
	  	Amendment, Suspension, or Termination	  	7
	 7.2
	  	Duration of the Plan	  	7
		
	 SECTION 8 LEGAL CONSTRUCTION
	  	8
			
	 8.1
	  	Gender and Number	  	8
	 8.2
	  	Severability	  	8
	 8.3
	  	Requirements of Law	  	8
	 8.4
	  	Securities Law Compliance	  	8
	 8.5
	  	Section 409A	  	8
	 8.6
	  	Governing Law	  	8
	 8.7
	  	Captions	  	9
		
	 EXECUTION
	  	9

  

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 THE PMI GROUP, INC. 
 NON-EMPLOYEE DIRECTOR PHANTOM STOCK PLAN 
 (Effective January 15, 2009) 
 SECTION 1 
 BACKGROUND AND PURPOSE 

1.1 Background and Effective Date The Plan provides for the grant of Phantom Stock to Non-employee Directors. The Plan is effective as of
January 15, 2009. 
 1.2 Purpose of the Plan The Plan is intended to attract, motivate, and retain outstanding and highly
talented directors of the Company who are employees of neither the Company nor of any Affiliate. 
 SECTION 2 
 DEFINITIONS 
 The following words and phrases
shall have the following meanings unless a different meaning is plainly required by the context: 
 2.1 “1934 Act” means the
Securities Exchange Act of 1934, as amended. Reference to a specific section of the 1934 Act or regulation thereunder shall include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any
future legislation or regulation amending, supplementing or superseding such section or regulation. 
 2.2 “Affiliate” means
any corporation or any other entity (including, but not limited to, partnerships and joint ventures) controlling, controlled by, or under common control with the Company. 
 2.3 “Award” means, individually or collectively, a grant under the Plan of Phantom Stock. 
 2.4 “Award Agreement” means the written agreement setting forth the terms and provisions applicable to each Award granted under the Plan. 
  

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 2.5 “Board” or “Board of Directors” means the Board of Directors of the
Company, as constituted from time to time, except that any action that could be taken by the Board of Directors may also be taken by a duly authorized Committee of the Board of Directors. 
 2.6 “Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder
shall include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation. 
 2.7 “Committee” means the committee appointed by the Board (pursuant to Section 3.1) to administer the Plan. 
 2.8 “Company” means The PMI Group, Inc., a Delaware corporation, or any successor thereto. 
 2.9 “Director” means any individual who is a member of the Board of Directors of the Company. 
 2.10 “Disability” means a permanent and total disability determined in accordance with uniform and nondiscriminatory standards adopted
by the Committee from time to time. 
 2.11 “Employee” means any employee of the Company or of an Affiliate, whether such
employee is so employed at the time the Plan is adopted or becomes so employed subsequent to the adoption of the Plan. 
 2.12
“Equity Plan” means the Company’s Amended and Restated Equity Incentive Plan, as amended from time to time. 
  

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 2.13 “Fair Market Value” means the closing price per Share on the New York Stock
Exchange on the relevant date, or if there were no sales on such date, the closing price per Share on the nearest day after the relevant date, as determined by the Committee. Notwithstanding the preceding, for federal, state, and local income tax
reporting purposes, fair market value shall be determined by the Committee (or its delegate) in accordance with uniform and nondiscriminatory standards adopted by it from time to time. 
 2.14 “Fiscal Year” means the fiscal year of the Company. 
 2.15 “Grant Date” means, with respect to an Award, the date that the Award was granted. 
 2.16 “Non-employee Director” means a Director who is an employee of neither the Company nor of any Affiliate. 
 2.17 “Participant” means a Non-employee Director who has an outstanding Award. 
 2.18 “Phantom
Stock” means an Award granted to a Participant pursuant to Section 5. 
 2.19 “Plan” means The PMI Group, Inc.
Non-employee Director Phantom Stock Plan, as set forth in this instrument and as hereafter amended from time to time. 
 2.20 “Rule
16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any future regulation amending, supplementing or superseding such regulation. 
 2.21 “Section 16 Person” means a person who, with respect to the Shares, is subject to Section 16 of the 1934 Act. 
 2.22 “Shares” means the shares of common stock of the Company. 
 SECTION 3 
 ADMINISTRATION 
 3.1 The
Committee  The Plan shall be administered by the Committee. The Committee shall consist of no fewer than two (2) Directors who shall be appointed from time to time by, and shall serve at the pleasure of, the Board of Directors. The
Committee shall be comprised solely of Directors who are “non-employee directors” under Rule 16b-3. Unless and until otherwise determined by the Board, the Governance and Nominating Committee of the Board shall serve as the Committee.

