Exhibit 10
MGIC INVESTMENT CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
1. Purpose
The purposes of this MGIC Investment Corporation Supplemental Executive
Retirement Plan (hereinafter referred to as the "Plan") are to restore
retirement benefits to certain participants in the Company's pension plan whose
benefits under said Plan are or will be limited by reason of Sections 401(a)(17)
or 415 of the Internal Revenue Code of 1986, as amended ("Code") and to provide
certain other retirement benefits.
This Plan is completely separate from the tax-qualified Pension Plan
maintained by the Company and is not funded or qualified for special tax
treatment under the Code.
2. Effective Date
The Plan is effective as of July 31, 1990.
3. Definitions
The following terms as used herein shall have the meanings set forth
below:
"Company" means MGIC Investment Corporation, a Wisconsin corporation.
"Employer" or "Employers" means the Company and any subsidiary or
affiliate thereof which is a "Participating Employer" under the Pension Plan.
"Group Annuity Contract" means Group Annuity Contract 8474-0 issued by
Metropolitan Life Insurance Company to provide for the payment of benefits
accrued under a terminated pension plan previously maintained by the Company's
predecessor.
"Participant" means an employee of the Employers who is a participant in
the Pension Plan and who is (or whose position is) designated for participation
herein by the board of directors of the Company. As of the Effective Date, the
following officers of Mortgage Guaranty Insurance Corporation are designated as
Participants:
Chief Executive Officer
Chief Operating Officer
All Executive Vice Presidents
All Senior Vice Presidents
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In addition, (i) effective January 1, 1998, any employee of the Employers not
referred to above who is in salary grade 401 through 412, inclusive, shall be in
a position designated for participation in the Plan, and (ii) after December 31,
1999, William H. Lacy, while he remains an employee of an Employer, shall
continue to be a participant in the Plan.
"Pension Plan" means the defined benefit pension plan maintained by the
Company known as the MGIC Investment Corporation Pension Plan and any successor
to such plan maintained by the Company or any successor or affiliate of the
Company.
"Pension Plan Benefits" means the monthly benefits payable under the
terms of the Pension Plan and/or under the Group Annuity Contract.
4. Administration
The Plan shall be administered by the Administrator of the Pension Plan
("Administrator"). Decisions and determinations by the Administrator shall be
final and binding on all parties, except when manifestly contrary to the
provisions of this Plan and except that no presumption of validity shall be
given to any such decision or determination with respect to Section 5(d). The
Administrator shall have the authority to interpret the Plan, to promulgate and
revise rules and regulations relating to the Plan and to make any other
determinations which it deems necessary or advisable for the administration
thereof.
5. Pension Plan Supplement
(a) Any Participant who, upon termination of employment with the
Employers after the Effective Date has a vested and nonforfeitable right to a
pension under the Pension Plan, or such Participant's spouse or other
beneficiary, shall be entitled to a benefit payable hereunder in accordance with
this Section 5, equal to the excess, if any, of
(i) the amount of such Participant's, surviving spouse's or other
beneficiary's Pension Plan Benefits computed under the provisions of the
Pension Plan and Group Annuity Contract, but without regard to the
limitations on benefits imposed by reason of Section 415 of the Code or
the limit on considered compensation under Section 401(a)(17) of the
Code; over
(ii) the amount of Pension Plan Benefits actually payable to such
Participant, surviving spouse or other beneficiary for each month under
the Pension Plan and Group Annuity Contract, as computed under the
provisions of such Plan and Contract.
The amount of Pension Plan Benefits in the computation under clauses (i)
and (ii) above shall exclude (x) any Pension Plan Benefits earned after a
Participant no longer occupies any position designated for participation in the
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Plan, and (y) in the case of any Participant who first becomes a Participant
after December 31, 1997,any Pension Plan Benefits earned before such a
Participant became a Participant.
(b) Benefits under this Section 5 shall become payable when the
Participant or the Participant's spouse or other beneficiary begins to receive
Pension Plan benefits and shall be payable in the same manner, at the same time
and in the same form as the benefits actually paid to the Participant, spouse or
other beneficiary under the Pension Plan.
(c) Notwithstanding the foregoing, no benefits shall be payable under
this Plan to or on behalf of any Participant whose employment with the Employers
is terminated "for cause" or who engages in "prohibited competition." For
purposes of this Plan, the term "for cause" shall mean fraud, dishonesty, theft,
gross negligence, willful misconduct in the performance of duties or other
similar causes. The term "prohibited competition" shall mean the rendering of
services to any competitor of the Employers (i) during the term of his
employment by the Employers and (ii) for a period of one year after any
termination of the Participant's employment in the geographic area or areas
(localized or national, as the case may be) in which he was employed, assigned
or otherwise worked on behalf of the Company, or a present or future parent,
subsidiary or affiliate of the Company, during the three years prior to the
termination of his employment. For purposes of this Plan, the term "competitor"
means any corporation, partnership, proprietorship or firm (i) engaged in the
business of mortgage guaranty in any geographic area in which the Company or a
present or future parent, subsidiary or affiliate of the Company is so engaged
or (ii) engaged in any other business in which the Company or any subsidiary is
engaged, in any geographic area in which the Company or any subsidiary is so
engaged, but only if such business accounted for at least 10% of the revenues of
the Company and its subsidiaries, on a consolidated basis, during the twelve
months preceding the month in which the Participant's employment terminated.
