Document:

10.11 Amendment to Employment Agmt J.Sherwood. 4.24.12

EXHIBIT 10.11

AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT (this “Amendment”) to the Employment Agreement (the “Employment Agreement”), dated as of March 6, 2012, by and between John M. Sherwood (the “Executive”) and NMI Holdings, Inc. (the “Company”) a Delaware Corporation, is made and entered into as of April 24, 2012, by and between the Executive and the Company and is effective as of the date hereof.  All capitalized terms used but not defined herein shall have the meaning assigned to them in the Employment Agreement.
WITNESSETH THAT:
WHEREAS, the Employment Agreement includes a definition of Change in Control;
WHEREAS, in connection with finalizing the Company’s By-Laws, certain elements in the definition of Change in Control in the Employment Agreement require amendment;
WHEREAS, the Company and the Executive wish to amend the definition of Change in Control to substantially conform to the definition of Change of Control set forth in the Company’s By-Laws;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, and for other good and valuable consideration, the Executive and the Company hereby agree as follows:
1.Definition of Change in Control.  The definition of Change in Control set forth in Section 6(g) of the Employment Agreement is hereby amended to read as follows:
“Change in Control” shall, for the purposes of Section 6 of this Agreement, be the first to occur following the Effective Date of:
(i)the acquisition by any individual, entity or Group, as defined in Section 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) of Beneficial Ownership (within the meaning given in Rule 13d-3 promulgated under the Exchange Act) (in a single transaction or a series of related transactions) of 35% or more (on a fully diluted basis) of either (A) the then outstanding shares of common stock of the Company, taking into account as outstanding for this purpose such common stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise or settlement of any similar right to acquire such common stock, or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Agreement, the following acquisitions shall not constitute a Change in Control: (1) any acquisition by the Company or any Affiliated Entity, (2) any acquisition directly from the Company, (3) any acquisition by any employee benefit plan sponsored or maintained by the Company or any Affiliated Entity or (4) any acquisition by any person or entity that complies with clauses (A), (B) and (C) of subsection (iv) of this Section 6(g); 

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(ii)individuals who, on the Initial Effective Date, constitute the Company’s board of directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided that any person becoming a director subsequent to the date hereof, whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination), shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director; and provided, further, that any directors elected at the Directors Election Meeting (as defined in the Company’s By-Laws) shall be considered “Incumbent Directors” for purposes of this Section 6(g)(ii); 
(iii)    approval by the stockholders of the Company of a complete dissolution or liquidation of the Company; or 
(iv)    the consummation of a merger, consolidation, statutory share exchange, a sale or other disposition of all or substantially all of the assets of the Company or similar form of corporate transaction involving the Company that requires the approval of the  Company’s stockholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), in each case, unless immediately following such Business Combination: (A) more than 50% of the total voting power of (x) the entity resulting from such Business Combination (the “Surviving Company”) or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of sufficient voting securities eligible to elect a majority of the directors of the Surviving Company (the “Parent Company”) is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which the Outstanding Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business Combination, (B) no Person (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company), is or becomes the beneficial owner, directly or indirectly, of 35% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Company (or, if there is no Parent Company, the Surviving Company) and (C) at least two-thirds of the members of the board of directors of the Parent Company (or, if there is no Parent Company, the Surviving Company) following the consummation of the Business Combination were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination. 
For the avoidance of doubt, in no event shall (w) the Capitalization of NMI, (x) the Company’s  public offering of Common Stock pursuant to a registration statement declared effective under the Securities Act, (y) any change in the composition of the Board resulting from a Special Election Meeting referred to in Section 2.2(b) of the Company’s By-Laws or from a Director Election Meeting referred to in Section 2.2(c) of the Company’s By-Laws, or (z) any transactions relating to the  dissolution or liquidation of the Company resulting from the failure to receive 

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GSE Approval, in the case of each of clause (i), (ii), (iii) or (iv), constitute or be deemed to constitute a Change in Control nor shall it be taken into account in determining whether a Change in Control occurred for purposes of this Agreement.” 
2.      Effect on the Employment Agreement.  This Amendment shall be deemed incorporated into the Employment Agreement and shall be construed and interpreted as though fully set forth therein.  Except as amended and modified herein, the Employment Agreement remains in full force and effect.
3.    Miscellaneous.  Section 12 of the Employment Agreement shall apply mutatis mutandis to this Amendment.