 3.2 Authority of the Committee  It shall be the duty of the Committee to administer the Plan in accordance with the
Plan’s provisions. The Committee shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (a) interpret the Plan and the Awards,
(b) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Non-employee Directors who are 

  

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foreign nationals or employed outside of the United States, (c) adopt rules for the administration, interpretation and application of the Plan as are
consistent therewith, (d) interpret, amend or revoke any such rules and (e) amend the terms of any Award, including, but not limited to, the power to accelerate the vesting of Awards. 
 3.3 Delegation by the Committee  The Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all
or any part of its authority and powers under the Plan to one or more Directors or officers of the Company; provided, however, that the Committee may not delegate its authority and powers in any way that would jeopardize the Plan’s
qualification under Rule 16b-3. 
 3.4 Eligibility to Participate  No member of the Committee who is also a Non-employee Director
shall be excluded from participating in the Plan if otherwise eligible, but he or she shall not be entitled, as a member of the Committee, to act or pass upon any matters pertaining specifically to her or her own rights or Awards under the Plan.

 3.5 Decisions Binding  All determinations and decisions made by the Committee, the Board, and any delegate of the Committee
pursuant to the provisions of the Plan shall be final, conclusive, and binding on all persons, and shall be given the maximum deference permitted by law. 
 SECTION 4 
 SHARES SUBJECT TO THE PLAN 
 4.1 Number of Shares  Subject to adjustment as provided in Section 4.2, the total number of shares of Phantom Stock available for grant
under the Plan shall not exceed 2,000,000. 
 4.2 Adjustments in Awards and Authorized Shares  In the event that any dividend or
other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate structure of the Company that affects the Shares, then the Committee shall, in such manner as it may deem equitable, adjust the number of shares of Phantom Stock that may be
delivered under the Plan, and the outstanding Awards, as determined by the Committee (in its sole discretion) to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the
Plan. 
 SECTION 5 
 PHANTOM STOCK

 5.1 Grant of Phantom Stock  On the first business day on or after January 15, April 15, July 15, and
October 15 of each year, each individual then serving as a Non-employee Director automatically shall be granted a number of shares of Phantom Stock equal to the result of the “Grant 
  

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Amount” divided by the Fair Market Value of a Share on the Grant Date. On any Grant Date, the Grant Amount will equal the sum of (a) $8,500, plus
(b) the dollar value of any shortfall below $4,000 in the initial value of “Stock Units” (as defined in the Equity Plan) to be granted to the Non-employee Director under the Equity Plan on that date. 
 5.2 Terms of Phantom Stock Award Agreement. Each Award granted pursuant to this Section 5 shall be evidenced by an Award Agreement
(satisfactory to the Committee) that shall contain such terms and conditions as the Committee, in its sole discretion, shall determine. 
 5.2.2 Vesting. Each Award granted pursuant to this Section 5 shall vest upon the first to occur of the following events: 
 (a) The expiration of five (5) years from the Grant Date; or 
 (b) Cessation of a Participant’s service as a Non-employee Director for any reason, including, but not limited to, death, Disability,
retirement, resignation or non-reelection to the Board. 
 5.3 Value of Phantom Stock  On any date, each share of Phantom Stock
shall have a value equal to the Fair Market Value of a Share on that date. 
 5.4 Form and Timing of Payment of Phantom Stock. Payment
of vested Phantom Stock shall be made in cash and in a single lump sum as soon as practicable after vesting (but in no event more than two and one-half months after vesting). 
 5.5 Dividends and Other Distributions  Participants holding unvested shares of Phantom Stock shall be entitled to receive the cash equivalent
of all dividends and other distributions paid with respect to Shares as determined by the Committee. Any such dividends or distributions shall be subject to the same restrictions on transferability and forfeitability, and form and timing of payment,
as the Phantom Stock with respect to which they were deemed paid. 
 SECTION 6 
 MISCELLANEOUS 
 All amounts subject to Awards granted to a Participant under the Plan
shall be paid from the general assets of the Company. The interest of the Participant in his or her Awards, including his or her right to cash settlement thereof, shall be an unsecured claim against the general assets of the Company. Nothing
contained in the Plan shall give any Participant or beneficiary any interest in or claim against any specific assets of the Company. 
 6.1
No Enlargement of Rights Nothing in the Plan shall be held or construed to confer upon any individual any right to continue as a member of the Board of Directors. 
  

