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As filed with the Securities and Exchange Commission on November 5, 1998
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
THE PMI GROUP, INC.
(Exact name of issuer as specified in its charter)
Delaware 94-3199675
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
601 Montgomery Street, San Francisco, CA 94111
(Address of Principal Executive Offices)
THE PMI GROUP, INC. EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plan)
Victor J. Bacigalupi
Senior Vice President, General Counsel and Secretary
The PMI Group, Inc.
601 Montgomery Street
San Francisco, CA 94111
(Name and address of agent for service)
Telephone number, including area code, of agent for service:
(415) 788-7878
Copies to:
John E. Aguirre
Orrick, Herrington & Sutcliffe LLP
400 Sansome Street
San Francisco, CA 94111
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
Title of Amount to Proposed Proposed Amount of
securities to be registered maximum maximum fee
registered offering aggregate
price per offering
share* price*
- -------------------------------------------------------------------------------
Common Stock 200,000 shares $54.00 $10,800,000 $3,003.00
- -------------------------------------------------------------------------------
* Estimated on the basis of $54.00, the average of the high and low prices of
shares on the New York Stock Exchange on November 3, 1998.
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INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated by reference in this registration
statement: (i) the latest annual report of The PMI Group, Inc. (the "Company"),
filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"); (ii) all other reports filed by the Company
pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the
fiscal year covered by the Annual Reports referred to in clause (i) above; and
(iii) the description of the Company's Common Stock filed pursuant to the
Exchange Act, including any amendment or report filed for the purpose of
updating such description. All documents filed by the Company or the Plan after
the date of this registration statement pursuant to Sections 13(a), 13(c), 14,
and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment
(that indicates all securities offered have been sold or deregisters all
securities then remaining unsold), shall be deemed to be incorporated by
reference in this registration statement and to be a part hereof from the date
of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Inapplicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Inapplicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law, inter alia, empowers a
Delaware corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee
or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Similar indemnity is authorized for such person against expenses (including
attorneys' fees) actually and reasonably incurred in connection with the defense
or settlement of any such threatened, pending or completed action or suit if
such person acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation, and provided
further that (unless a court of competent jurisdiction otherwise provides) such
person shall not have been adjudged liable to the corporation. Any such
indemnification may be made only as authorized in each specific case upon a
determination by the stockholders or disinterested directors or, if there are no
disinterested directors, or if such disinterested directors so direct, by
independent legal counsel in a written opinion that indemnification is proper
because the indemnitee has met the applicable standard of conduct.
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Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him under Section 145. The Company
maintains policies insuring its and its subsidiaries' officers and directors
against certain liabilities for actions taken in such capacities, including
liabilities under the Securities Act of 1933.
Article V of the By-laws of the Company provides for indemnification of the
directors and officers of the Company to the fullest extent permitted by law, as
now in effect or later amended. In addition, the By-laws provide for
indemnification against expenses incurred by a director or officer to be paid by
the Company in advance of the final disposition of such action, suit or
proceeding; provided, however, that if required by the Delaware General
Corporation Law, an advancement of expenses will be made only upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it shall be ultimately determined that he is not entitled to be indemnified by
the Company. The By-laws further provide for a contractual cause of action on
the part of directors and officers of the Company with respect to
indemnification claims which have not been paid by the Company.
The Company also has provided liability insurance for each director and
officer for certain losses arising from claims or charges made against them
while acting in their capacities as directors or officers of the Company.
The Company has entered into indemnification agreements with its directors
and executive officers that require the Company to indemnify such persons
against all expenses (including attorneys' fees and amounts paid in settlement),
judgments, fines and penalties which are actually incurred in connection with
any threatened, pending or completed action, suit or other proceeding (including
an action by or in the right of the Company) to which such person is, was or is
threatened to be made a party, by reason of the fact that such person is or was
a director or officer of the Company, or is or was serving at the request of the
Company as a director, officer, employee or other agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise, to
the fullest extent permitted by applicable law and the Company's Restated
Certificate of Incorporation and By-laws. The indemnification agreements also
set forth certain procedures that will apply in the event of a claim for
indemnification thereunder.
