Document:

Tax Benefits Preservation Plan

 Exhibit 4.1 

TAX BENEFITS PRESERVATION PLAN 

dated as of 

August 12, 2010 

between 
 THE PMI
GROUP, INC., 
 and 

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC 

as Rights Agent 

 Table of Contents 

 

					
	 	  	 	 	Page
	 Section 1.
	  	Definitions	 	1
	 Section 2.
	  	Other Definitional and Interpretative Provisions	 	7
	 Section 3.
	  	Issuance of Rights and Right Certificates	 	7
	 Section 4.
	  	Form of Right Certificates	 	9
	 Section 5.
	  	Registration; Transfer and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	 	9
	 Section 6.
	  	Exercise of Rights	 	10
	 Section 7.
	  	Cancellation and Destruction of Right Certificates	 	12
	 Section 8.
	  	Reservation and Availability of Capital Stock	 	12
	 Section 9.
	  	Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights	 	13
	 Section 10.
	  	Certificate of Adjusted Purchase Price or Number of Shares	 	17
	 Section 11.
	  	Fractional Rights and Fractional Shares	 	17
	 Section 12.
	  	Rights of Action	 	18
	 Section 13.
	  	Agreement of Right Holders	 	19
	 Section 14.
	  	Right Certificate Holder Not Deemed a Stockholder	 	19
	 Section 15.
	  	Appointment of Rights Agent	 	20
	 Section 16.
	  	Merger or Consolidation or Change of Name of Rights Agent	 	20
	 Section 17.
	  	Duties of the Rights Agent	 	21
	 Section 18.
	  	Change of Rights Agent	 	23
	 Section 19.
	  	Redemption	 	24
	 Section 20.
	  	Exchange	 	24
	 Section 21.
	  	Notice of Proposed Actions and Certain Other Matters	 	25
	 Section 22.
	  	Notices	 	26
	 Section 23.
	  	Supplements and Amendments	 	27
	 Section 24.
	  	Successors	 	27
	 Section 25.
	  	Determinations and Actions by the Board, etc.	 	27
	 Section 26.
	  	Benefits of This Plan	 	28
	 Section 27.
	  	Severability	 	28
	 Section 28.
	  	Governing Law	 	28
	 Section 29.
	  	Counterparts	 	28
	 Section 30.
	  	Descriptive Headings	 	28
			
	 Exhibit A
	  	Form of Certificate of Designation of Preferred Stock	 	
	 Exhibit B
	  	Summary of Terms	 	
	 Exhibit C
	  	Form of Right Certificate	 	

 TAX BENEFITS PRESERVATION PLAN 

TAX BENEFITS PRESERVATION PLAN (this “Plan”) dated as of August 12, 2010, between The PMI Group, Inc., a Delaware
corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, as Rights Agent (the “Rights Agent”). 

W I T N E S S E T H 

WHEREAS, (a) the Company and certain of its Subsidiaries have generated certain Tax Benefits (as defined below) for United States
federal income tax purposes; (b) the Company desires to avoid an “ownership change” within the meaning of Section 382 (as defined below), and thereby preserve the Company’s ability to utilize such Tax Benefits, and
(c) in furtherance of such objective, the Company desires to enter into this Plan; 
 WHEREAS, on August 12, 2010, the
Board of Directors of the Company authorized and declared a dividend of one preferred stock purchase right (a “Right”) for each share of Common Stock (as defined below) outstanding at the close of business (as defined below) on
August 23, 2010 (the “Record Date”) and authorized the issuance, upon the terms and subject to the conditions herein, of one Right (subject to adjustment) in respect of each share of Common Stock issued after the Record Date,
each Right representing the right to purchase, upon the terms and subject to the conditions herein, one one-millionth (subject to adjustment) of a share of Preferred Stock (as defined below); 

NOW, THEREFORE, the parties hereto agree as follows: 

Section 1. Definitions. The following terms, as used herein, have the following meanings: 

“5% Shareholder” means (i) a Person or group of Persons that is a “5-percent shareholder” of the Company
pursuant to Treasury Regulation Section 1.382-2T(g) or (ii) a Person that is a “first tier entity” or “higher tier entity” (as such terms are defined in Treasury Regulation Section 1.382-2T(f)) of the Company if
that Person has a “public group” or individual, or a “higher tier entity” of that Person has a “public group” or individual, that is treated as a “5-percent shareholder” of the Company pursuant to Treasury
Regulation Section 1.382-2T(g). 
 “Acquire” (or “Own”) means to obtain (or have,
respectively) ownership for purposes of Section 382 of the Code without regard to the constructive ownership rules described in Treasury Regulation Section 1.382-2T(h)(2), (h)(3) and (k) (and “Acquisition” shall have
a correlative meaning). 
 “Acquiring Person” means any Person who or which is or becomes a 5% Shareholder
(other than by reason of Treasury Regulation Section 1.382-2T(j)(3)(i) or 
  

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solely as a result of a transaction in which no “5-percent shareholder” (as defined in Section 382 of the Code and Treasury Regulations thereunder) experiences an increase in its
percentage stock ownership interest of the Company, as determined in accordance with Treasury Regulation Sections 1.382-2(a), 1.382- 2T(g), (h), (j) and (k)), whether or not such Person continues to be a 5% Shareholder, but shall not include:

 (i) any Exempt Person; 

(ii) any Grandfathered Person; 

(iii) any Person who or which the Board determines, in its sole discretion, has inadvertently become a 5% Shareholder (or
has inadvertently failed to continue to qualify as a Grandfathered Person), so long as such Person promptly enters into, and delivers to the Company, an irrevocable commitment promptly to divest and thereafter promptly divests (without exercising or
retaining any power, including voting, with respect to such securities), sufficient Company Securities so that such Person’s Percentage Stock Ownership is less than 5% (or, in the case of any Person who or which has inadvertently failed to
continue to qualify as a Grandfathered Person, the Company Securities that caused such Person to so fail to qualify as a Grandfathered Person; 

(iv) any Person that has become a 5% Shareholder if the Board in good faith determines that such Person’s attainment
of 5% Shareholder status has not jeopardized or endangered the Company’s utilization of the Tax Benefits or is otherwise in the best interests of the Company; provided that such Person does not increase its Percentage Stock Ownership
over such Person’s lowest Percentage Stock Ownership immediately following such determination by the Board, other than any increase pursuant to or as a result of (A) a stock dividend, stock split, reverse stock split or similar transaction
effected by the Company or (B) any redemption of Company Securities by the Company; and provided further that such Person shall be an “Acquiring Person” if the Board makes a contrary determination in good faith; 

(v) any Person if, on the date that would have been (absent this clause (v) of the definition of “Acquiring
Person”) a Stock Acquisition Date with respect to such Person, such Person does not Beneficially Own any Company Securities; and 

(vi) any Person that Beneficially Owns at least a majority of the Common Stock following consummation of a Qualified
Offer. 
 “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling,
controlled by or under common control with, such other Person. For purposes of this definition, “control” (including, with correlative meanings, the terms 

 

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“controlled by” and “under common control with”) when used with respect to any Person, means the possession, directly or indirectly, of the power to cause the
direction of management and/or policies of such Person, whether through the ownership of voting securities by contract or otherwise. 

A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “Beneficially Own,” any
securities (i) which such Person directly owns or (ii) which such Person would be deemed to constructively own pursuant to Section 382 of the Code and the Treasury Regulations promulgated thereunder. 

“Board” means the Board of Directors of the Company. 

“Business Day” means any day other than a Saturday, Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close. 
 “close of business” on any given date
means 5:00 p.m., New York City time, on such date; provided that if such date is not a Business Day “close of business” means 5:00 p.m., New York City time, on the next succeeding Business Day. 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. 

“Common Stock” means the Common Stock, par value $0.01 per share, of the Company. 

“Company Securities” means (i) shares of Common Stock, (ii) shares of preferred stock (other than Straight
Preferred Stock) of the Company, (iii) warrants, rights, or options (including any interest treated as an option pursuant to Treasury Regulation Section 1.382-4(d)(9)) to acquire stock (other than Straight Preferred Stock) of the Company
and (iv) any other interest that would be treated as “stock” of the Company pursuant to Treasury Regulation Section 1.382- 2T(f)(18). 

“Distribution Date” means the earlier of (i) the close of business on the tenth Business Day after a Stock
Acquisition Date and (ii) the close of business on the tenth Business Day (or such later day as may be designated prior to a Stock Acquisition Date by the Board) after the date of the commencement of a tender or exchange offer by any Person if,
upon consummation thereof, such Person would or could be an Acquiring Person; provided, however, that if either of such dates occurs after the public announcement of this Plan and on or prior to the Record Date, then the Distribution
Date shall be the Record Date. 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, unless
otherwise expressly specified. 
  

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 “Exempt Person” means the Company, any Subsidiary of the Company (in each
case including, without limitation, in any fiduciary capacity), any employee benefit plan or compensation arrangement of the Company or any Subsidiary of the Company, or any entity or trustee holding Company Securities to the extent organized,
appointed or established by the Company or any Subsidiary of the Company for or pursuant to the terms of any such employee benefit plan or compensation arrangement. 

“Expiration Date” means the earliest of (i) the Final Expiration Date, (ii) the time at which all Rights are
redeemed as provided in Section 19 or exchanged as provided in Section 20, (iii) the first day of a taxable year of the Company as to which the Board of Directors determines that no Tax Benefits may be carried forward, (iv) a
date prior to a Stock Acquisition Date on which the Board of Directors determines that the Rights and the Plan are no longer necessary for the preservation or existence of the Tax Benefits or are no longer in the best interests of the Company and
its shareholders and (v) the repeal or amendment of Section 382 or any successor statute, if the Board of Directors determines that this Plan is no longer necessary for the preservation of Tax Benefits. 

“Final Expiration Date” means August 11, 2011. 

“Grandfathered Person” means: 
  

	 	(i)	any Person who would otherwise qualify as an Acquiring Person as of immediately prior to the public announcement of this Plan, unless and until such Person’s
Percentage Stock Ownership shall be increased by more than one-tenth of one percentage point over such Person’s lowest Percentage Stock Ownership immediately prior to the public announcement of this Plan or thereafter, other than any increase
pursuant to or as a result of (A) the exercise of any option, warrant or convertible instrument to purchase Company Securities that such Person held as of immediately prior to the public announcement of this Plan, (B) a stock dividend,
stock split, reverse stock split or similar transaction effected by the Company or (C) any redemption or repurchase of Company Securities by the Company; and 

 

	 	(ii)	any Person who would otherwise qualify as an Acquiring Person as a result of a redemption or repurchase of Company Securities by the Company, unless and until such
Person’s Percentage Stock Ownership shall be increased by more than one-tenth of one percentage point over such Person’s lowest Percentage Stock Ownership on or after the date of such redemption or repurchase, other than any increase
pursuant to or as a result of (A) a stock dividend, stock split, reverse stock split or similar transaction effected by the Company or (B) any subsequent redemption or repurchase of Company Securities by the Company.