(d) In the case of a Participant who first becomes a Participant in 1996,
the foregoing provisions of Section 5 shall be modified to the extent provided
below:
(i) For purposes of Section 5(a), such Participant shall be deemed
to have a vested and nonforfeitable right to a pension under the Pension
Plan.
(ii) For purposes of clause (i) of Section 5(a), such Participant
(A) shall be deemed to have a Past Service Benefit under Section 5.01(a)
of the Pension Plan equal to $2,833.33 per month, and (B) shall be deemed
to have a number of years of Vesting Service under the Pension Plan
sufficient to be eligible for each benefit under the Pension Plan and a
vested percentage under the Pension Plan sufficient to avoid any
reduction in the amount of any such benefit.
(iii) Section 5(b) shall not apply and benefits under this Section
5 shall become payable when such Participant or such Participant's spouse
or other beneficiary would have received Pension Plan benefits assuming
that such Participant's deemed Vesting Service
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under clause (ii) of this Section 5(d) was such Participant's actual
Vesting Service under the Pension Plan and giving effect to any election
to commence receiving benefits filed with the Administrator as
contemplated below, except that if such an election is made under this
Plan and such Participant is also eligible to elect to commence receiving
benefits under the Pension Plan, such Participant shall also make such an
election under the Pension Plan. Benefits under this Plan shall be
payable in the same manner and in the same form as benefits would have
been payable to the Participant, spouse or other beneficiary under the
Pension Plan in accordance with the immediately preceding sentence if
such benefits were actually payable thereunder. Any election by such
Participant to commence receiving benefits or of the form of benefits
under this Plan shall be filed with the Administrator in accordance with
the same procedures as established under the Pension Plan, and in the
case of an election of the form of benefits, shall be the same as any
such election under the Pension Plan and shall be subject to the same
restrictions as under the Pension Plan.
(iv) Section 5(c) shall apply only to benefits under this Plan
which are attributable to the Annual Pension Credits of such Participant.
No benefits under this Plan which are attributable to the Past Service
Benefit referred to in clause (ii) of this Section 5(d) shall be payable
to or on behalf of such Participant if (A) prior to the third anniversary
of such Participant's first day as an employee of an Employer, such
Participant quits (as such term is used in Section 2.01 (a)(i) of the
Pension Plan) as an employee of the Employers other than as a result of a
meaningful reduction in such Participant's job status, responsibilities
or compensation, or (B) such Participant engages in "prohibited
competition," as such term is used in Section 5(c).
(v) Capitalized definitional terms used in this Section 5(d) which
are defined in the Pension Plan are used as so defined.
6. Plan Reserve
(a) The Company shall establish a bookkeeping reserve with respect to the
benefits provided under this Plan. Such reserve shall serve solely as a device
for determining the amount of the Company's accrued deferred liability for the
benefits provided herein, and shall not constitute or be treated as a trust fund
of any kind, it being expressly provided that the amounts credited to the
reserve shall be and remain the sole property of the Company, and that no
Participant shall have any proprietary rights of any nature whatsoever with
respect thereto or with respect to any investments the Company may make to aid
it in meeting its obligations hereunder.
(b) No funds or other assets of the Company shall be segregated and
attributable to the amounts that may from time to time be credited to the
reserve. Benefit
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payments under the Plan shall be made from the general assets of the Company at
the time any such payments becomes due and payable. To the extent that any
person acquires a right to receive payments from the Company hereunder, such
right shall be no greater than the right of an unsecured creditor.
7. Inter-Employer Reimbursements
Although all benefit payments hereunder shall be made by the Company, the
Administrator shall determine whether any portion thereof is allocable to any
other Employer on account of its employment of one or more Participants. In any
such case, the Company shall be reimbursed by such other Employer in the amount
and manner determined by the Administrator.
8. Non-Alienation of Payments
Benefits payable under the Plan shall not be subject in any manner to
alienation, sale, transfer, assignment, pledge, attachment, garnishment or
encumbrance of any kind, by will, or by inter vivos instrument. Any attempt to
alienate, sell, transfer, assign, pledge or otherwise encumber any such benefit
payment, whether currently or thereafter payable, shall be void and shall not be
recognized by the Administrator or the Company.
9. Limitation of Rights Against the Employers
Participation in this Plan, or any modifications thereof, or the payments
of any benefits hereunder, shall not be construed as giving to any person any
right to be retained in the service of the Employers, limiting in any way the
right of the Employers to terminate such person's employment at any time, or
evidencing any agreement or understanding that the Employers will employ such
person in any particular position or at any particular rate of compensation.
10. Applicable Laws
The Plan shall be construed, administered and governed in all respects
under and by the laws of the State of Wisconsin.
11. Liability
Neither the Company nor any shareholder, director, officer or other
employee of any Employer or any other person shall be liable for any act or
failure to act hereunder except for gross negligence or fraud.
12. Amendment or Termination
(a) The Company, by action of its board of directors, reserves the right
to amend or terminate this Plan at any time, provided that no such amendment or
modification shall adversely affect the rights of any Participant, spouse or
other beneficiary with respect to
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any benefits under this Plan which have accrued to the effective date of such
amendment, termination or modification.
(b) It is understood that an individual's entitlement to benefits under
Section 5 of this Plan may be automatically reduced as the result of an increase
in his Pension Plan Benefits. Nothing herein shall be construed in any way to
limit the right of the Company to amend or modify the Pension Plan.
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