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 6.2 Indemnification Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from (a) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit,
or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any Award Agreement, and (b) from any and all amounts paid by him or her in settlement
thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided that he or she first shall give the Company an opportunity, at its own
expense, to handle and defend the same and if the Company fails to do so, he or she then may undertake to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them
harmless. 
 6.3 Successors All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding
on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company. 
 6.4 Beneficiary Designations If permitted by the Committee, a Participant under the Plan may name a beneficiary or beneficiaries to whom any
vested but unpaid Award shall be paid in the event of the Participant’s death. Each such designation shall revoke all prior designations by the Participant and shall be effective only if given in a form and manner acceptable to the Committee.
If a Participant designates a person other than or in addition to his or her spouse as a primary beneficiary, the designation shall be ineffective unless the Participant’s spouse consents to the designation. Any spousal consent required under
this Section shall be ineffective unless it (a) is set forth in writing in a form specified in the discretion of the Committee, (b) acknowledges the effect of the Participant’s designation of another person as his or her
beneficiary under the Plan, and (c) is signed by the spouse and witnessed by an authorized agent of the Committee or a notary public. Notwithstanding this consent requirement, if the Participant establishes to the satisfaction of the Committee
that written spousal consent may not be obtained because the spouse cannot be located, his or her designation shall be effective without spousal consent. Any spousal consent required under this Section shall be valid only with respect to the
spouse who signs the consent. A Participant may revoke his or her beneficiary designation at any time, provided that such revocation is in writing. 
 In the absence of any such designation, any vested benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate and, subject to the terms of the Plan and of the applicable Award Agreement, any
unexercised vested Award may be exercised by the administrator or executor of the Participant’s estate. 
 6.5 Limited
Transferability of Awards  No Award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution, or to the limited extent provided
in Section 6.4. All rights with respect to an Award granted to a Participant shall be available during his or her lifetime only to the 

  

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Participant. Notwithstanding the foregoing, the Participant may, in a manner specified by the Committee, (a) transfer an Award to a Participant’s
spouse, former spouse or dependent pursuant to a court-approved domestic relations order which relates to the provision of child support, alimony payments or marital property rights, and (b) transfer an Award by bona fide gift and not for any
consideration, to (i) a member or members of the Participant’s immediate family, (ii) a trust established for the exclusive benefit of the Participant and/or member(s) of the Participant’s immediate family, (iii) a
partnership, limited liability company or other entity whose only partners or members are the Participant and/or member(s) of the Participant’s immediate family, and/or (iv) a foundation in which the Participant and/or member(s) of the
Participant’s immediate family control the management of the foundation’s assets. 
 6.6 Withholding Requirements Prior to
the payment of any cash pursuant to an Award, the Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes, if any, required
to be withheld with respect to such Award (or exercise thereof). 
 6.7 No Rights as Stockholder Except to the limited extent provided
in Section 5.5, no Participant (nor any beneficiary) shall have any of the rights or privileges of a stockholder of the Company with respect to any Award. 
 SECTION 7 
 AMENDMENT, TERMINATION, AND DURATION 
 7.1 Amendment, Suspension, or Termination The Board, in its sole discretion, may amend, suspend or terminate the Plan, or any part thereof, at any
time and for any reason. The amendment, suspension, or termination of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Award theretofore granted to such Participant. No Award may be
granted during any period of suspension or after termination of the Plan. 
 7.2 Duration of the Plan The Plan shall be effective as
of January 15, 2009, and subject to Section 7.1 (regarding the Board’s right to amend or terminate the Plan), shall remain in effect through January 15, 2019. No Awards may be granted under the Plan after January 15, 2019.
However, the Plan shall remain in effect until all Awards granted on or before that date have been paid, settled or otherwise have expired or been canceled. 
  

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 SECTION 8 
 LEGAL CONSTRUCTION 
 8.1 Gender and Number  Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. 
 8.2 Severability  In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included. 
 8.3 Requirements of Law  The granting of Awards and the
issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 
 8.4 Securities Law Compliance  With respect to Section 16 Persons, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3. To the extent any provision of the Plan, Award Agreement or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee.

 8.5 Section 409A  The Plan is intended to comply with the requirements of Section 409A of the Code so that none of
the payments and benefits provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. Notwithstanding anything to the contrary in the Plan, including but not
limited to Section 7.1 hereunder, the Board reserves the right to amend the Plan and/or the Awards as it deems necessary or advisable, in its sole discretion and without the consent of the Participants, to comply with Section 409A of the
Code and to avoid the imposition of any additional tax under Section 409A (provided that no such amendment shall materially reduce the benefits provided hereunder). 
 8.6 Governing Law  The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the State of California (but without reference to its conflicts of laws provisions).