  

 4 

 “Percentage Stock Ownership” means the percentage stock ownership interest
of the Company, as determined in accordance with Treasury Regulation Sections 1.382-2(a)(3), 1.382-2T(g), (h), (j) and (k); provided, however, that for the sole purpose of determining the percentage stock ownership of any entity
(and not for the purpose of determining the percentage stock ownership of any other Person), Company Securities held by such entity shall not be treated as no longer owned by such entity pursuant to Treasury Regulation Section 1.382-
2T(h)(2)(i)(A). 
 “Person” means any individual, firm, corporation, partnership, trust association, limited
liability company, limited liability partnership, governmental entity, or other entity, or any group of Persons making a “coordinated acquisition” of shares or otherwise treated as an entity within the meaning of Treasury Regulation
Section 1.382-3(a)(1)(i) and shall include any successor (by merger or otherwise) of any such entity. 
 “Preferred
Stock” means the Series A Participating Preferred Stock, $0.01 par value per share, of the Company, having the terms set forth in the form of certificate of designation attached hereto as Exhibit A. 

“Purchase Price” means the price (subject to adjustment as provided herein) at which a holder of a Right may purchase
one one-millionth of a share of Preferred Stock (subject to adjustment as provided herein) upon exercise of a Right, which price shall initially be $15.00. 

“Qualified Offer” shall mean an offer determined by a majority of the Board to have each of the following
characteristics with respect to the Common Stock: 
  

	 	(i)	a tender or exchange offer for all of the outstanding shares of Common Stock at the same per-share consideration; 

 

	 	(ii)	an offer that has commenced within the meaning of Rule 14d-2(a) under the Exchange Act; 

 

	 	(iii)	an offer that is conditioned on a minimum of at least a majority of the outstanding shares of the Common Stock being tendered and not withdrawn as of the offer’s
expiration date, which condition shall not be waivable; 

  

	 	(iv)	an offer pursuant to which the Person making such offer has announced that it intends, as promptly as practicable upon successful completion of the offer, to consummate
a second step transaction whereby all shares of the Common Stock not tendered into the offer will be acquired at the same form and amount of consideration per share actually paid pursuant to the offer, subject to stockholders’ statutory
appraisal rights, if any. 

  

 5 

 “Section 382” means Section 382 of the Code, or any comparable
successor provision. 
 “Securities Act” means the Securities Act of 1933, as amended, unless otherwise
expressly specified. 
 “Stock Acquisition Date” means the date of the first public announcement (including the
filing of a report on Schedule 13D or Schedule 13G under the Exchange Act (or any similar or successor report)) by the Company or an Acquiring Person indicating that an Acquiring Person has become such. 

“Straight Preferred Stock” means preferred stock that is not treated as stock pursuant to Treasury Regulation
Section 1.382-2(a)(3). 
 “Subsidiary” of any Person means any other Person of which securities or other
ownership interests having ordinary voting power, in the absence of contingencies, to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such first Person.

 “Tax Benefits” means the net operating loss carryovers, capital loss carryovers, general business credit
carryovers, alternative minimum tax credit carryovers and foreign tax credit carryovers, as well as any loss or deduction attributable to a “net unrealized built-in loss” within the meaning of Section 382, of the Company or any of its
Subsidiaries. 
 “Trading Day” means a day on which the principal national securities exchange or
over-the-counter market on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange or
over-the-counter market, a Business Day. 
 “Treasury Regulation” means any final, proposed or temporary
regulation of the Department of Treasury under the Code and any successor regulation. 
 Each of the following terms is defined
in the Section set forth opposite such term: 
  

					
	 Term
	 	 	  	 Section

	Company	 		  	Preamble
	Exchange Ratio	 		  	20
	Ownership Statement	 		  	3(a)
	Plan	 		  	Preamble
	Record Date	 		  	Recitals
	Redemption Price	 		  	19

  

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	Right	 		  	Recitals
	Rights Agent	 		  	Preamble
	Right Certificate	 		  	4
	Trust	 		  	20
	Trust Agreement	 		  	20

 Section 2.
Other Definitional and Interpretative Provisions. The words “hereof”, “herein” and “hereunder” and words of like import used in this Plan shall refer to this Plan as a whole and not to any particular provision of
this Plan. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Sections and Exhibits are to Sections and Exhibits of this Plan unless otherwise
specified. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Plan as if set forth in full herein. Any capitalized terms used in any Exhibit but not otherwise defined therein, shall have the meaning
as defined in this Plan. Any singular term in this Plan shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Plan, they shall
be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other
means of reproducing words (including electronic media) in a visible form. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and
thereof; provided that with respect to any agreement or contract listed on any schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate schedule. References to any Person include the
successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to any statute, rules or regulations shall be deemed to
refer to such statute, rules or regulations as amended from time to time and to any successors thereto. 
 Section 3.
Issuance of Rights and Right Certificates. (a) As soon as practicable after the Record Date, the Company will send a summary of the Rights substantially in the form of Exhibit B hereto, by first class mail, postage prepaid, to each
record holder of the Common Stock as of the close of business on the Record Date. Certificates for the Common Stock, or current ownership statements issued with respect to uncertificated shares of Common Stock in lieu of such a certificate (an
“Ownership Statement”) (which Ownership Statements shall be deemed to be Right Certificates), issued after the Record Date but prior to the earlier of a Distribution Date and the Expiration Date shall have printed or written on or
otherwise affixed to them the following legend: 
 This [certificate] [statement] also evidences certain Rights as set forth in a
Tax Benefits Preservation Plan between The PMI Group, Inc. (the “Company”) and American Stock Transfer & Trust Company, LLC, as 

 

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Rights Agent, dated as of August 12, 2010, and as amended from time to time (the “Plan”), the terms of which are hereby incorporated herein by reference and a copy of which
is on file at the principal executive offices of the Company. The Company will mail to the holder of this [certificate] [statement] a copy of the Plan without charge promptly after receipt of a written request therefor. Under certain circumstances,
as set forth in the Plan, such Rights may be evidenced by separate [certificate] [statements] instead of by this [certificate] [statement] and may be redeemed or exchanged or may expire. 

As set forth in the Plan, Rights issued or transferred to, or Beneficially Owned by, any Person who is, was or becomes an Acquiring
Person (as such terms are defined in the Plan), whether currently Beneficially Owned by or on behalf of such Person or by any subsequent holder, may be null and void. 

(b) Prior to a Distribution Date, (i) the Rights will be evidenced by certificates for the Common Stock or Ownership Statements and
not by separate Right Certificates (as hereinafter defined) and the registered holders of the Common Stock shall be deemed to be the registered holders of the associated Rights, and (ii) the Rights will be transferable only in connection with
the transfer of the underlying shares of Common Stock. 
 (c) From and after a Distribution Date, the Rights will be evidenced
solely by separate Right Certificates or Ownership Statements and will be transferable only in connection with the transfer of the Right Certificates pursuant to Section 5. As soon as practicable after the Company has notified the Rights Agent
of the occurrence of a Distribution Date, the Rights Agent will send, by first class, insured, postage prepaid mail, to each record holder of the Common Stock as of the close of business on the Distribution Date (other than any Acquiring Person),
one or more Right Certificates evidencing one Right (subject to adjustment as provided herein) for each share of Common Stock so held. If an adjustment in the number of Rights per share of Common Stock has been made pursuant to Section 9, the
Company shall, at the time of distribution of the Right Certificates, make the necessary and appropriate rounding adjustments in accordance with Section 11(a) so that Right Certificates representing only whole numbers of Rights are distributed
and cash is paid in lieu of any fractional Rights. 
 (d) Rights shall be issued in respect of all shares of Common Stock
outstanding as of the Record Date or issued (on original issuance or out of treasury) after the Record Date but prior to the earlier of a Distribution Date and the Expiration Date. In addition, in connection with the issuance or sale of shares of
Common Stock following a Distribution Date and prior to the Expiration Date, the Company (x) shall, with respect to shares of Common Stock so issued or sold (i) pursuant to the exercise of stock options or under any employee plan or
arrangement or (ii) upon the exercise, conversion or exchange of other securities issued by the Company prior to the Distribution Date, and (y) may, in any other case, if deemed appropriate by the Board, issue Right Certificates

  

 8 

 
representing the appropriate number of Rights in connection with such issuance or sale; provided that no such Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise be made in lieu of the issuance thereof. 
 Section 4. Form of Right Certificates.
(a) The certificates evidencing the Rights (and the forms of assignment, election to purchase and certificates to be printed on the reverse thereof) (the “Right Certificates”) shall be substantially in the form of Exhibit C
hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Plan, or as may be required to
comply with any applicable law, rule or regulation or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. The Right Certificates, whenever distributed, shall be dated as of
the Record Date. 
 (b) The Right Certificates shall be executed on behalf of the Company by its Chief Executive Officer, its
President, or any Vice President, either manually or by facsimile signature, and shall have affixed thereto the Company’s seal or a facsimile thereof which shall be attested by the Secretary, an Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, either manually or by facsimile signature. The Right Certificates shall be countersigned, either manually or by facsimile signature, by the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company whose manual or facsimile signature is affixed to the Right Certificates ceases to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may, nevertheless, be countersigned by the Rights Agent and issued and delivered with the same force and effect as though the Person who signed such Right Certificates had not ceased to be such officer of the Company. Any
Right Certificate may be signed on behalf of the Company by any Person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution
of this Plan any such Person was not such an officer. 
 (c) Notwithstanding any of the provisions of this Plan or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares of stock
issuable upon exercise of the Rights made in accordance with the provisions of this Plan. 
 Section 5. Registration;
Transfer and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) Following a Distribution Date, the Rights Agent shall keep or cause to be kept, at its principal office or offices designated as the
place for surrender of Right Certificates upon exercise, transfer or exchange, books for registration and transfer of the Right Certificates. Such books shall show with respect to each Right Certificate the name and address of the registered holder
thereof, the number of Rights indicated on the certificate and the certificate number. 
  

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 (b) At any time after a Distribution Date and prior to the Expiration Date, any Right
Certificate or Certificates may, upon the terms and subject to the conditions set forth in this Plan, be transferred or exchanged for another Right Certificate or Certificates evidencing a like number of Rights as the Right Certificate or
Certificates surrendered. Any registered holder desiring to transfer or exchange any Right Certificate or Certificates shall surrender such Right Certificate or Certificates (with, in the case of a transfer, the form of assignment and certificate on
the reverse side thereof duly executed) to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Right Certificate or Certificates until the registered holder of the Rights has complied with the requirements of Section 6(f). Upon satisfaction of the foregoing requirements, the Rights Agent shall,
subject to Sections 6(e), 6(f), 8(e), 11 and 20, countersign and deliver to the Person entitled thereto a Right Certificate or Certificates as so requested. The Company may require payment of a sum sufficient to cover any transfer tax or other
governmental charge that may be imposed in connection with any transfer or exchange of any Right Certificate or Certificates. 

(c) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will issue and deliver a new Right Certificate of like tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 
 Section 6. Exercise of
Rights. (a) The registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein, including Sections 6(e), 6(f) and 8(c)) in whole or in part at any time after a Distribution Date and
prior to the Expiration Date upon surrender of the Right Certificate, with the form of election to purchase and the certificate on the reverse side thereof duly executed, to the Rights Agent at the principal office or offices of the Rights Agent
designated for such purpose, together with payment (in lawful money of the United States of America by certified check or bank draft payable in immediately available or next day funds to the order of the Company) of the aggregate Purchase Price with
respect to the Rights then to be exercised and an amount equal to any applicable transfer tax or other governmental charge. 