Article Nine of the Company's Restated Certificate of Incorporation limits
to the fullest extent permitted by the Delaware General Corporation Law, as the
same exists or may have been amended, the personal liability of the Company's
directors to the Company or its stockholders for monetary damages for a breach
of their fiduciary duty as directors. Section 102(b)(7) of the Delaware General
Corporation Law currently provides that such provisions do not eliminate or
limit the liability of a director (i) for a breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law (relating
to the declaration of dividends and purchase or redemption of
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shares in violation of the Delaware General Corporation Law), or (iv) for any
transaction from which the director derived an improper personal benefit.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inapplicable.
ITEM 8. EXHIBITS
4.1 The PMI Group, Inc. Employee Stock Purchase Plan.
4.2 Restated Certificate of Incorporation of The PMI Group, Inc. (incorporated
by reference to Exhibit 3.1 to the registrant's Registration Statement on
Form S-1, Commission File No. 33-88542).
4.3 By-Laws of The PMI Group, Inc. (incorporated by reference to Exhibit 3(ii)
to the registrant's report on Form 8-K, Commission File No. 001-13664,
filed with the Commission on September 29, 1998).
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Orrick, Herrington & Sutcliffe LLP is included in Exhibit 5.1 to
this Registration Statement.
24.1 Power of Attorney of Directors (contained on the signature pages of this
Registration Statement).
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the
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registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933 each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of the
Plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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Signatures
THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco, State of California on the 30th day
of October, 1998.
THE PMI GROUP, INC.
(Registrant)
/s/ W. Roger Haughton
- -------------------------------------------------
W. Roger Haughton
Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
Principal Executive Officer:
/s/ W. Roger Haughton Chief Executive October 30, 1998
- ------------------------------ Officer
W. Roger Haughton
Principal Financial Officer:
/s/ John M. Lorenzen, Jr. Executive Vice October 30, 1998
- ------------------------------ President and Chief
John M. Lorenzen, Jr. Financial Officer
Principal Accounting Officer:
/s/ William A. Seymore Vice President October 30, 1998
- ------------------------------ and Controller
William A. Seymore
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POWER OF ATTORNEY OF DIRECTORS
KNOW BY ALL PERSONS BY THESE PRESENTS:
Each of the undersigned hereby constitutes and appoints Victor J.
Bacigalupi, Mark C. Berkowitz, Charles F. Broom, John M. Lorenzen, Jr., Claude
J. Seaman, and William A. Seymore and each of them with power to act alone, his
or her true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign a Registration Statement or
Registration Statements on Form S-8 relating to 200,000 shares of Common Stock
issuable under The PMI Group, Inc. Employee Stock Purchase Plan and any and all
amendments of such Registration Statements, including post-effective amendments,
and to file the same, together with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
such attorney-in-fact full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises
hereof, as fully to all intents and purposes as he or she might do or could do
in person, thereby ratifying and confirming all that said attorney-in-fact or
his or her substitutes may lawfully do or cause to be done by virtue hereof.
/s/ W. Roger Haughton
__________________________________ October 30, 1998
W. Roger Haughton
__________________________________ October __, 1998
Wayne E. Hedien
__________________________________ October __, 1998
Ronald H. Zech
/s/ Donald C. Clark
__________________________________ October 30, 1998
Donald C. Clark
__________________________________ October __, 1998
Kenneth T. Rosen
__________________________________ October __, 1998
Mary Lee Widener
/s/ Richard L. Thomas
__________________________________ October 30, 1998
Richard L. Thomas
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/s/ James C. Castle
__________________________________ October 30, 1998
James C. Castle
/s/ John D. Roach
__________________________________ October 30, 1998
John D. Roach
A majority of the members of the Board of Directors.
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EXHIBIT INDEX
4.1 The PMI Group, Inc. Employee Stock Purchase Plan.
4.2 Restated Certificate of Incorporation of The PMI Group, Inc. (incorporated
by reference to Exhibit 3.1 to the registrant's Registration Statement on
Form S-1, Commission File No. 33-88542).
4.3 By-Laws of The PMI Group, Inc. (incorporated by reference to Exhibit 3(ii)
to the registrant's report on Form 8-K, Commission File No. 001-13664,
filed with the Commission on September 29, 1998).
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Orrick, Herrington & Sutcliffe LLP is included in Exhibit 5.1
to this Registration Statement.
24.1 Power of Attorney of Directors (contained on the signature pages of this
Registration Statement).
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EXHIBIT 4.1
THE PMI GROUP, INC.