  

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 8.7 Captions. Captions are provided herein for convenience only, and shall not serve as a basis
for interpretation or construction of the Plan. 
 EXECUTION 
 IN WITNESS WHEREOF, the Company, by its duly authorized officer, has executed this restated Plan on the date indicated below. 
  

									
		 		 	THE PMI GROUP, INC.
					
	Dated:	 	January 16, 2009	 		 	By	 	/s/ Charles Broom
		 		 		 		 	Charles Broom
		 		 		 		 	Senior Vice President, Human Resources

  

 -9-Form of Phantom Stock Agreement for Non-Employee Directors

 EXHIBIT 10.20a 
 THE PMI GROUP, INC. 
 PHANTOM STOCK AGREEMENT 
 The PMI Group, Inc. (the “Company”) hereby grants you,
                             (the “Director”), the number of shares of Phantom Stock under
the Company’s Non-employee Director Phantom Stock Plan (the “Plan”) indicated below. Subject to the provisions of Appendix A and of the Plan, the principal features of this award are as follows: 
 Date of Grant: 
 Number of shares of Phantom Stock:
             
 Vesting of Phantom Stock: 100% of the shares of Phantom Stock shall vest
upon the first to occur of (1) the fifth anniversary of the Date of Grant or (2) the cessation of your service as a Non-employee Director for any reason. 
 This award is subject to all of the terms and conditions contained in Appendix A and the Plan. PLEASE BE SURE TO READ ALL OF APPENDIX A, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS AWARD.

  

	
	THE PMI GROUP, INC.
	
	  
	Charles F. Broom
	Senior Vice President

 APPENDIX A 
 TERMS AND CONDITIONS OF PHANTOM STOCK GRANT 
 1. Grant of Phantom Stock. The Company hereby grants to
the Director under the Plan the number of shares of Phantom Stock indicated on the first page of this Agreement subject to the terms and conditions set forth in this Agreement and the Plan. 
 2. Company’s Obligation to Pay. On any date, a share of Phantom Stock has a value equal to the Fair Market Value of one Share. Unless and
until the shares have vested in accordance with the Vesting Schedule set forth on the first page of this Agreement, the Director will have no right to payment of the Phantom Stock. Prior to actual payment of any vested shares of Phantom Stock, the
shares represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company. 
 3. Payment
after Vesting. Subject to Section 5, Shares of Phantom Stock that vest will be paid to the Director (or in the event of the Director’s death, to his or her estate) in cash as soon as practicable following the date of vesting (but in
all events within two and one-half months after vesting). 
 4. Death of Director. Any distribution or delivery to be made to the
Director under this Agreement will, if the Director is then deceased, be made to the Director’s designated beneficiary or if no beneficiary survives the Director, the administrator or executor of the Director’s estate, notwithstanding the
Specified Participant six (6) month delay as described below. Any such transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the
validity of the transfer and compliance with any laws or regulations pertaining to said transfer. 
 5. Specified Participant.
Notwithstanding any contrary Plan provision, any payment(s) that are required to be made under the Plan or this Agreement to a Specified Participant due to his or her termination of service (other than due to death) shall be accumulated during the
first six (6) months following the termination of service and shall instead be paid on the payment date that immediately follows the end of such six-month period or as soon as administratively practicable thereafter, unless the Director dies
during such six (6) month period, in which case, the cash settlement of the Phantom Stock will be paid to the Director’s estate as soon as practicable following his or her death, subject to Section 6. It is the intent of this
Agreement to comply with the requirements of Section 409A so that none of the Phantom Stock provided under this Agreement or the cash payable with respect thereto will be subject to the additional tax imposed under Section 409A, and any
ambiguities herein will be interpreted to so comply. For purposes of this Agreement, “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and any proposed, temporary or final
Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time. 
 A “Specified
Participant” means a Participant who, as of the date of his or her termination of service, is a key employee of the Company. For this purpose, a Participant shall be deemed to be a “key employee” of the Company if he or she meets the
requirements of section 416(i)(1)(A)(i), (ii)

  