(b) Upon satisfaction of the requirements of Section 6(a) and subject to Section 17(k), the Rights Agent shall thereupon
promptly (i)(A) requisition from any transfer agent of the Preferred Stock (or make available, if the Rights Agent is the transfer agent therefor) certificates for the total number of one one-millionths of a share of Preferred Stock to be purchased
(and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests) or (B) if the Company shall have elected 

 

 10 

 
to deposit the shares of Preferred Stock issuable upon exercise of the Rights with a depositary agent, requisition from the depositary agent depositary receipts representing interests in such
number of one one-millionths of a share of Preferred Stock to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent and the Company
will direct the depositary agent to comply with such request), (ii) requisition from the Company the amount of cash, if any, to be paid in lieu of issuance of fractional shares in accordance with Section 11 and (iii) after receipt of
such certificates or depositary receipts and cash, if any, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate (with such certificates or receipts registered in such name or names as may be
designated by such holder). If the Company is obligated to deliver Common Stock or other securities or assets pursuant to this Plan, the Company will make all arrangements necessary so that such securities and assets are available for delivery by
the Rights Agent, if and when appropriate. 
 (c) Each Person (other than the Company) in whose name any certificate for
Preferred Stock is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of such Preferred Stock represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price (and any transfer taxes or other governmental charges) was made; provided that if the date of such surrender and payment is a date upon which the transfer books of
the Company relating to the Preferred Stock are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the applicable transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a stockholder of the Company with respect to shares for which the Rights shall be exercisable,
including the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company except as provided herein. 

(d) In case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing the number of Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the registered holder of such Right Certificate, registered in such name or names as may be designated by
such holder, subject to the provisions of Section 12. 
 (e) Notwithstanding anything in this Plan to the contrary, any
Rights Beneficially Owned by (i) an Acquiring Person from and after the date on which the Acquiring Person becomes such or (ii) a transferee of Rights Beneficially Owned by an Acquiring Person who (A) becomes a transferee after the
Stock Acquisition Date with respect to such Acquiring Person or (B) becomes a transferee prior to or concurrently with the Stock Acquisition Date with respect to such Acquiring Person and receives such Rights (I) with actual knowledge that
the transferor is or was an Acquiring Person or (II) pursuant to either (x) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with

  

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whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (y) a transfer which the Board determines in good faith is part of a
plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 6(e), shall become null and void without any further action, and no holder of such Rights shall have any rights whatsoever with respect to
such Rights, whether under this Plan or otherwise. The Company shall use all reasonable efforts to insure that the provisions of this Section 6(e) are complied with, but shall have no liability to any holder of Right Certificates or other
Person as a result of its failure to make any determinations with respect to an Acquiring Person or any transferee of an Acquiring Person hereunder. 

(f) Notwithstanding anything in this Plan to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to any purported transfer pursuant to Section 5 or exercise pursuant to this Section 6 unless the registered holder of the applicable Rights (i) shall have completed and signed the certificate contained in the form
of assignment or election to purchase, as the case may be, set forth on the reverse side of the Right Certificate surrendered for such transfer or exercise, as the case may be, (ii) shall not have indicated an affirmative response to clause 1
or 2 thereof and (iii) shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof as the Company shall reasonably request. 

Section 7. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for exercise, transfer or
exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by this Plan. The Company shall deliver to the Rights Agent for cancellation, and the Rights Agent shall cancel, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Right Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the
Company. 
 Section 8. Reservation and Availability of Capital Stock. (a) The Company covenants and agrees that
it will cause to be reserved and kept available a number of authorized but not outstanding shares of Preferred Stock sufficient to permit the exercise in full of all outstanding Rights as provided in this Plan. 

(b) So long as the Preferred Stock or other securities issuable upon the exercise of Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all securities reserved for such issuance to be listed on any such exchange upon official notice of issuance upon such exercise.

  

 12 

 (c) The Company shall (i) file, as soon as practicable following the earliest date
after a Stock Acquisition Date and determination of the consideration to be delivered by the Company upon exercise of the Rights in accordance with Section 9(a)(ii), or as soon as is required by law following a Distribution Date, as the case
may be, a registration statement under the Securities Act with respect to the securities issuable upon exercise of the Rights, (ii) cause such registration statement to become effective as soon as practicable after such filing and
(iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such
securities and (B) the Expiration Date. The Company shall also take such action as may be appropriate to ensure compliance with the securities or blue sky laws of the various states in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to exceed 90 days after the date set forth in Section 8(c)(i), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement when the suspension is no longer in effect.
Notwithstanding anything contained in this Plan to the contrary, the Rights shall not be exercisable for securities in any jurisdiction if the requisite qualification in such jurisdiction has not been obtained, such exercise is not permitted under
applicable law or a registration statement in respect of such securities has not been declared effective. 
 (d) The Company
shall take all such action as may be necessary to ensure that all one one-millionths of a share of Preferred Stock or other securities issuable upon exercise of Rights shall, at the time of delivery of the certificates for such securities (subject
to payment of the Purchase Price), be duly authorized, validly issued, fully paid and nonassessable. 
 (e) The Company shall
pay when due and payable any and all federal and state transfer taxes and other governmental charges that may be payable in respect of the issuance or delivery of the Right Certificates and of any certificates for Preferred Stock or other securities
upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax or other governmental charge that may be payable in respect of any transfer involved in the issuance or delivery of any Right Certificates or any
certificates for Preferred Stock or other securities to a Person other than the registered holder of the applicable Right Certificate. Prior to any such issuance or delivery of any Right Certificates or any certificates for Preferred Stock or other
securities, any such transfer tax or other governmental charge shall have been paid by the holder of such Right Certificate or it shall have been established to the Company’s satisfaction that no such tax or other governmental charge is due.

 Section 9. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. (a)(i) To preserve
the actual or potential economic value of the Rights, if at any time after the date hereof there shall be any change in the Common Stock or the Preferred Stock, whether by reason of stock dividends, stock splits, reverse 

 

 13 

 
stock splits, recapitalization, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other similar changes in capitalization, any
distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to holders of Common Stock or Preferred Stock, as the case may be (other than distribution of the Rights or regular quarterly cash
dividends) or otherwise, then, in each such event the Board shall make such appropriate adjustments in the number of shares of Preferred Stock (or the number and kind of other securities) issuable upon exercise of each Right (or in exchange for any
Right pursuant to Section 20), the Purchase Price and Redemption Price in effect at such time and/or the number of Rights outstanding at such time (including the number of Rights or fractional Rights associated with each share of Common Stock)
such that following such adjustment such event shall not have had the effect of reducing or limiting the benefits the holders of the Rights would have had absent such event. If an event occurs that requires an adjustment under both this
Section 9(a)(i) and Section 9(a)(ii), the adjustment provided for in this Section 9(a)(i) shall be made prior to, and in addition to, any adjustment required pursuant to Section 9(a)(ii). 

(ii) If any Person becomes at any time after the public announcement of this Plan an Acquiring Person, then each holder of
a Right shall (except as otherwise provided herein, including Section 6(e)) be entitled to receive upon exercise thereof (in accordance with the provisions of Section 6) at the then current Purchase Price such number of one-millionths of a
share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this Plan and in lieu of shares of Preferred Stock, such number of shares of Common Stock equal to the result obtained by dividing 

(x) the product obtained by multiplying the then current Purchase Price by the number of one-millionths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such first occurrence (such product being from such time on the “Purchase Price” for each Right and for all purposes of this Plan) by 

(y) 50% of the current market price per share of Common Stock (determined pursuant to Section 9(b)(i)) on the date
of such first occurrence. 
 (iii) In the event that there shall not be sufficient shares of Common Stock issued
but not outstanding or authorized but unissued to permit the exercise in full of the Rights as contemplated in accordance with subparagraph (ii) above, the Company shall take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exercise of the Rights. In the event the Company shall, after good faith effort, be unable to take such action as may be necessary 

 

 14 

 
to authorize such additional shares of Common Stock, the Company shall substitute, for each share of Common Stock that would otherwise be issuable upon exercise of a Right, a number of shares of
Preferred Stock or fraction thereof such that the current market price of one share of Preferred Stock multiplied by such number or fraction is equal to the current market price of one share of Common Stock as of the date of issuance of such shares
of Preferred Stock or fraction thereof. 
 (b)(i) For purposes of computations hereunder other than computations made pursuant
to Section 12, the “current market price” per share of Common Stock on any date shall be the average of the daily closing prices per share of such Common Stock at the close of the regular session of trading for the 30 Trading Days
immediately prior to such date; and for purposes of computations made pursuant to Section 11, the “current market price” per share of Common Stock for any Trading Day shall be the closing price per share of Common Stock at the close
of the regular session of trading for such Trading Day; provided that if the current market price per share of the Common Stock is determined during a period that is in whole or in part following the announcement by the issuer of such Common
Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities exercisable for or convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination
or reclassification of such Common Stock, and prior to the ex-dividend date for such dividend or distribution or the record date for such subdivision, combination or reclassification, then, and in each such case, the “current market price”
shall be properly adjusted to take into account ex-dividend trading. The closing price for each day shall be the last sale price, regular way, at the close of the regular session of trading or, if no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system at the close of the regular session of trading with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the New York Stock Exchange, on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if
the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the- counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System or such other system then in use or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Common Stock selected by the Board (in each case prices which are not identified as having been reported late to such system). If on any such date, no market maker is making a market
in the Common Stock or the Common Stock is not publicly held or not so listed or traded, the “current market value” of such shares on such date shall be as determined in good faith by the Board (or, if at the time of such determination
there is an Acquiring Person, by a nationally recognized investment banking firm selected by the Board) which determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. 

 

 15 

 (ii) For the purpose of any computation hereunder, the “current market
price” per share of Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in Section 9(b)(i) (other than the last sentence thereof). If the current market price per share of Preferred Stock cannot
be determined in such manner, the “current market price” per share of Preferred Stock shall be conclusively deemed to be an amount equal to 1,000,000 (as such number may be appropriately adjusted for such events as stock splits, reverse
stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Plan) multiplied by the current market price per share of Common Stock (as determined pursuant to Section 9(b)(i)). For all
purposes of this Plan, the “current market price” of one one-millionth of a share of Preferred Stock shall be equal to the “current market price” of one share of Preferred Stock divided by 1,000,000. 

(iii) For the purpose of any computation hereunder, the value of any securities or assets other than Common Stock or
Preferred Stock shall be the fair value as determined in good faith by the Board, or, if at the time of such determination there is an Acquiring Person, by a nationally recognized investment banking firm selected by the Board, which determination
shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. 
 (c) Notwithstanding
any provision of this Plan to the contrary, no adjustment of any item described in Section 9(a)(i) (e.g., the Purchase Price, the Redemption Price, the number of shares of Preferred Stock issuable upon exercise of the Rights) shall be
required unless such adjustment would require an increase or decrease of at least 1% in the relevant item; provided that any adjustments which by reason of this Section 9(c) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section 9 shall be made to the nearest cent or to the nearest ten-thousandth of a share of Common Stock or other share or one ten-billionth of a share of Preferred Stock, as
the case may be. 
 (d) All Rights originally issued by the Company subsequent to any adjustment made hereunder shall evidence
the right to purchase, at the Purchase Price then in effect, the then applicable number of one-millionths of a share of Preferred Stock and other capital stock issuable from time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein. 
 (e) Irrespective of any adjustment or change in the Purchase Price or the number of
one-millionths of a share of Preferred Stock or other securities issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price per one one-millionth of a share and the
number of shares which were expressed in the initial Right Certificates issued hereunder. 
  