EMPLOYEE STOCK PURCHASE PLAN
SECTION 1
PURPOSE
The PMI Group, Inc. hereby establishes The PMI Group, Inc. Employee Stock
Purchase Plan, effective as of July 23, 1998, in order to provide eligible
employees of the Company and its participating Subsidiaries with the opportunity
to purchase Common Stock through payroll deductions. The Plan is intended to
qualify as an employee stock purchase plan under Section 423(b) of the Code.
SECTION 2
DEFINITIONS
2.1 "1934 Act" means the Securities Exchange Act of 1934, as amended.
--------
Reference to a specific Section of the 1934 Act or regulation thereunder shall
include such Section or regulation, any valid regulation promulgated under such
Section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such Section or regulation.
2.2 "Board" means the Board of Directors of the Company.
-----
2.3 "Code" means the Internal Revenue Code of 1986, as amended. Reference
----
to a specific Section of the Code or regulation thereunder shall include such
Section or regulation, any valid regulation promulgated under such Section, and
any comparable provision of any future legislation or regulation amending,
supplementing or superseding such Section or regulation.
2.4 "Committee" shall mean the committee appointed by the Board to
---------
administer the Plan. Any member of the Committee may resign at any time by
notice in writing mailed or delivered to the Secretary of the Company. As of the
effective date of the Plan, the Plan shall be administered by the Compensation
and Nominating Committee of the Board.
2.5 "Common Stock" means the common stock of the Company.
------------
2.6 "Company" means The PMI Group, Inc., a Delaware corporation.
-------
2.7 "Compensation" means a Participant's base salary or regular wages
------------
(including sick pay and vacation pay). The Committee, in its discretion, may
(on a uniform and nondiscriminatory basis) establish a different definition of
Compensation prior to an Enrollment Date for all options to be granted on such
Enrollment Date.
2.8 "Eligible Employee" means every Employee of an Employer, except (a)
-----------------
any Employee who immediately after the grant of an option under the Plan, would
own stock and/or hold outstanding options to purchase stock possessing five
percent (5%) or more of the total combined voting power or value of all classes
of stock of the Company or of any Subsidiary of the Company (including stock
attributed to such Employee pursuant to Section 424(d) of the Code), or (b) as
provided in the following sentence. The Committee, in its discretion, from time
to time may, prior to an Enrollment Date for all options to be granted on such
Enrollment Date, determine (on a uniform and nondiscriminatory basis) that an
Employee shall not be an Eligible
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Employee if he or she: (1) has not completed at least two years of service since
his or her last hire date (or such lesser period of time as may be determined by
the Committee in its discretion), (2) customarily works not more than 20 hours
per week (or such lesser period of time as may be determined by the Committee in
its discretion), (3) customarily works not more than 5 months per calendar year
(or such lesser period of time as may be determined by the Committee in its
discretion), or (4) is an officer or other manager.
2.9 "Employee" means an individual who is a common-law employee of any
--------
Employer, whether such employee is so employed at the time the Plan is adopted
or becomes so employed subsequent to the adoption of the Plan.
2.10 "Employer" or "Employers" means any one or all of the Company and
-------- ---------
those Subsidiaries which, with the consent of the Board, have adopted the Plan.
2.11 "Enrollment Date" means such dates as may be determined by the
---------------
Committee (in its discretion and on a uniform and nondiscriminatory basis) from
time to time.
2.12 "Grant Date" means any date on which a Participant is granted an
----------
option under the Plan.
2.13 "Participant" means an Eligible Employee who (a) has become a
-----------
Participant in the Plan pursuant to Section 4.1 and (b) has not ceased to be a
Participant pursuant to Section 8 or Section 9.
2.14 "Plan" means The PMI Group, Inc. Employee Stock Purchase Plan, as set
----
forth in this instrument and as hereafter amended from time to time.
2.15 "Purchase Date" means such dates as may be determined by the Committee
-------------
(in its discretion and on a uniform and nondiscriminatory basis) from time to
time prior to an Enrollment Date for all options to be granted on such
Enrollment Date.
2.16 "Subsidiary" means any corporation in an unbroken chain of
----------
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
SECTION 3
SHARES SUBJECT TO THE PLAN
3.1 Number Available. A maximum of 200,000 shares of Common Stock shall be
----------------
available for issuance pursuant to the Plan. Shares sold under the Plan may be
newly issued shares or treasury shares.