 1 

 
or (iii) of the Code (applied in accordance with the regulations thereunder and disregarding section 416(i)(5) of the Code) at any time during the
12-month period ending on September 30 (the “Identification Date”). In this connection, the definition of “compensation” under Treasury regulation section 1.415(c)-2(a) will be used, applied as if no safe harbor provided in
Treasury regulation section 1.415(c)-2(d) were used, no elective special timing rules provided in Treasury regulation section 1.415(c)-2(e) were used, and no elective special rules provided in Treasury regulation section 1.415(c)-2(g) were used. If
a Participant is a key employee of the Company as of any Identification Date, then he or she will be treated as such for the entire 12-month period beginning on the first day of the fourth month following the Identification Date. 
 6. Withholding of Taxes. The Company will withhold a portion of the payment due with respect to vested shares of Phantom Stock that has an
aggregate market value sufficient to pay the federal, state, and local income, employment, and any other applicable taxes, if any, required to be withheld by the Company, unless the Company, in its sole discretion, either requires or otherwise
permits the Director to make alternate arrangements satisfactory to the Company for such withholdings in advance of the arising of any withholding obligations. Notwithstanding any contrary provision of this Agreement, no payment will be made to the
Director (or his or her beneficiary or estate) for any Phantom Stock unless and until satisfactory arrangements (as determined by the Committee) have been made by the Director with respect to the payment of any income and other taxes that the
Company determines must be withheld or collected with respect to the Director’s vested Phantom Stock. All income and other taxes related to this Phantom Stock award and any payment delivered with respect thereto are the sole responsibility of
the Director. By accepting this award, the Director expressly consents to the withholding described in this Section 6. 
 7. Rights
as Stockholder. Subject to Section 8, neither the Director nor any person claiming under or through the Director will have any of the rights or privileges of a stockholder of the Company in respect of any shares of Phantom Stock.

 8. Dividends and Distributions. The Director shall be entitled to receive the cash equivalent of dividends and distributions paid
on shares underlying unvested shares of Phantom Stock. Any dividends or other distributions automatically shall be deemed reinvested in Phantom Stock (the “Dividend Phantom Stock”). Dividend Phantom Stock shall be subject to the same terms
and conditions as the Phantom Stock, including (but not limited to) vesting and time and form of payment. 
 9. No Effect on Service.
The transactions contemplated hereunder and the Vesting Schedule set forth on the first page of this Agreement do not constitute an express or implied promise of continued service for any period of time. The terms of the Director’s service
shall not be affected by the grant of this award. 
 10. Address for Notices. Any notice to be given to the Company under the terms of
this Agreement must be addressed to the Company, in care of Human Resources, The PMI Group, Inc., 3003 Oak Road, Walnut Creek, CA, 94597, or at such other address as the Company may hereafter designate in writing. 
  

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 11. Grant is Not Transferable. Except as otherwise expressly provided herein, this grant, and the
rights and privileges conferred hereby, may not be transferred, assigned, pledged, or hypothecated in any way (whether by operation of law or otherwise) and may not be subject to sale under execution, attachment, or similar process. Upon any attempt
to transfer, assign, pledge, hypothecate, or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment, or similar process, this grant and the rights and privileges
conferred hereby immediately will become null and void. 
 12. Binding Agreement. Subject to the limitation on the transferability of
this grant contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors, and assigns of the Company and the Director. 
 13. Plan Governs. This Agreement is subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of
this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern. Capitalized terms used and not defined in this Agreement will have the meaning set forth in the Plan. 
 14. Committee Authority. The Committee will have the power to interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation, and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any shares of Phantom Stock have vested). All
actions taken and all interpretations and determinations made by the Committee in good faith will be final and binding upon the Director, the Company, and all other interested persons. No member of the Committee will be personally liable for any
action, determination, or interpretation made in good faith with respect to the Plan or this Agreement. 
 15. Captions. Captions
provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 
 16.
Agreement Severable. In the event that any provision in this Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the
remaining provisions of this Agreement. 
 17. Modifications to the Agreement. This Agreement constitutes the entire understanding of
the Company and the Director on the subjects covered. The Director is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Agreement or the Plan can be
made only in an express written agreement executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise this Agreement as it deems necessary or
advisable, in its sole discretion and without the consent of the Director, to comply with Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A prior to the actual payment of cash in
settlement of this award of Phantom Stock. 
 18. Amendment, Suspension or Termination of the Plan. By accepting this award, the
Director expressly warrants that he or she has received a right to an equity based award under the Plan, and has received, read, and understood a description of the Plan. The Director understands that the Plan is discretionary in nature and may be
modified, suspended, or terminated by the Company at any time. 
  

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 19. Notice of Governing Law. This award of Phantom Stock shall be governed by, and construed in
accordance with, the laws of the State of California, without regard to principles of conflict of laws. 
 o O o 
  

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