 16 

 (f) In any case in which this Section 9 shall require that an adjustment in the
Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of one-millionths of a
share of Preferred Stock or other capital stock, if any, issuable upon such exercise over and above the number of one-millionths of a share of Preferred Stock or other capital stock, if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event
requiring such adjustment. 
 (g) Anything in this Section 9 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 9, as and to the extent that it, in its sole discretion, determines to be advisable so that any consolidation or subdivision of
the Preferred Stock or Common Stock, issuance wholly for cash of any Preferred Stock or Common Stock at less than the current market price, issuance wholly for cash of any Preferred Stock, Common Stock or securities which by their terms are
convertible into or exercisable for Preferred Stock or Common Stock, stock dividends or issuance of rights, options or warrants referred to in this Section 9 hereafter made by the Company to the holders of its Preferred Stock or Common Stock
shall not be taxable to such stockholders. 
 (h) The Company agrees that after a Distribution Date, it will not, except as
permitted by Sections 19, 20 or 23, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights. 
 Section 10. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 9, the Company shall (i) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (ii) promptly file with the Rights
Agent and with each transfer agent for the Preferred Stock and the Common Stock a copy of such certificate and (iii) mail a brief summary thereof to each holder of a Right Certificate (or, if prior to a Distribution Date, to each holder of a
certificate representing shares of Common Stock) in the manner set forth in Section 22. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained. 

Section 11. Fractional Rights and Fractional Shares. (a) The Company is not required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of any such fractional Rights, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable
an amount in cash equal to the same fraction of the current market price of a whole Right. For purposes of this Section 11(a), the current market price of a whole Right shall be the closing price of a Right at the close of the regular session
of trading for the Trading Day immediately prior to the date on which 
  

 17 

 
such fractional Rights would otherwise have been issuable. The closing price of a Right for any day shall be determined in the manner set forth for the Common Stock in Section 9(b)(i).

 (b) The Company is not required to issue fractions of shares of Preferred Stock (other than fractions which are multiples of
one one-millionth of a share of Preferred Stock) upon exercise of the Rights or upon exchange of the Rights pursuant to Section 20(a), and the Company is not required to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are multiples of one one-millionth of a share of Preferred Stock). Fractions of shares of Preferred Stock in integral multiples of one one-millionth of a share of Preferred Stock may, at the election of the Company,
be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it; provided that such agreement shall provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of the Preferred Stock represented by such depositary receipts. In lieu of any such fractional shares of Preferred Stock, the Company shall pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market price of one one-millionth of a share of Preferred Stock. For purposes of this Section 11(b), the
current market price of one one-millionth of a share of Preferred Stock shall be one one-millionth of the closing price of a share of Preferred Stock (as determined pursuant to Section 9(b)) for the Trading Day immediately prior to the date of
such exercise. 
 (c) Upon any exchange pursuant to Section 20(c), the Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute certificates which evidence fractional shares of Common Stock. In lieu of fractional shares of Common Stock, the Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised or exchanged as herein provided an amount in cash equal to the same fraction of the current market price of a share of Common Stock. For purposes of this Section 11(c), the current market price of a share of
Common Stock shall be the closing price of a share of Common Stock (as determined pursuant to Section 9(b)) for the Trading Day immediately prior to the date of such exercise or exchange. 

(d) Each holder of a Right, by his acceptance of the Right, expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right except as permitted by this Section 11. 
 Section 12. Rights of Action. All
rights of action in respect of this Plan, excepting the rights of action given to the Rights Agent under Section 15 hereof, are vested in the respective registered holders of the Right Certificates (and, before the Distribution Date, the
registered holders of the Common Stock); and any registered holder of any Right Certificate (or, before the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, before
the Distribution Date, of the Common Stock), on such holder’s own behalf 
  

 18 

 
and for such holder’s own benefit, may enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such
holder’s right to exercise the Rights evidenced by such Right Certificate (or, before the Distribution Date, such Common Stock) in the manner provided in such Rights Certificate and in this Plan. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Plan and will be entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations of any Person subject to this Plan 
 Section 13.
Agreement of Right Holders. Each holder of a Right, by his acceptance of the Right, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: 

(a) prior to a Distribution Date, the Rights will be evidenced by and transferable only in connection with the transfer of Common Stock;

 (b) after a Distribution Date, the Rights will be evidenced by Right Certificates and transferable only on the registry books
of the Rights Agent pursuant to Section 5; 
 (c) subject to Sections 5 and 6, the Company and the Rights Agent may deem
and treat the Person in whose name a Right Certificate (or, prior to a Distribution Date, a certificate representing shares of Common Stock or an Ownership Statement) is registered as the absolute owner of such certificate and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificate or the certificate representing shares of Common Stock or Ownership Statement made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject to the last sentence of Section 6(e), shall be affected by any notice to the contrary; and 

(d) notwithstanding anything in this Plan to the contrary, neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform any of its obligations under this Plan by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority prohibiting or otherwise restraining performance of such obligation;
provided that the Company must use its reasonable best efforts to have any such order, decree or ruling lifted or otherwise overturned as soon as possible. 

Section 14. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the shares of capital stock which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any 
  

 19 

 
Right Certificate, as such, any of the rights of a stockholder of the Company (including any right to vote for the election of directors or upon any matter submitted to stockholders at any
meeting thereof, to give or withhold consent to any corporate action, to receive notice of meetings or other actions affecting stockholders (except as provided in Section 21), or to receive dividends or subscription rights, or otherwise) until
the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof. 

Section 15. Appointment of Rights Agent. (a) The Company hereby appoints the Rights Agent to act as agent for the
Company in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-rights agents as it may deem necessary or desirable, upon ten (10) days’
prior written notice to the Rights Agent. The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such co-rights agent. If the Company appoints one or more co-rights agents, the respective
duties of the Rights Agent and any co-rights agents shall be as the Company shall determine. 
 (b) The Company shall pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the execution or
administration of this Plan and the exercise and performance of its duties hereunder. The Company also shall indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the administration of this Plan or the exercise or performance of its duties hereunder, including the costs and expenses of
defending against any claim of liability. 
 Section 16. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into or with which the Rights Agent or any successor Rights Agent may be merged, consolidated or combined, any corporation resulting from any merger, consolidation or combination to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate trust or stock transfer business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Plan without the execution or
filing of any paper or any further act on the part of any party hereto; provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 18. If at the time such successor Rights
Agent succeeds to the agency created by this Plan any of the Right Certificates have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right Certificates have not been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Plan. 
  

 20 

 (b) If at any time the name of the Rights Agent shall be changed and at such time any of the
Right Certificates have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and if at that time any of the Right Certificates have not been
countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or its changed name; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Plan.

 Section 17. Duties of the Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this
Plan upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound: 

(a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. 

(b) Whenever in the performance of its duties under this Plan the Rights Agent deems it necessary that any fact or matter (including the
identity of any “Acquiring Person” and the determination of “current market price”) be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chief Executive Officer, the President or any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken, suffered or omitted in good faith by it under the
provisions of this Plan in reliance upon such certificate. 
 (c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct. 
 (d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Plan or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company
only. 
 (e) The Rights Agent shall not be responsible (i) in respect of the validity of this Plan or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof), (ii) for any breach by the Company of any covenant or condition
contained in this Plan or in any Right Certificate, (iii) for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Section 6(e)) or (iv) any adjustment in the terms of the Rights (including
the manner, method or amount thereof) provided herein or the ascertaining of the existence of facts that would 
  

 21 

 
require any such adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after actual notice of any such adjustment). The Rights Agent shall not by any act
hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Preferred Stock or other securities to be issued pursuant to this Plan or any Right Certificate or as to whether any shares of
Preferred Stock or other securities will, when issued, be duly authorized, validly issued, fully paid and nonassessable. 
 (f)
The Company agrees that it will perform, execute, acknowledge and deliver, or cause to be performed, executed, acknowledged and delivered, all such acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Plan. 
 (g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties hereunder from the Chief Executive Officer, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company, and
to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken, suffered or omitted to be taken by it in good faith in accordance with instructions of any such officer. 

(h) The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not the Rights Agent
under this Plan. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person. 

(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company or to any holders of Rights resulting
from any such act, default, neglect or misconduct; provided that reasonable care was exercised in the selection and continued employment thereof. 

(j) No provision of this Plan shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured
to it. 
 (k) If, with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of election to purchase, as the cases may be, has either not been completed or indicates an 

 

 22 

 
affirmative response to clause 1 or 2 thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company.

 (l) The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with the administration of this Plan or the exercise or performance of its duties hereunder in reliance upon any Right Certificate or certificate for Common Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, instruction, direction, consent, certificate, statement or other paper or document reasonably believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons. 
 Section 18. Change of Rights Agent. The
Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Plan upon 30 days’ notice to the Company and to each transfer agent of the Common Stock and Preferred Stock. In the event the transfer agency
relationship in effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be discharged from its duties under this Agreement as of the effective date of such termination, and the
Company shall be responsible for sending any required notice. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and Preferred Stock by registered or certified mail, and, after a Distribution Date, to the holders of the Right Certificates. If the Rights Agent resigns or is removed or otherwise becomes incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company fails to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a corporation organized, in good standing and doing business under the laws of the United
States or of any state of the United States, authorized under such laws to exercise stock transfer or corporate trust powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an affiliate of a corporation described in Section 18(a). After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file 

 

 23 

 
notice thereof with the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and, subsequent to a Distribution Date, mail a notice thereof to the
registered holders of the Right Certificates. Failure to give any notice provided for in this Section 18, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be. 
 Section 19. Redemption. (a) At any time prior to a
Distribution Date, the Board may, at its option, redeem all but not less than all of the then outstanding Rights at a redemption price of $0.00001 per Right, as such amount may be appropriately adjusted pursuant to Section 9(a)(i) (such
redemption price being hereinafter referred to as the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board in its sole discretion may establish.
The Redemption Price shall be payable, at the option of the Company, in cash, shares of Common Stock, or such other form of consideration as the Board shall determine. 