3.2 Adjustments. In the event of any reorganization, recapitalization,
-----------
stock split, reverse stock split, stock dividend, combination of shares, merger,
consolidation, offering of rights or other similar change in the capital
structure of the Company, the Board may make such adjustment, if any, as it
deems appropriate in the number, kind and purchase price of the shares available
for purchase under the Plan and in the maximum number of shares subject to any
option under the Plan.
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SECTION 4
ENROLLMENT
4.1 Participation. Each Eligible Employee may elect to become a Participant
-------------
by enrolling or re-enrolling in the Plan effective as of any Enrollment Date. In
order to enroll, an Eligible Employee must complete, sign and submit to the
Company an enrollment form in such form, manner and by such deadline as may be
specified by the Committee from time to time (in its discretion and on a
nondiscriminatory basis). Any Participant whose option expires and who has not
withdrawn from the Plan automatically will be re-enrolled in the Plan on the
Enrollment Date immediately following the Purchase Date on which his or her
option expires.
4.2 Payroll Withholding. On his or her enrollment form, each Participant
-------------------
must elect to make Plan contributions via payroll withholding from his or her
Compensation. Pursuant to such procedures as the Committee may specify from time
to time, a Participant may elect to have withholding equal to a whole percentage
from 1% to 10% (or such lesser percentage that the Committee may establish from
time to time for all options to be granted on any Enrollment Date). A
Participant may elect to increase or decrease his or her rate of payroll
withholding by submitting a new enrollment form in accordance with such
procedures as may be established by the Committee from time to time. A
Participant may stop his or her payroll withholding by submitting a new
enrollment form in accordance with such procedures as may be established by the
Committee from time to time. In order to be effective as of a specific date, an
enrollment form must be received by the Company no later than the deadline
specified by the Committee, in its discretion and on a nondiscriminatory basis,
from time to time. Any Participant who is automatically re-enrolled in the Plan
will be deemed to have elected to continue his or her contributions at the
percentage last elected by the Participant.
SECTION 5
OPTIONS TO PURCHASE COMMON STOCK
5.1 Grant of Option. On each Enrollment Date on which the Participant
---------------
enrolls or re-enrolls in the Plan, he or she shall be granted an option to
purchase shares of Common Stock.
5.2 Duration of Option. Each option granted under the Plan shall expire on
------------------
the earliest to occur of (a) the completion of the purchase of shares on the
last Purchase Date occurring within 27 months of the Grant Date of such option,
(b) such shorter option period as may be established by the Committee from time
to time prior to an Enrollment Date for all options to be granted on such
Enrollment Date, or (c) the date on which the Participant ceases to be such for
any reason. Until otherwise determined by the Committee for all options to be
granted on an Enrollment Date, the period referred to in clause (b) in the
preceding sentence shall mean the period from the applicable Enrollment Date
through the last business day prior to the immediately following Enrollment
Date.
5.3 Number of Shares Subject to Option. The number of shares available for
----------------------------------
purchase by each Participant under the option will be established by the
Committee from time to time prior to an Enrollment Date for all options to be
granted on such Enrollment Date. In addition and notwithstanding the preceding,
an option (taken together with all other options then outstanding under this
Plan and under all other similar employee stock purchase plans of the Employers)
shall not give the Participant the right to purchase shares at a rate which
accrues in excess of $10,000 of fair market value at the applicable Grant Dates
of such shares in any calendar year during which such Participant is enrolled in
the Plan at any time.
5.4 Other Terms and Conditions. Each option shall be subject to the
--------------------------
following additional terms and conditions:
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(a) payment for shares purchased under the option shall be made only
through payroll withholding under Section 4.2;
(b) purchase of shares upon exercise of the option will be accomplished
only in accordance with Section 6.1;
(c) the price per share under the option will be determined as provided in
Section 6.1; and
(d) the option in all respects shall be subject to such other terms and
conditions (applied on a uniform and nondiscriminatory basis), as the Committee
shall determine from time to time in its discretion.
SECTION 6
PURCHASE OF SHARES
6.1 Exercise of Option. Subject to Section 6.2, on each Purchase
------------------
Date, the funds then credited to each Participant's account shall be used to
purchase whole shares of Common Stock. Any cash remaining after whole shares of
Common Stock shall be used to purchase fractional shares of Common Stock. The
price per Share of the Shares purchased under any option granted under the Plan
shall be eighty-five percent (85%) of the lower of:
(a) the closing price per Share on the Grant Date for such option on the
New York Stock Exchange; or
(b) the closing price per Share on the Purchase Date on the New York Stock
Exchange.