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IN WITNESS THEREOF, the Executive has hereunto set his hand, and the Company has caused these presents to be executed in its name and on its behalf, all as of the day and year first above written.
	
		
	

Dated:  ___April 24, 2012_____________
	NMI HOLDINGS, INC.

By:   ___/s/ Joseph Kavanagh______
Name:   Joseph Kavanagh
Title:   Director

	

Dated:  ___April 24, 2012_____________
	JOHN M. SHERWOOD

        _____/s/ John M. Sherwood_____

410.12 Employment Agmt S.Pachura 4.26.12

EXHIBIT 10.12

April 26, 2012

Stanley  Pachura
219 Nottingham   Pl. Danville, CA 94506

Dear  Stan:

We are pleased  and excited  to offer you employment   with NMI Holdings,  Inc. (the "Company") beginning  on the date that the Company  receives  cash proceeds  (or irrevocable  commitments   therefor)  of at least $500,000,000   in the aggregate  (the "Effective   Date").    You will initially serve as the Executive Vice President and Chief Information   Officer  and you will report  directly  to the Chief Executive Officer of the Company.

The term of this letter agreement  will begin  on the Effective  Date and will end on the third anniversary  of the Effective  Date,  unless  terminated  earlier pursuant  to the terms  set forth herein  (the "Employment Period").

From the Effective  Date until the date that the Company  achieves  GSE Approval  (as defined  in the Company's   2012  Stock Incentive  Plan (the "SIP")),  you will only be entitled  to (i) a monthly  base salary of $20,000,  payable  on the first business  day of each calendar  month  in arrears  and (ii) participation   in any health  and welfare  benefit  programs  adopted  and maintained  by the Company  for its employees  following  the Effective  Date.

Following  the achievement   of GSE Approval  and during the Employment   Period,  you will be entitled  to an annual  base salary of $350,000  ("Annual   Base  Salary"),   payable  at times  consistent  with the Company's   general  policies  regarding  compensation   of executives,  as in effect from time to time. You will also be eligible  to be awarded  an annual  cash bonus,  with a target  annual  bonus  opportunity  of seventy-five  percent  (75%)  of your Annual  Base  Salary ("Target   Bonus Opportunity").  Your actual annual bonus payment will be subject to your continued employment with the Company and determined by the Compensation Committee of the Company's board of directors (the "Committee").   If GSE Approval is achieved in 2012, you will be guaranteed a minimum annual bonus of fifty percent (50%) of your Annual Base Salary, prorated for the portion of the 2012 calendar year from the Effective Date through the end of the 2012 calendar year, or, in the alternative, if GSE Approval is achieved in 2013, you will be guaranteed a minimum annual bonus of fifty percent (50%) of your Annual Base Salary for all of 2013. Your annual bonus payment will be made no later than March 15th of the year following the year for which the bonus was earned.

In addition, if you continue to be employed by the Company through the date that the Company achieves GSE Approval, you will be entitled to a cash bonus payment equal to $100,000, provided that GSE Approval is achieved within nine (9) months of the Effective Date, or such later date as approved by stockholders holding at least a majority of the Company's common stock. The cash GSE Approval bonus will be paid in a lump sum on the thirtieth (30th) day immediately following the achievement of GSE Approval.

As soon as practicable after the Effective Date, you will be granted a stock option to acquire 178,000 shares of Company common stock and 14,000 restricted stock units.  The terms and conditions of any equity award granted to you, including vesting schedules, will be set forth in the applicable award

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agreement and the SIP.  In addition, during the Employment Period, you will be eligible to receive  annual equity  grants  at the discretion  of the Committee.

During  the Employment   Period,  you will also be eligible  to participate  in employee  benefit  plans generally  maintained  by the Company  in accordance  with the terms  of the applicable  plans  as in effect from time to time,  and you will be entitled  to reimbursement   for any reasonable  and documented  business expenses  incurred  in connection  with the performance   of your duties  for the Company.