(b) Immediately upon the action of the Board electing to redeem the Rights (or at such later time as the Board may establish for the
effectiveness of such redemption) and without any further action and without any notice, the right to exercise the Rights will terminate and thereafter the only right of the holders of Rights shall be to receive the Redemption Price for each Right
so held. The Company shall promptly thereafter give notice of such redemption to the Rights Agent and the holders of the Rights in the manner set forth in Section 22; provided that the failure to give, or any defect in, such notice shall not
affect the validity of such redemption. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the
Redemption Price will be made. 
 Section 20. Exchange. (a) At any time on or after a Stock Acquisition Date,
with respect to all or any part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to Section 6(e)), the Board may, at its option, exchange for each Right one share of Common Stock,
subject to adjustment pursuant to Section 9(a)(i) (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). The exchange of the Rights by the Board may be made effective at such time, on such basis and with
such conditions as the Board in its sole discretion may establish. Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange at any time after an Acquiring Person becomes the Beneficial Owner of 50% or more of the
shares of Common Stock then outstanding. 
 (b) Immediately upon the effectiveness of the action of the Board to exchange any
Rights pursuant to Section 20(a) (or at such later time as the Board may establish) and without any further action and without any notice, the right to exercise such Rights will terminate and thereafter the only right of a holder of such Rights
shall be to receive that number of fractional shares of shares of Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The 

 

 24 

 
Company shall promptly thereafter give notice of such exchange to the Rights Agent and the holders of the Rights to be exchanged in the manner set forth in Section 22; provided that
the failure to give, or any defect in, such notice shall not affect the validity of such exchange. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of Rights for shares of Common Stock will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant to Section 6(e)) held by each holder of Rights. 

(c) In lieu of exchanging all or any part of the then outstanding and exercisable Rights for shares of Common Stock in accordance with
Section 20(a), the Board may, at its option, substitute, for each share of Common Stock that would otherwise be issuable upon exchange of a Right, a number of shares of Preferred Stock or fraction thereof such that the current market price of
one share of Preferred Stock multiplied by such number or fraction is equal to the current market price of one share of Common Stock as of the date of issuance of such shares of Preferred Stock or fraction thereof. 

(d) Prior to effecting an exchange pursuant to this Section 20, the Board may direct the Company to enter into a Trust Agreement in
such form and with such terms as the Board of Directors shall then approve (the “Trust Agreement”). If the Board so directs, the Company shall enter into the Trust Agreement and shall issue to the trust created by such agreement
(the “Trust”) all of the fractional shares of Preferred Stock, or shares of Common Stock or other securities, if any, issuable pursuant to the exchange, and all Persons entitled to receive shares or other securities pursuant to the
exchange shall be entitled to receive such shares or other securities (and any dividends or distributions made thereon after the date on which such shares or other securities are deposited in the Trust) only from the Trust and solely upon compliance
with the relevant terms and provisions of the Trust Agreement. 
 Section 21. Notice of Proposed Actions and Certain
Other Matters. (a) If the Company proposes, at any time after a Distribution Date, (i) to pay any dividend payable in stock of any class or to make any other distribution (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company) to the holders of Preferred Stock, (ii) to offer to the holders of its Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class
or any other securities, rights or options, (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision or combination of outstanding shares of Preferred Stock), (iv) to effect,
or permit any of its Subsidiaries to effect, any consolidation, merger or combination with any other unaffiliated Person, or to effect any sale or other transfer, in one transaction or a series of related transactions, of assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries, taken as a whole, (v) to effect the liquidation, dissolution or winding-up of the Company or (vi) to declare or pay 

 

 25 

 
any dividend on the Common Stock payable in Common Stock or to effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of
dividends in Common Stock), then, in each such case, the Company shall give to each holder of a Right, a notice of such proposed action specifying the record date for the purposes of any such dividend, distribution or offering of rights or warrants,
or the date on which any such reclassification, consolidation, merger, combination, sale, transfer, liquidation, dissolution or winding-up is to take place and the date of participation therein by the holders of Preferred Stock or Common Stock, if
any such date is to be fixed, and such notice shall be so given in the case of any action covered by Section 21(a)(i) or 21(a)(ii) above at least 20 days prior to the record date for determining holders of the Preferred Stock entitled to
participate in such dividend, distribution or offering, and in the case of any such other action, at least 20 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of Preferred Stock,
whichever shall be earlier. The failure to give notice required by this Section or any defect therein shall not affect the legality or validity of the action taken by the Company or the vote upon any such action. 

(b)(i) The Company shall as soon as practicable after a Stock Acquisition Date give to each holder of a Right, in accordance with
Section 22, a notice of the occurrence of such event, which shall specify the event and the consequences of the event to holders of Rights under Section 9(a)(ii), and (ii) all references in Section 21 to Preferred Stock shall be
deemed thereafter to refer to Common Stock or other capital stock, as the case may be. 
 Section 22. Notices.
Except as set forth below, all notices, requests and other communications to any party hereunder and to the holder of any Right shall be in writing unless otherwise expressly specified herein. Notices or demands authorized by this Plan to be given
or made to or on the Company or (subject to Section 18) the Rights Agent shall be sufficiently given or made if sent by overnight delivery service or registered or certified mail (postage prepaid) to the addresses set forth below (or such other
address as such party specifies in writing to the other party): 
 if to the Company, to: 

The PMI Group, Inc. 

PMI Plaza 

3003 Oak Road 

Walnut Creek, California 94597 

Attention: General Counsel 

Telephone: (925) 658-7878 

Facsimile: (925) 658-6175 

if to the Rights Agent, to: 

American Stock Transfer & Trust Company, LLC 

59 Maiden Lane 
  

 26 

 Plaza Level 

New York, NY 10038 

Attention: REORGANIZATION DEPARTMENT 

Telephone: (800) 937-5449 

Facsimile: (718) 234-5001 

Except as otherwise expressly set forth in this Plan, notices or demands authorized by this Plan to be given or made by the Company or
the Rights Agent to the holder of any Right Certificate any certificate representing shares of Common Stock is sufficiently given or made if sent by first class mail (postage prepaid) to each record holder of such Certificate at the address of such
holder shown on the registry books of the Company. Notwithstanding anything in this Plan to the contrary, prior to a Distribution Date a public filing by the Company with the Securities and Exchange Commission shall constitute sufficient notice to
the holders of securities of the Company, including the Rights, for purposes of this Plan and no other notice need be given to such holders. 

Section 23. Supplements and Amendments. At any time on or prior to a Distribution Date, the Company may, and the Rights Agent
shall if the Company so directs, supplement or amend any provision of this Plan in any respect without the approval of any holders of Rights. At any time after the occurrence of a Distribution Date, the Company may, and the Rights Agent shall if the
Company so directs, supplement or amend this Plan without the approval of any holders of Rights; provided, however, that no such supplement or amendment may (a) adversely affect the interests of the holders of Rights as such
(other than an Acquiring Person), (b) cause this Plan again to become amendable other than in accordance with this sentence or (c) cause the Rights again to become redeemable. Upon the delivery of a certificate from the Chairman of the
Board, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company stating that the proposed supplement or amendment is in compliance with the terms of this Plan, the Rights
Agent shall execute such supplement or amendment; provided, however, that the Rights Agent may, but shall not be required to, execute any supplement or amendment that adversely affects its rights, duties or obligations under this Agreement.

 Section 24. Successors. All the covenants and provisions of this Plan by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 
 Section 25.
Determinations and Actions by the Board, etc. The Board shall have the exclusive power and authority to administer this Plan and to exercise all rights and powers specifically granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Plan, including the right and power to (i) interpret the provisions of this Plan and (ii) make all determinations deemed necessary or advisable for the administration of this Plan (including a
determination to redeem or exchange or not to redeem or exchange the Rights or to amend the Plan). All such actions, calculations, interpretations and determinations which are done or made by the 

 

 27 

 
Board in good faith shall be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties. 

Section 26. Benefits of This Plan. Nothing in this Plan shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to a Distribution Date, the certificates or ownership statements representing the shares of Common Stock) any legal or equitable right, remedy or claim under this Plan;
but this Plan shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to a Distribution Date, the certificates representing the shares of Common Stock).

 Section 27. Severability. If any term, provision, covenant or restriction of this Plan is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Plan shall remain in full force and effect and shall in no way be affected, impaired or
invalidated. 
 Section 28. Governing Law. This Plan, each Right and each Right Certificate issued hereunder shall
be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.

 Section 29. Counterparts. This Plan may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. 

Section 30. Descriptive Headings. Descriptive headings of the several sections of this Plan are inserted for convenience only
and shall not control or affect the meaning or construction of any of the provisions hereof. 
  

 28 

 IN WITNESS WHEREOF, the parties hereto have caused this Plan to be duly executed by their
respective authorized officers as of the day and year first above written. 
  

			
	THE PMI GROUP, INC.
		
	By:	 	 /s/ Donald P. Lofe, Jr.

	Name:	 	Donald P. Lofe, Jr.
	Title:	 	Chief Financial Officer
	
	 AMERICAN STOCK TRANSFER &

TRUST COMPANY, LLC

		
	By:	 	 /s/ David H. Brill

	Name:	 	David H. Brill
	Title:	 	

  

 29 

 EXHIBIT A 

FORM OF 

CERTIFICATE OF DESIGNATIONS 

OF 

SERIES A PARTICIPATING PREFERRED STOCK 

OF THE PMI GROUP, INC. 

The PMI Group, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”),
in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware thereof, does hereby certify: 

The board of directors of the Corporation (the “Board of Directors”) or a duly authorized committee of the Board of
Directors, in accordance with the certificate of incorporation and bylaws of the Corporation and applicable law, adopted the following resolution on August 12, 2010, creating a series of preferred stock of the Corporation from its blank check
preferred stock authority designated as “Series A Preferred Stock”. 
 RESOLVED, that pursuant to the
provisions of the certificate of incorporation and the bylaws of the Corporation and applicable law, a series of preferred stock, created from its blank check preferred stock authority, par value $0.01 per share, of the Corporation be and hereby is
created, and that the designation and number of shares of such series, and the voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, of the shares of
such series, are as follows: 
 Section 1. Designation and Number of Shares. The shares of such series shall be
designated as “Series A Participating Preferred Stock” (the “Series A Preferred Stock”), and the number of shares constituting such series shall be 14,000. Such number of shares of the Series A Preferred Stock may be
increased or decreased by resolution of the Board of Directors; provided that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares
issuable upon exercise or conversion of outstanding rights, options or other securities issued by the Corporation. 

Section 2. Dividends and Distributions. (a) Subject to the prior and superior rights of the holders of any shares of any
class or series of stock of the Corporation ranking prior and superior to the shares of Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, regular quarterly dividends payable on such dates each year as designated by the Board of Directors (each such date being referred to herein as a “Quarterly Dividend
Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of any share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the Multiplier
Number times the aggregate per share amount of all cash dividends or other distributions and the Multiplier Number times the aggregate per share amount of all non-

 
cash dividends or other distributions (other than (i) a dividend payable in shares of Common Stock, par value $0.01 per share, of the Corporation (the “Common Stock”) or
(ii) a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise)), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. As used herein, the “Multiplier Number” shall be 1,000,000; provided that if, at any time after August 12, 2010,
there shall be any change in the Common Stock, whether by reason of stock dividends, stock splits, reverse stock splits, recapitalization, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin- offs,
liquidations or other similar changes in capitalization, or any distribution or issuance of shares of its capital stock in a merger, share exchange, reclassification, or change of the outstanding shares of Common Stock, then in each such event the
Board of Directors shall adjust the Multiplier Number to the extent appropriate such that following such adjustment each share of Series A Preferred Stock shall be in the same economic position as prior to such event. 