6.2 Delivery of Shares. As directed by the Committee in its sole
------------------
discretion, shares purchased on any Purchase Date shall be delivered directly to
the Participant or to a custodian or broker (if any) designated by the Committee
to hold shares for the benefit of the Participants. As determined by the
Committee from time to time, such shares shall be delivered as physical
certificates or by means of a book entry system.
6.3 Exhaustion of Shares. If at any time the shares available under the
--------------------
Plan are over-enrolled, enrollments shall be reduced proportionately to
eliminate the over-enrollment. Such reduction method shall be "bottom up", with
the result that all option exercises for one share shall be satisfied first,
followed by all exercises for two shares, and so on, until all available shares
have been exhausted. Any funds that, due to over-enrollment, cannot be applied
to the purchase of whole shares shall be refunded to the Participants (without
interest thereon).
SECTION 7
WITHDRAWAL
7.1 Withdrawal. A Participant may withdraw from the Plan by submitting a
----------
completed enrollment form to the Company. A withdrawal will be effective only
if it is received by the Company by the deadline specified by the Committee (in
its discretion and on a uniform and nondiscriminatory basis) from time to time.
When a withdrawal becomes effective, the Participant's payroll contributions
shall cease and all amounts then credited to the Participant's account shall be
distributed to him or her (without interest thereon).
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SECTION 8
CESSATION OF PARTICIPATION
8.1 Termination of Status as Eligible Employee. A Participant shall cease
------------------------------------------
to be a Participant immediately upon the cessation of his or her status as an
Eligible Employee (for example, because of his or her termination of employment
from all Employers for any reason). As soon as practicable after such cessation,
the Participant's payroll contributions shall cease and all amounts then
credited to the Participant's account shall be distributed to him or her
(without interest thereon). If a Participant is on a Company-approved leave of
absence, his or her participation in the Plan shall continue for so long as he
or she remains an Eligible Employee and has not withdrawn from the Plan pursuant
to Section 7.1.
SECTION 9
DESIGNATION OF BENEFICIARY
9.1 Designation. Each Participant may, pursuant to such uniform and
-----------
nondiscriminatory procedures as the Committee may specify from time to time,
designate one or more Beneficiaries to receive any amounts credited to the
Participant's account at the time of his or her death. Notwithstanding any
contrary provision of this Section 9, Sections 9.1 and 9.2 shall be operative
only after (and for so long as) the Committee determines (on a uniform and
nondiscriminatory basis) to permit the designation of Beneficiaries.
9.2 Changes. A Participant may designate different Beneficiaries (or may
-------
revoke a prior Beneficiary designation) at any time by delivering a new
designation (or revocation of a prior designation) in like manner. Any
designation or revocation shall be effective only if it is received by the
Committee. However, when so received, the designation or revocation shall be
effective as of the date the designation or revocation is executed (whether or
not the Participant still is living), but without prejudice to the Committee on
account of any payment made before the change is recorded. The last effective
designation received by the Committee shall supersede all prior designations.
9.3 Failed Designations. If a Participant dies without having effectively
-------------------
designated a Beneficiary, or if no Beneficiary survives the Participant, the
Participant's Account shall be payable to his or her estate.
SECTION 10
ADMINISTRATION
10.1 Plan Administrator. The Plan shall be administered by the Committee.
------------------
The Committee shall have the authority to control and manage the operation and
administration of the Plan.
10.2 Actions by Committee. Each decision of a majority of the members of
--------------------
the Committee then in office shall constitute the final and binding act of the
Committee. The Committee may act with or without a meeting being called or held
and shall keep minutes of all meetings held and a record of all actions taken by
written consent.
10.3 Powers of Committee. The Committee shall have all powers and
-------------------
discretion necessary or appropriate to supervise the administration of the Plan
and to control its operation in accordance with its terms, including, but not by
way of limitation, the following discretionary powers:
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(a) To interpret and determine the meaning and validity of the provisions
of the Plan and the options and to determine any question arising under, or in
connection with, the administration, operation or validity of the Plan or the
options;
(b) To determine any and all considerations affecting the eligibility of
any employee to become a Participant or to remain a Participant in the Plan;
(c) To cause an account or accounts to be maintained for each Participant;
(d) To determine the time or times when, and the number of shares for
which, options shall be granted;
(e) To establish and revise an accounting method or formula for the Plan;
(f) To designate a custodian or broker to receive shares purchased under
the Plan and to determine the manner and form in which shares are to be
delivered to the designated custodian or broker;
(g) To determine the status and rights of Participants and their
Beneficiaries or estates;
(h) To employ such brokers, counsel, agents and advisers, and to obtain
such broker, legal, clerical and other services, as it may deem necessary or
appropriate in carrying out the provisions of the Plan;
(i) To establish, from time to time, rules for the performance of its
powers and duties and for the administration of the Plan;
(j) To adopt such procedures and subplans as are necessary or appropriate
to permit participation in the Plan by employees who are foreign nationals or
employed outside of the United States; and
(k) To delegate to any one or more of its members or to any other person,
severally or jointly, the authority to perform for and on behalf of the
Committee one or more of the functions of the Committee under the Plan.