If your employment  with the Company  is terminated  without  Cause  (as defined  in the SIP) or you resign your  employment  with Good Reason  (as defined  in Exhibit  A) during  the Employment   Period,  you will be entitled  to, subject to your execution  and non-revocation   of a release  of claims  in a form acceptable  to the Company  within  45 days of your termination   of employment  (the "Release Requirement"), a lump sum cash payment  on the 45th day following the date of the termination of your employment equal to the sum of (i) your then applicable Annual Base Salary through the date your employment terminates, to the extent not yet paid, (ii) any annual incentive payment earned for a prior award period, but not yet paid (other than any deferred portion of an annual incentive payment), (iii) one times the sum of your (A) Annual Base Salary in effect immediately prior to the termination of your employment, and (B) Target Bonus Opportunity in effect immediately prior to the termination of your employment and (iv) any other amounts or benefits that the Company is required to payor provide or for which you are eligible to receive under any plan, program, 'policy, practice, contract or agreement with the Company through the date of your termination of employment. If, during the Employment Period, your employment is terminated without Cause or you resign your employment with Good Reason during the one-year period immediately following a Change in Control (as defined in the SIP), you will be eligible to receive, subject to the Release Requirement, a lump sum cash payment at the same time and on the same terms as set forth in the prior sentence, but with clause (iii) revised to provide for one and a halftimes the sum of sub-clauses (A) and (B) rather than one times the sum of sub-clauses (A) and (B).

You will be subject to all policies of the Company, including, without limitation, any stock ownership guidelines and incentive compensation clawback policy or practice applicable to any other executive of the Company, as each policy is adopted or amended from time to time.  By signing this letter agreement you agree that your continued employment is contingent upon compliance with applicable regulatory, registration and licensing requirements, if any, now or in the future, required of your position. Furthermore you must keep all trade secrets of the Company, and its business plans and prospects completely confidential.

This letter agreement will be governed by, and construed under and in accordance with, the internal laws of the State of New York, without reference to rules relating to conflicts of laws. All disputes arising out of, or related to, this letter agreement, or the breach thereof, that are not resolved by you and the Company will be submitted to arbitration in the New York, New York area in accordance with New York law and the procedures of the American Arbitration Association.  The determination of the arbitrator will be conclusive and binding on you and the Company and judgment may be entered on the arbitrator(s)' award(s) in any court having competent jurisdiction.

The Company may withhold from any amounts payable to you such federal, state, local or foreign taxes as will be required to be withheld pursuant to any applicable law or regulation.  It is intended that the payments and benefits provided under this letter agreement will comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended ("Section 409A") and the regulations relating thereto, or an exemption to Section 409A, and this letter agreement will be interpreted accordingly.

From and after the Effective Date, this letter agreement will supersede any other agreement or understanding, written or oral, with respect to the matters covered herein, including, without limitation,

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the Consulting  Agreement  between  you and the Company  dated  as of March  16,2012  and any exhibits thereto.   This letter agreement  may not be amended  or modified  otherwise  than in writing  signed  by the parties  hereto; provided, however, that, notwithstanding the foregoing, the Company may amend or modify this letter agreement if it determines it is necessary to do so in order to comply with applicable legal and/or regulatory requirements or guidance, or any changes in applicable law, rules or regulations, or in the formal and conclusive interpretation thereof by any regulator or agency of competent jurisdiction.

We are confident that your experience and abilities are going to have a significant impact on the Company and our growth prospects.  We look forward to working with you in developing and growing the Company.

Please confirm acceptance of this position by signing below and returning a signed copy of this letter agreement to me. Please feel free to call if you have any questions.

Sincerely,

  /s/ Bradley M. Shuster

Bradley Shuster
Chief Executive Officer

I acknowledge receipt of this letter and I accept the position offered

Signature ______“/s/ Stanley M. Pachura”___          Date ____4/26/2012__________

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Exhibit  A

"Good Reason" means without your prior written consent:

(i) a material reduction in your Annual Base Salary (as defmed in the letter agreement);

(ii) the relocation of your primary place of employment to a location 50 or more miles from the Company's headquarters.

In order to invoke a termination for Good Reason, you must provide written notice to the Company of the existence of one or more of the conditions described in clauses (i) and (ii) within thirty (30) days following the initial existence of such condition or conditions, and the Company shall have thirty (30) days following receipt of such written notice (the "Cure Period")  during which it may remedy the condition. In the event that the Company fails to remedy the condition constituting Good Reason during the Cure Period, you must terminate employment, if at all, within 90 days following the Cure Period in order for such termination to constitute a termination for Good Reason.

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