(b) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in Section 2(a) immediately
after it declares a dividend or distribution on the Common Stock (other than as described in Sections 2(a)(i) and 2(a)(ii)). 

(c) Dividends, to the extent payable as provided in Sections 2(a) and (b), shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date immediately preceding the date of issuance of such shares of Series A Preferred Stock, unless the date of issuance of such shares is on or before the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue and be cumulative from the date of issue of such shares, or unless the date of issue is a date after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive a quarterly dividend and on or before such Quarterly Dividend Payment Date, in which case dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall not be more than 60 days prior to the date fixed for the payment thereof. 

Section 3. Voting Rights. In addition to any other voting rights required by law, the holders of shares of Series A Preferred
Stock shall have the following voting rights: 
  

 A-2 

 (a) Each share of Series A Preferred Stock shall entitle the holder thereof to a number of
votes equal to the Multiplier Number on all matters submitted to a vote of stockholders of the Corporation. 
 (b) Except as
otherwise provided herein or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock shall vote together as a single class on all matters submitted to a vote of stockholders of the Corporation. 

(c) The certificate of incorporation of the Corporation shall not be amended in any manner (whether by merger or otherwise) so as to
adversely affect the powers, preferences or special rights of the Series A Preferred Stock without the affirmative vote of the holders of a majority of the outstanding shares of Series A Preferred Stock, voting separately as a class.

 (d) Except as otherwise expressly provided herein, holders of Series A Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. 

Section 4. Certain Restrictions. (a) Whenever quarterly dividends or other dividends or distributions payable on the
Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on outstanding shares of Series A Preferred Stock shall have been paid in full,
the Corporation shall not: 
 (i) declare or pay dividends on, or make any other distributions on, any shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series A Preferred Stock; 
 (ii) declare
or pay dividends on, or make any other distributions on, any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding-up) with the Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such other parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; 

(iii) redeem, purchase or otherwise acquire for value any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding-up) to the Series A Preferred Stock; provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of stock of the Corporation ranking junior
(as to dividends and upon dissolution, liquidation or winding-up) to the Series A Preferred Stock; or 
 (iv) redeem, purchase
or otherwise acquire for value any shares of Series A Preferred Stock, or any shares of stock ranking on a parity (either as to 

 

 A-3 

 
dividends or upon liquidation, dissolution or winding-up) with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of Series A Preferred Stock and all such other parity stock upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. 

(b) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for value any shares of stock of
the Corporation unless the Corporation could, under paragraph 4(a), purchase or otherwise acquire such shares at such time and in such manner. 

Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired promptly after the acquisition thereof. All such shares shall upon their retirement become authorized but unissued shares of Preferred Stock without designation as to series and may be reissued as part of a new
series of Preferred Stock to be created by the Board of Directors as permitted by the certificate of incorporation of the Corporation or as otherwise permitted under Delaware law. 

Section 6. Liquidation, Dissolution and Winding-up. Upon any liquidation, dissolution or winding-up of the Corporation, no
distribution shall be made (a) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding-up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $1.00 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment; provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share equal to (x) the Multiplier Number times (y) the aggregate amount to be distributed per share to holders of Common Stock, or (b) to the holders of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding-up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such other parity stock in proportion to
the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding-up. 

Section 7. Consolidation, Merger, etc. If the Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash or any other property, then in any such case the shares of Series A Preferred Stock shall at the same time be similarly exchanged for
or changed into an amount per share equal to (x) the Multiplier Number times (y) the aggregate amount of stock, securities, cash or any other property, as the case may be, into which or for which each share of Common Stock is
changed or exchanged. 
  

 A-4 

 Section 8. No Redemption. The Series A Preferred Stock shall not be redeemable.

 Section 9. Rank. The Series A Preferred Stock shall rank junior to all other series of the Preferred Stock as to
the payment of dividends and the distribution of assets upon liquidation, dissolution and winding-up, unless the terms of such series shall specifically provide otherwise, and shall rank senior to the Common Stock as to such matters. 

Section 10. Fractional Shares. Series A Preferred Stock may be issued in fractions of a share which shall entitle the holder,
in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Preferred Stock. 

 

 A-5 

 IN WITNESS WHEREOF, this Certificate of Designations has been executed on behalf of the
Corporation by its Chief Financial Officer and countersigned by the Secretary this 12th day of August, 2010. 
  

			
	THE PMI GROUP, INC.
		
	By:	 	 /s/ Donald P. Lofe, Jr.

	Name:	 	Donald P. Lofe, Jr.
	Title:	 	Chief Financial Officer

  

			
	By:	 	 /s/ Andrew D. Cameron

	Name:	 	Andrew D. Cameron
	Title:	 	Secretary

  

 A-6 

 EXHIBIT B 

AS SET FORTH IN THE PLAN, RIGHTS ISSUED OR TRANSFERRED TO, OR BENEFICIALLY OWNED BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE PLAN), WHETHER CURRENTLY BENEFICIALLY OWNED BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BE NULL AND VOID. 

SUMMARY OF TERMS 

THE PMI GROUP, INC. 

TAX BENEFITS PRESERVATION PLAN 
  

			
	Purpose	  	The purpose of the Tax Benefits Preservation Plan (“Plan”) described in this summary of terms is to help preserve the value of the deferred tax assets (“Tax
Benefits”) of The PMI Group, Inc. (the “Company”) for U.S. federal income tax purposes.
		
	Form of Security	  	 The Board of Directors has declared a dividend of one preferred stock purchase right for each outstanding share of the Company’s
Common Stock, payable to holders of record as of the close of business on August 23, 2010 (each a “Right” and collectively, the “Rights”).

 

		
	Exercise	  	 Prior to a Distribution
Date1, the Rights are not exercisable.

After a Distribution Date, each Right is exercisable to purchase, for $15.00 (the “Purchase Price”), one one-millionth of a share of
Series A Participating Preferred Stock, $0.01 par value per share, of the Company (“Preferred Stock”).

		
	Flip-In	  	If any person or group (an “Acquiring Person”) becomes a “5-percent shareholder” (subject to certain exceptions described in the Plan), then on a
Distribution Date, each Right (other than Rights beneficially owned by the Acquiring Person and certain affiliated persons) will entitle the holder to purchase, for the Purchase Price, a number of shares of

 

	1
	 Distribution Date means the earlier of: 

  

	•	 	 the 10th business day after public announcement that any person or group has become an Acquiring Person; and 

 

	•	 	 the 10th business day after the date of the commencement of a tender or exchange offer by any person which would or could, if consummated, result in
such person becoming an Acquiring Person, subject to extension by the Board of Directors of the Company. 

			
		  	Common Stock of the Company equal to the quotient of (x) two times the Purchase Price divided by (y) the then current market price of the Company’s Common Stock; provided
that (i) none of the Company and certain affiliates of the Company shall be an Acquiring Person, (ii) none of certain existing “5-percent shareholders” (including certain persons who are “5-percent shareholders” following
specified exchange offers with the Company) shall be an Acquiring Person unless and until any such “5-percent shareholder” increases its percentage stock ownership in the Company by more than one-tenth of one percentage point,
(iii) none of certain other “grandfathered persons” (as described in the Plan) shall be an Acquiring Person so long as any such “grandfathered person” satisfies the applicable requirements set forth in the Plan, (iv) no
person or group who or which the Board determines, in its sole discretion, has inadvertently become a “5-percent shareholder” (or inadvertently failed to continue to qualify as a “grandfathered person”) shall be an Acquiring
Person so long as such Person promptly enters into, and delivers to the Company, an irrevocable commitment promptly to divest, and thereafter promptly divests (without exercising or retaining any power, including voting, with respect to such
securities), sufficient securities of the Company so that such person’s (or such group’s) percentage stock ownership in the Company is less than 5 percent (or, in the case of any person or group that has inadvertently failed to qualify as
a “grandfathered person,” the securities of the Company that caused such person or group to fail to qualify as a “grandfathered person”) , (v) no person or group that has become a “5-percent shareholder” shall be an
Acquiring Person if the Board in good faith determines that such person’s or group’s attainment of “5-percent shareholder” status has not jeopardized or endangered the Company’s utilization of the Tax Benefits or is
otherwise in the best interests of the Company; provided that such a person or group shall be an “Acquiring Person” if the Board makes a contrary determination in good faith, and (vi) an acquisition by a person or group of at least a
majority of the Company’s Common Stock made by that person or group as part of a “qualified offer” (as defined in the Plan) shall not result in any person or group becoming an Acquiring Person.
		
	Exchange	  	At any time after any person has become an Acquiring Person (but before any person becomes the beneficial owner of 50% or more of the Company’s Common Stock), the Board may
elect to exchange all or part of the Rights (other than the Rights beneficially owned by the Acquiring Person and certain

  

 B-2 

			
		  	affiliated persons) for one share of Common Stock (or, at the option of the Board, fractional shares of Preferred Stock with an aggregate current market price that equals the
current market price of one share of Common Stock) per Right, subject to adjustment.
		
	Redemption	  	The Board of Directors may, at its option, redeem all, but not less than all, of the then outstanding Rights at a redemption price of $0.00001 per Right at any time prior to a
Distribution Date.
		
	Expiration	  	The Rights will expire on the earliest of (i) August 11, 2011, (ii) the time at which all Rights are redeemed or exchanged, (iii) the first day of a taxable year
of the Company as to which the Board of Directors determines that no Tax Benefits may be carried forward, (iv) a date prior to a Stock Acquisition Date on which the Board of Directors determines, that the Rights and the Plan are no longer
necessary for the preservation or existence of the Tax Benefits or are no longer in the best interests of the Company and its shareholders and (v) the repeal or amendment of Section 382 or any successor statute, if the Board of Directors determines
that the Plan is no longer necessary for the preservation of Tax Benefits.
		
	Amendments	  	 At any time on or prior to a Distribution Date, the Company may, and the Rights Agent shall if the Company so directs, supplement or
amend any provision of the Plan without the approval of any holders of Rights.
  

After a Distribution Date, the Company may, and the Rights Agent shall if the Company so directs, supplement or amend the Plan without the approval of any
holders of Rights; provided, however, that no such supplement or amendment may (a) adversely affect the interests of the holders of Rights as such (other than an Acquiring Person), (b) cause the Plan again to become amendable other than in
accordance with this sentence or (c) cause the Rights again to become redeemable.

		
	Shareholder Rights	  	Rights holders, in their capacity as such, have no rights as a shareholder of the Company, including the right to vote and to receive dividends.
		
	Antidilution Provisions	  	The Plan includes antidilution provisions designed to prevent efforts to diminish the efficacy of the Rights.

 
  
  

 B-3 

 A copy of the Plan has been filed with the Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A. A copy of the Plan is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Plan, as amended from
time to time, the complete terms of which are hereby incorporated by reference. 
  