10.4 Decisions of Committee. All actions, interpretations, and
----------------------
decisions of the Committee shall be conclusive and binding on all persons, and
shall be given the maximum possible deference allowed by law.
10.5 Administrative Expenses. All expenses incurred in the administration
-----------------------
of the Plan by the Committee, or otherwise, including legal fees and expenses,
shall be paid and borne by the Employers, except any stamp duties or transfer
taxes applicable to the purchase of shares may be charged to the account of each
Participant. Any brokerage fees for the purchase of shares by a Participant
shall be paid by the Company, but fees and taxes (including brokerage fees) for
the transfer, sale or resale of shares by a Participant, or the issuance of
physical share certificates, shall be borne solely by the Participant.
10.6 Eligibility to Participate. No member of the Committee who is also an
--------------------------
employee of an Employer shall be excluded from participating in the Plan if
otherwise eligible, but he or she shall not be entitled, as a member of the
Committee, to act or pass upon any matters pertaining specifically to his or her
own account under the Plan.
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10.7 Indemnification. Each of the Employers shall, and hereby does,
---------------
indemnify and hold harmless the members of the Committee and the Board, from and
against any and all losses, claims, damages or liabilities (including attorneys'
fees and amounts paid, with the approval of the Board, in settlement of any
claim) arising out of or resulting from the implementation of a duty, act or
decision with respect to the Plan, so long as such duty, act or decision does
not involve gross negligence or willful misconduct on the part of any such
individual.
SECTION 11
AMENDMENT, TERMINATION, AND DURATION
11.1 Amendment, Suspension, or Termination. The Board, in its sole
--------------------------------------
discretion, may amend or terminate the Plan, or any part thereof, at any time
and for any reason. If the Plan is terminated, the Board, in its discretion, may
elect to terminate all outstanding options either immediately or upon completion
of the purchase of shares on the next Purchase Date, or may elect to permit
options to expire in accordance with their terms (and participation to continue
through such expiration dates). If the options are terminated prior to
expiration, all amounts then credited to Participants' accounts which have not
been used to purchase shares shall be returned to the Participants (without
interest thereon) as soon as administratively practicable.
11.2 Duration of the Plan. The Plan shall commence on the date specified
--------------------
herein, and subject to Section 11.1 (regarding the Board's right to amend or
terminate the Plan), shall remain in effect thereafter.
SECTION 12
GENERAL PROVISIONS
12.1 Participation by Subsidiaries. One or more Subsidiaries of the Company
-----------------------------
may become participating Employers by adopting the Plan and obtaining approval
for such adoption from the Board. By adopting the Plan, a Subsidiary shall be
deemed to agree to all of its terms, including (but not limited to) the
provisions granting exclusive authority (a) to the Board to amend the Plan, and
(b) to the Committee to administer and interpret the Plan. An Employer may
terminate its participation in the Plan at any time. The liabilities incurred
under the Plan to the Participants employed by each Employer shall be solely the
liabilities of that Employer, and no other Employer shall be liable for benefits
accrued by a Participant during any period when he or she was not employed by
such Employer.
12.2 Inalienability. In no event may either a Participant, a former
--------------
Participant or his or her Beneficiary, spouse or estate sell, transfer,
anticipate, assign, hypothecate, or otherwise dispose of any right or interest
under the Plan; and such rights and interests shall not at any time be subject
to the claims of creditors nor be liable to attachment, execution or other legal
process. Accordingly, for example, a Participant's interest in the Plan is not
transferable pursuant to a domestic relations order.
12.3 Severability. In the event any provision of the Plan shall be held
------------
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
12.4 Requirements of Law. The granting of options and the issuance of
-------------------
shares shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or securities exchanges as the
Committee may determine are necessary or appropriate.