 
  

 B-4 

 EXHIBIT C 

[FORM OF RIGHT CERTIFICATE] 
 No. R -
                [Number of] Rights 
 NOT EXERCISABLE AFTER THE
EARLIER OF             , 20     AND THE DATE ON WHICH THE RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH IN THE RIGHTS PLAN.
AS SET FORTH IN THE RIGHTS PLAN, RIGHTS ISSUED TO, OR BENEFICIALLY OWNED BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS PLAN), WHETHER CURRENTLY BENEFICIALLY OWNED BY OR ON BEHALF OF SUCH PERSON OR
BY ANY SUBSEQUENT HOLDER, MAY BE NULL AND VOID. 
 RIGHT CERTIFICATE 

THE PMI GROUP, INC. 
 This Right Certificate
certifies that                                 , or registered assigns, is the
registered holder of the number of Rights set forth above, each of which entitles the holder (upon the terms and subject to the conditions set forth in the Tax Benefits Preservation Plan dated as of August 12, 2010 (the “Plan”)
between The PMI Group, Inc., a Delaware corporation (the “Company”), and American Stock Transfer & Trust Company, LLC (the “Rights Agent”)) to purchase from the Company, at any time after a Distribution
Date and prior to the Expiration Date, one-millionth of a fully paid, nonassessable share of Series A Participating Preferred Stock (the “Preferred Stock”) of the Company at a purchase price of $15.00 per one one-millionth of a
share (the “Purchase Price”), payable in lawful money of the United States of America, upon surrender of this Right Certificate, with the form of election to purchase and related certificate duly executed, and payment of the
Purchase Price at an office of the Rights Agent designated for such purpose. 
 Terms used herein and not otherwise defined herein shall have
the meanings given to them in the Plan. 
 The number of Rights evidenced by this Right Certificate (and the number and kind of shares issuable
upon exercise of each Right) and the Purchase Price set forth above are as of August 12, 2010, and may have been or in the future be adjusted as a result of the occurrence of certain events, as more fully provided in the Plan. 

If the Rights evidenced by this Right Certificate are Beneficially Owned by an Acquiring Person after an Acquiring Person has become such, such Rights
shall become null and void without any further action, and no holder hereof shall have any rights whatsoever with respect to such Rights. If the Rights evidenced by this Right Certificate are beneficially owned by (a) a transferee of Rights
Beneficially Owned by such Acquiring Person who (i) becomes a transferee after a Stock Acquisition Date or (ii) becomes a transferee prior to or concurrently with a Stock Acquisition Date and receives such Rights (A) with actual
knowledge that the transferor is or was an Acquiring Person or (B) pursuant to either (I) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with
whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (II) a transfer which is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of
these transfer 

 
restrictions, such Rights shall become null and void without any further action, and no holder hereof shall have any rights whatsoever with respect to such Rights. 

This Right Certificate is subject to all of the terms, provisions and conditions of the Plan, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Plan reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the
holders of the Right Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Plan. 

At any time after a Distribution Date and prior to the Expiration Date, any Right Certificate or Certificates may, upon the terms and subject to the
conditions set forth below in the Plan, be transferred or exchanged for another Right Certificate or Certificates evidencing a like number of Rights as the Right Certificate or Certificates surrendered. Any registered holder desiring to transfer or
exchange any Right Certificate or Certificates shall surrender such Right Certificate or Certificates (with, in the case of a transfer, the form of assignment and certificate on the reverse side thereof duly executed) to the Rights Agent at the
principal office or offices of the Rights Agent designated for such purpose. 
 Subject to the provisions of the Plan, the Board of Directors of
the Company may, at its option, 
 (a) at any time on or prior to a Distribution Date redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.00001 per Right, as may be adjusted pursuant to the Plan; or 
 (b) at any time after a Distribution Date
exchange all or part of the then outstanding Rights (which shall not include Rights that have become void pursuant to Section 6(e)) for shares of Common Stock at an exchange ratio of one share of Common Stock (or, at the option of the Board,
fractional shares of Preferred Stock with an aggregate current market price that equals the current market price of one share of Common Stock)per Right, as may be adjusted pursuant to the Plan. If the Rights shall be exchanged in part, the holder of
this Right Certificate shall be entitled to receive upon surrender hereof another Right Certificate or Certificates for the number of whole Rights not exchanged. 

The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are multiples of one one-millionth of a
share of Preferred Stock) upon the exercise of the Rights or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are multiples of one one-millionth of a share of Preferred Stock which may, at
the election of the Company, be evidenced by depositary receipts). In lieu of any such fractional shares of Preferred Stock, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised an amount in
cash equal to the same fraction of the current market price of one one-millionth of a share of Preferred Stock. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Certificates for the number of whole Rights not exercised. 
 No holder of this Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of capital stock which may at any time be issuable on the exercise hereof, nor shall anything contained in the Plan or herein be

  

 C-2 

 
construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company (including any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any corporate action, to receive notice of meetings or other actions affecting stockholders (except as provided in the Plan), to receive dividends or subscription rights, or
otherwise) until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Plan. 
 This Right
Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent. 
  

 C-3 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal by
its authorized officers. 
 Dated as of             ,
20     
  

			
	 THE PMI GROUP, INC.

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	

 [SEAL] 
  

			
	Attest:
		
	By:	 	  

	Name:	 	
	Title:	 	Secretary

 Countersigned: 

 

			
	
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

as Rights Agent

			
		
	By:	 	  

	Name:	 	
	Title:	 	

  

 C-4 

 Form of Reverse Side of Right Certificate 

FORM OF ASSIGNMENT 

(To be executed if the registered holder desires to transfer the Right Certificate.) 

FOR VALUE RECEIVED                   
                                         
                                         
                                         
                                         
                        

hereby sells, assigns and transfers unto             
                                         
                                         
                                         
                                         
       

                         
                                         
                                         
                                         
                                         
                                         
                            

(Please print name and address of transferee) 

                         
                                         
                                         
                                         
                                         
                                         
                            

this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint
                             Attorney, to transfer the within Right Certificate on the books of the
within named Company, with full power of substitution. 
 Dated:
            , 20     
  

			
		 	  

		 	Signature

 Medallion Signature Guaranteed:

                         
                                         
                                         
                                         
                                         
                                         
                            

 CERTIFICATE 

The undersigned hereby certifies by checking the appropriate boxes that: 

(1) the Rights evidenced by this Right Certificate          are
         are not Beneficially Owned by an Acquiring Person and          are          are not being assigned
by or on behalf of a Person who is or was an Acquiring Person (as such terms are defined in the Plan); and 
 (2) after due
inquiry and to the best knowledge of the undersigned, it          did          did not acquire the Rights evidenced by this Right Certificate from any
Person who is, was or became an Acquiring Person. 
 Dated:             ,
20     
  
  

			
		 	  

		 	Signature

  

 
  

The signatures to the foregoing Assignment and Certificate must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever. 

                         
                                         
                                         
                                         
                                         
                                         
                            

                         
                                         
                                         
                                         
                                         
                                         
                            

 FORM OF ELECTION TO PURCHASE 

(To be executed if the registered holder desires to exercise Rights represented by the Right Certificate.) 

To: The PMI Group, Inc. 
 The
undersigned hereby irrevocably elects to exercise                      Rights represented by this Right Certificate to purchase shares
of Preferred Stock issuable upon the exercise of the Rights (or such other securities of the Company or of any other person which may be issuable upon the exercise of the Rights) and requests that certificates for such securities be issued in the
name of and delivered to: 

Please insert social security or other identifying number         
                                         
                                         
                                         
                   

                         
                                         
                                         
                                         
                                         
                                         
                            

(Please print name and address) 

                         
                                         
                                         
                                         
                                         
                                         
                            

If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance of such
Rights shall be registered in the name of and delivered to: 

Please insert social security or other identifying number         
                                         
                                         
                                         
                   

                         
                                         
                                         
                                         
                                         
                                         
                            

(Please print name and address) 

                         
                                         
                                         
                                         
                                         
                                         
                            
  

Dated:             , 20     

 
  

			
		 	  

		 	Signature

 Medallion Signature Guaranteed:

                         
                                         
                                         
                                         
                                         
                                         
                            

 CERTIFICATE 

The undersigned hereby certifies by checking the appropriate boxes that: 

(1) the Rights evidenced by this Right Certificate          are
         are not Beneficially Owned by an Acquiring Person and          are          are not being exercised
by or on behalf of a Person who is or was an Acquiring Person (as such terms are defined in the Plan); and 
 (2) after due
inquiry and to the best knowledge of the undersigned, it          did          did not acquire the Rights evidenced by this Right Certificate from any
Person who is, was or became an Acquiring Person. 
 Dated:             ,
20     
  

			
		 	  

		 	Signature

  

                         
                                         
                                         
                                         
                                         
                                         
                            

The signature to the foregoing Election to Purchase and Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change whatsoever.Amendment Agreement No. 3 to Amended and Restated Revolving Credit Agreement

 Exhibit 10.1 

EXECUTION COPY 

AMENDMENT AGREEMENT NO. 3 

TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT 

AMENDMENT AGREEMENT NO. 3, dated as of August 11, 2010 (this “Agreement”) to the Amended and Restated
Revolving Credit Agreement, dated as of May 29, 2009, as amended as of November 9, 2009 and as of April 9, 2010 (as so amended, the “Credit Agreement”), among The PMI Group, Inc., a Delaware corporation (the
“Borrower”), the lenders referred to therein (the “Lenders”) and Bank of America, N.A., as Administrative Agent (in such capacity, together with any successor in such capacity, the “Administrative
Agent”). 
 INTRODUCTORY STATEMENTS 

All capitalized terms not otherwise defined in this Agreement are used herein as defined in the Credit Agreement. 

The Borrower has requested that the Lenders agree to amend certain provisions of the Credit Agreement as hereinafter set forth.

 Subject to the terms and conditions hereof, the Lenders signatory to this Agreement are willing to agree to such amendments,
but only upon the terms and conditions set forth herein. 
 In consideration of the mutual agreements contained herein and other
good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: 

SECTION 1. Modifications of the Credit Agreement. 

(A) Section 1.01 of the Credit Agreement is hereby amended by adding the following definitions to such section in the appropriate
alphabetical order: 
 ““Third Amendment to Restated Agreement” means Amendment Agreement No. 3, dated
as of August 11, 2010, to this Agreement.” 
 ““Third Amendment to Restated Agreement Effective
Date” has the meaning specified in Section 3 of the Third Amendment to Restated Agreement.” 
 (B) The last
sentence of the definition of “Swap Contract” that appears in Section 1.01 of the Credit Agreement is hereby amended and restated as follows: 

“For purposes of this Agreement, (i) Convertible Debt shall not be considered Swap Contracts and (ii) rights distributed to
holders of the Borrower’s Capital Stock pursuant to a “tax benefits preservation plan” shall not be considered Swap Contracts.” 

(C) Section 7.08 of the Credit Agreement is hereby amended by (i) deleting the word “and” appearing at the end of
clause (e) of such Section 7.08 and inserting “,” in lieu thereof, (ii) deleting the “.” appearing at the end of clause (f) of such Section 7.08 and inserting the word “and” in lieu thereof
and (iii) adding the following new clause at the end of such Section 7.08: 
 “(g) the Borrower may distribute to
holders of its Capital Stock rights to acquire shares of Capital Stock pursuant to a “tax benefits preservation” plan.” 