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<PAGE>
12.5 Compliance with Rule 16b-3. Any transactions under this Plan with
--------------------------
respect to officers (as defined in Rule 16a-1 promulgated under the 1934 Act)
are intended to comply with all applicable conditions of Rule 16b-3. To the
extent any provision of the Plan or action by the Committee fails to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee. Notwithstanding any contrary provision of the Plan,
if the Committee specifically determines that compliance with Rule 16b-3 no
longer is required, all references in the Plan to Rule 16b-3 shall be null and
void.
12.6 No Enlargement of Employment Rights. Neither the establishment or
-----------------------------------
maintenance of the Plan, the granting of options, the purchase of shares, nor
any action of any Employer or the Committee, shall be held or construed to
confer upon any individual any right to be continued as an employee of the
Employer nor, upon dismissal, any right or interest in any specific assets of
the Employers other than as provided in the Plan. Each Employer expressly
reserves the right to discharge any employee at any time, with or without cause.
12.7 Apportionment of Costs and Duties. All acts required of the Employers
---------------------------------
under the Plan may be performed by the Company for itself and its Subsidiaries,
and the costs of the Plan may be equitably apportioned by the Committee among
the Company and the other Employers. Whenever an Employer is permitted or
required under the terms of the Plan to do or perform any act, matter or thing,
it shall be done and performed by any officer or employee of the Employers who
is thereunto duly authorized by the Employers.
12.8 Construction and Applicable Law. The Plan is intended to qualify as an
-------------------------------
"employee stock purchase plan" within the meaning of Section 423(b) of the Code.
Any provision of the Plan which is inconsistent with Section 423(b) of the Code
shall, without further act or amendment by the Company or the Committee, be
reformed to comply with the requirements of Section 423(b). The provisions of
the Plan shall be construed, administered and enforced in accordance with such
Section and with the laws of the State of California (excluding California's
conflict of laws provisions).
12.9 Captions. The captions contained in and the table of contents prefixed
--------
to the Plan are inserted only as a matter of convenience, and in no way define,
limit, enlarge or describe the scope or intent of the Plan nor in any way shall
affect the construction of any provision of the Plan.
EXECUTION
IN WITNESS WHEREOF, The PMI Group, Inc., by its duly authorized
officer, has executed this Plan on the date indicated below.
THE PMI GROUP, INC.
Dated: __________, 1998 By ______________________________
Title:
17
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EXHIBIT 5.1
October 29, 1998
The PMI Group, Inc.
601 Montgomery Street
San Francisco, CA 94111
Re: Registration Statement on Form S-8/The PMI Group, Inc. Employee
Stock Purchase Plan
Ladies and Gentlemen:
At your request, we are rendering this opinion in connection with the
proposed issuance pursuant to The PMI Group, Inc. Employee Stock Savings Plan
(the "Plan"), of up to 200,000 shares of common stock, $0.01 par value ("Common
Stock"), of The PMI Group, Inc., a Delaware corporation (the "Company").
We have examined instruments, documents, and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed the following: (a) the authenticity of
original documents and the genuineness of all signatures; (b) the conformity to
the originals of all documents submitted to us as copies; and (c) the truth,
accuracy and completeness of the information, representations and warranties
contained in the records, documents, instruments and certificates we have
reviewed.
Based on such examination, we are of the opinion that the 200,000
shares of Common Stock to be issued by the Company pursuant to the Plan are
validly authorized shares of Common Stock and, when issued in accordance with
the provisions of the Plan, will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to this
Registration Statement on Form S-8 and to the use of our name wherever it
appears in said Registration Statement. In giving such consent, we do not
consider that we are "experts" within the meaning of such term as used in the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission issued thereunder, with respect to any part
of the Registration Statement, including this opinion as an exhibit or
otherwise.
Very truly yours,
/s/ Orrick, Herrington & Sutcliffe LLP
ORRICK, HERRINGTON & SUTCLIFFE LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The PMI Group, Inc. on Form S-8 of: (i) our report dated January 20, 1998
incorporated by reference in the Annual Report on Form 10-K of The PMI Group,
Inc. for the year ended December 31, 1997 and (ii) and our report dated January
20, 1998 relating to the financial statement schedules appearing in such Form
10-K.
/s/ Deloitte & Touche LLP
San Francisco, California
November 4, 1998
19