 SECTION 2. Representations and Warranties. The Borrower represents and warrants, as
of the date hereof and as of the Third Amendment to Restated Agreement Effective Date, to the Administrative Agent, the L/C Issuer and the Lenders that: 

(A) the execution, delivery and performance by the Borrower of this Agreement and the Credit Agreement as modified by this Agreement
(i) have been duly authorized by all requisite corporate action on the part of the Borrower; and (ii) will not violate (x) any provision of any statute, rule or regulation, or any Organizational Document of the Borrower, (y) any
applicable order of any court or any rule, regulation or order of any other agency of government, or (z) any indenture, agreement or other instrument to which Borrower is a party or by which the Borrower or any of its property is bound, or be
in conflict with, result in a breach of, constitute (with notice or lapse of time or both) a default under, or create any right to terminate, any such indenture, agreement, or other instrument; 

(B) upon the occurrence of the Third Amendment to Restated Agreement Effective Date, this Agreement will constitute the legal, valid and
binding obligation of the Borrower, enforceable in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally
and by general equitable principles (regardless of whether the issue of enforceability is considered in a proceeding in equity or at law); 

(C) no Default or Event of Default has occurred and is continuing under the Credit Agreement prior to giving effect to this Agreement;

 (D) after giving effect to this Agreement, all representations and warranties set forth in the Credit Agreement and the other
Loan Documents are true, correct and complete in all material respects on and as of the date hereof with the same effect as if such representations and warranties had been made on and as of the date hereof, unless such representation is as of a
specific date, in which case, as of such date; and 
 (E) the Borrower has obtained all consents and waivers from any Persons
necessary for the execution, delivery and performance of this Agreement and any other document or transaction contemplated hereby. 

SECTION 3. Effective Date. This Agreement shall not become effective until the date on which all of the following conditions
precedent shall have been satisfied, or waived in writing (such date being referred to herein as the “Third Amendment to Restated Agreement Effective Date”): 

(A) The Administrative Agent shall have received fully executed counterparts of this Agreement executed by (i) the Borrower,
(ii) the Administrative Agent and (iii) the Required Lenders. 
 (B) All reasonable and documented fees and other
charges presently due and payable to the Administrative Agent or any Lender pursuant to any Loan Document shall have been paid by the Borrower. 

(C) All reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and each Lender in connection with the
Credit Agreement, this Agreement, any other Loan Document or the transactions contemplated by any of the foregoing (including, without limitation, the reasonable fees and disbursements of Kaye Scholer LLP and any other counsel to the Administrative
Agent or any Lender) shall have been paid by the Borrower to the extent that the Borrower has received documentation of such expenses by 9:00 a.m. (California time) at least one Business Day prior to the Third Amendment to Restated Agreement
Effective Date. 
  

 2 

 (D) All representations and warranties contained in Section 2 of this Agreement
shall be true. 
 SECTION 4. CONFIRMATION AND ACKNOWLEDGEMENT OF THE OBLIGATIONS; RELEASE. THE BORROWER HEREBY
(A) CONFIRMS AND ACKNOWLEDGES TO THE ADMINISTRATIVE AGENT, THE L/C ISSUER AND THE LENDERS THAT IT IS VALIDLY AND JUSTLY INDEBTED TO THE ADMINISTRATIVE AGENT, THE L/C ISSUER AND THE LENDERS FOR THE PAYMENT OF ALL OBLIGATIONS (AS DEFINED IN THE
CREDIT AGREEMENT) WITHOUT OFFSET, DEFENSE, CAUSE OF ACTION OR COUNTERCLAIM OF ANY KIND OR NATURE WHATSOEVER AND (B) REAFFIRMS AND ADMITS THE VALIDITY AND ENFORCEABILITY OF THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS (IN EACH CASE AS
MODIFIED HEREBY). THE BORROWER, ON ITS OWN BEHALF AND ON BEHALF OF ITS SUCCESSORS AND ASSIGNS, HEREBY WAIVES, RELEASES AND DISCHARGES THE ADMINISTRATIVE AGENT, THE L/C ISSUER AND THE LENDERS AND ALL OF THE AFFILIATES OF THE ADMINISTRATIVE AGENT, THE
L/C ISSUER AND THE LENDERS, AND ALL OF THE DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, AGENTS, SUCCESSORS AND ASSIGNS OF THE ADMINISTRATIVE AGENT, THE L/C ISSUER AND THE LENDERS AND SUCH AFFILIATES, FROM ANY AND ALL CLAIMS, DEMANDS, ACTIONS OR CAUSES
OF ACTION (KNOWN AND UNKNOWN) ARISING OUT OF OR IN ANY WAY RELATING TO ANY OF THE LOAN DOCUMENTS AND ANY DOCUMENTS, AGREEMENTS, DEALINGS OR OTHER MATTERS CONNECTED WITH ANY OF THE LOAN DOCUMENTS, IN EACH CASE TO THE EXTENT ARISING (X) ON OR
PRIOR TO THE THIRD AMENDMENT TO RESTATED AGREEMENT EFFECTIVE DATE OR (Y) OUT OF, OR RELATING TO, ACTIONS, DEALINGS OR MATTERS OCCURRING ON OR PRIOR TO THE THIRD AMENDMENT TO RESTATED AGREEMENT EFFECTIVE DATE. 

SECTION 5. Costs and Expenses. The Borrower acknowledges and agrees that its payment obligations set forth in Section 10.04
of the Credit Agreement include the costs and expenses incurred by the Administrative Agent and each Lender in connection with the preparation, execution and delivery of this Agreement and any other documentation contemplated hereby (whether or not
this Agreement becomes effective or the transactions contemplated hereby are consummated and whether or not a Default or Event of Default has occurred or is continuing), including, but not limited to, (i) the reasonable fees and disbursements
of Kaye Scholer LLP, counsel to the Administrative Agent and (ii) the reasonable fees and disbursements of any other counsel to the Administrative Agent or any Lender. 

SECTION 6. Limited Modification; Ratification of Credit Agreement. 

(A) Except to the extent hereby expressly modified, the Credit Agreement remains in full force and effect and is hereby ratified and
confirmed. 
 (B) This Agreement shall be limited precisely as written and shall not be deemed (i) to be a consent granted
pursuant to, or a waiver or modification of, any other term or condition of the Credit Agreement or any of the instruments or agreements referred to therein or a waiver of any Default or Event of Default under the Credit Agreement, whether or not
known to the Administrative Agent, the L/C Issuer or the Lenders or (ii) to prejudice any right or rights which the Administrative Agent, the L/C Issuer or the Lenders may now have or have in the future under or in connection with any Loan
Document or any of the instruments or agreements referred to in a Loan Document. The Administrative Agent, L/C Issuer and the Lenders hereby expressly reserve all of the Administrative Agent’s, the L/C Issuer’s or the Lenders’ (as
applicable) respective rights and remedies under the Credit Agreement and each of the other 
  

 3 

 
Loan Documents, as well as under applicable law. No failure to exercise, delay in exercising or any singular or partial exercise, by the Administrative Agent, the L/C Issuer or any of the Lenders
of any right, power or remedy hereunder or any of the other Loan Documents shall operate as a waiver thereof or in the case of a singular or partial exercise of a right, power or remedy, preclude any other or further exercise thereof of any other
right, power or remedy, nor shall any of the Loan Documents be construed as a standstill or a forbearance by any of the Administrative Agent, the L/C Issuer or the Lenders of their rights and remedies thereunder. All remedies of the Administrative
Agent, the L/C Issuer or the Lenders are cumulative and are not exclusive of any other remedies under any other Loan Document or provided by applicable law. Except to the extent hereby modified, the Credit Agreement shall continue in full force and
effect in accordance with the provisions thereof on the date hereof and the Credit Agreement as heretofore amended or modified and as modified by this Agreement are hereby ratified and confirmed. As used in the Credit Agreement, the terms
“Credit Agreement,” “this Agreement,” “herein,” “hereafter,” “hereto,” “hereof,” and words of similar import, shall, unless the context otherwise requires, mean the Credit Agreement as
modified by this Agreement. Reference to the terms “Agreement” or “Credit Agreement” appearing in the Exhibits or Schedules to the Credit Agreement or in the other Loan Documents shall, unless the context otherwise requires, mean
the Credit Agreement, as modified by this Agreement. This Agreement shall be deemed to have been jointly drafted, and no provision of it shall be interpreted or construed for, or against, any party hereto because such party purportedly prepared or
requested such provision, any other provision, or this Agreement as a whole. 
 SECTION 7. Counterparts. This Agreement
may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and
the same instrument. Delivery of an executed signature page to this Agreement by facsimile shall be as effective as delivery of a manually executed counterpart of this Agreement. The Administrative Agent shall promptly notify the Borrower of the
occurrence of the Third Amendment to Restated Agreement Effective Date. 
 SECTION 8. Loan Document. This Agreement is a
Loan Document pursuant to the Credit Agreement and shall (unless expressly indicated herein or therein) be construed, administered, and applied, in accordance with all of the terms and provisions of the Credit Agreement. 

SECTION 9. Severability. Any provision of this Agreement which is invalid, illegal or unenforceable under the applicable law of
any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without invalidating the remaining provisions hereof, and any such invalidity, illegality or unenforceability in any
jurisdiction shall not invalidate such provision in any other jurisdiction. 
 SECTION 10. GOVERNING LAW. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WHICH ARE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK. 

SECTION 11. Successors and Assigns. The provisions of this Agreement shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns. 
 SECTION 12. Headings. The headings of this Agreement are
for the purposes of reference only and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. 
  

 4 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
as of the day and the year first above written. 
  

			
	BORROWER:
	
	THE PMI GROUP, INC.
		
	By:	 	 /s/ Donald P. Lofe, Jr.

	Name:	 	Donald P. Lofe, Jr.
	Title:	 	Executive Vice President, Chief Financial Officer and Chief Administrative Officer

			
	ADMINISTRATIVE AGENT AND LENDERS:
	
	 BANK OF AMERICA, N.A., as Administrative Agent,

Lender and L/C Issuer

		
	By:	 	 /s/ Tyler D. Levings

	Name:	 	Tyler D. Levings
	Title:	 	Senior Vice President

			
	CITIBANK, N.A.
		
	By:	 	 /s/ P.Y. den Brinker

	Name:	 	P.Y. den Brinker
	Title:	 	Vice President

			
	SUN TRUST BANK, N.A.
		
	By:	 	 /s/ Mark E. Kelley

	Name:	 	Mark Kelley
	Title:	 	Managing Director

			
	 WELLS FARGO BANK, NA, SUCCESSOR-BY-
MERGER TO WACHOVIA BANK, NATIONAL
ASSOCIATION

		
	By:	 	 /s/ Michael Thomas

	Name:	 	Michael Thomas
	Title:	 	Vice President

			
	GOLDMAN SACHS LENDING PARTNERS, LLC
		
	By:	 	 /s/ John Makrinos

	Name:	 	John Makrinos
	Title:	 	Authorized Signatory

			
	JPMORGAN CHASE BANK, N.A.
		
	By:	 	 /s/ Michael E. Murray

	Name:	 	Michael E. Murray
	Title:	 	Executive Director

			
	THE BANK OF NEW YORK MELLON
		
	By:	 	 /s/ Philip Falivene

	Name:	 	Philip Falivene
	Title:	 	Managing Director

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