INCORPORATED TERMS DATED AS OF APRIL 1, 2008 TO RESTRICTED STOCK AND RESTRICTED STOCK UNIT AGREEMENT
Exhibit 10.2.11
INCORPORATED TERMS
DATED AS OF APRIL 1, 2008
TO
RESTRICTED STOCK AND RESTRICTED STOCK UNIT AGREEMENT
DATED AS OF APRIL 1, 2008
TO
RESTRICTED STOCK AND RESTRICTED STOCK UNIT AGREEMENT
The following are the “Incorporated Terms” referred to in the instrument entitled “Restricted
Stock and Restricted Stock Unit Agreement” which refers to these Incorporated Terms and which has
been signed by the Company and the Director (the “Base Instrument”). The Incorporated Terms and
the Base Instrument constitute a single agreement and that agreement consists of the Base
Instrument and the Incorporated Terms. The Incorporated Terms dovetail with the Base Instrument;
because the last paragraph of the Base Instrument is Paragraph 1, the Incorporated Terms begin with
Paragraph 2.
2. Restrictions. (a) Except as otherwise provided herein, the Restricted Stock may
not be sold, transferred or otherwise alienated or hypothecated until the Restricted Stock Release
Date set forth on the signature page (such date as used herein with respect to the Restricted Stock
is referred to as the “Release Date.”) Shares of Restricted Stock may be transferred by gift
pursuant to the “Rules for Transfer of Awards Under Deposit Share Program for Directors,” which
were attached to a March 4, 2008 e-mail to the Director from Xxxxx Xxxxxxx. Any person to whom
shares of Restricted Stock are transferred pursuant to the Rules is herein referred to as a
“Permitted Transferee.”
(b) The Release Date for Deposit Share RSUs shall be the same as the Release Date for the
Restricted Stock, and the Release Date for Annual RSUs shall be the date set forth after “Annual
RSU Release Date” on the signature page. The term “Release Date” as used in the remainder of this
Agreement shall be applied separately to the Deposit Share RSUs and the Annual RSUs as if the term
“RSUs” were the term “Deposit Share RSUs” or “Annual RSUs,” as the case may be. Except as
otherwise provided herein, RSUs may not be sold, transferred or otherwise alienated or hypothecated
regardless of the occurrence of the Release Date.
3. Escrow. (a) Certificates for shares of Restricted Stock shall be issued as soon as
practicable in the name of the Director but shall be held in escrow by the Company, as escrow
agent. Upon issuance of such certificates, (i) if certificates are issued in non-electronic
registration, the Company shall give the Director a receipt for the Restricted Stock held in escrow
which will state that the Company holds such Stock in escrow for the account of the Director,
subject to the terms of this Agreement, and (ii) the Director shall give the Company a stock power
for such Stock duly endorsed in blank which will be held in escrow for use in the event such Stock
is forfeited in whole or in part. Unless forfeited as provided herein, Restricted Stock shall
cease to be held in escrow and certificates for such Stock which have not been transferred to a
Permitted Transferee shall be delivered to the Director, or in the case of his death, to his
Beneficiary (as hereinafter defined) on the Release Date or upon any other termination of the
restrictions imposed by Paragraph 2 hereof.
(b) Certificates for shares of Stock, if any, that were purchased to obtain an award of
Restricted Stock (“Purchased Shares”) shall also be held in escrow by the Company, as escrow agent.
Upon issuance of such certificates, if certificates are issued in non-electronic
registration, the Company shall give the Director a receipt for the Purchased Stock held in escrow
which will state that the Company holds such Stock in escrow for the account of the Director.
4. Transfer After Release Date; Securities Law Restrictions. Except as otherwise
provided herein, Restricted Stock shall become free of the restrictions of Paragraph 2 and be
freely transferable by the Director on the Release Date (such freeing of such restrictions is
herein referred to as “vesting”). Notwithstanding the foregoing or anything to the contrary
herein, the Director agrees and acknowledges with respect to any Restricted Stock and any Stock
delivered in settlement of RSUs that has not been registered under the Securities Act of 1933, as
amended (the “Act”), that (i) the Director will not sell or otherwise dispose of such Stock except
pursuant to an effective registration statement under the Act and any applicable state securities
laws, or in a transaction which, in the opinion of counsel for the Company, is exempt from such
registration, and (ii) a legend will be placed on the certificates for the Restricted Stock to such
effect.
5. Termination of Directorship Due to Death or a Permissible Event. If the Director
ceases to be a director of the Company by reason of the Director’s death or a “Permissible Event”
prior to the Release Date, (i) the restrictions of Paragraph 2 applicable to the Restricted Stock
shall terminate, (ii) a Release Date shall be deemed to have occurred for all RSUs and (iii) the
vesting requirements for the Restricted Stock and RSUs shall be deemed to be fulfilled on the date
of the Director’s death or the Permissible Event. A Permissible Event is termination of service as
a director of the Company by reason of (i) the Director being ineligible for continued service as a
director of the Company because of the Director’s age under the Company’s Corporate Governance
Guidelines, or (ii) the Director’s taking a position with or providing services to a governmental,
charitable or educational institution whose policies prohibit the Director’s continued service on
the Company’s Board or under circumstances in which such continued service would be a violation of
law.
6. Termination of Directorship for Other Reasons. If, prior to the Release Date, the
Director ceases to be a director of the Company for any reason other than the Director’s death or a
Permissible Event, the Restricted Stock and RSUs awarded hereunder shall be forfeited by the
Director and shall revert to the Company, unless otherwise provided by the Committee. In addition,
Restricted Stock may be forfeited as provided in Paragraph 14(g).
7. Beneficiary. (a) The person whose name appears on the signature page hereof after
the caption “Beneficiary” or any successor designated by the Director in accordance herewith (the
person who is the Director’s Beneficiary at the time of his death herein referred to as the
“Beneficiary”) shall be entitled to receive the Restricted Stock to be released to the Beneficiary
under Paragraphs 3 and 5 as a result of the death of the Director and the Stock to be delivered in
settlement of RSUs. The Director may from time to time revoke or change the Beneficiary without
the consent of any prior Beneficiary by filing a new designation with the Committee. The last such
designation received by the Committee shall be controlling; provided, however, that
no designation, or change or revocation thereof, shall be effective unless received by the
Committee prior to the Director’s death, and in no event shall any designation be effective as of a
date prior to such receipt. If no such Beneficiary designation is in effect at the time of the
Director’s death, or if no designated Beneficiary survives the Director or if such designation
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conflicts with law, the Director’s estate shall be entitled to receive the Restricted Stock upon
the death of the Director and the Stock to be delivered in settlement of RSUs.
(b) A Permitted Transferee shall be entitled to designate a Beneficiary with respect to the
shares of Restricted Stock transferred to the Permitted Transferee by completing the appropriate
portion of the election form contemplated by Paragraph 5 of the Rules (the “Election Form”). Such
Beneficiary shall be entitled to receive the vested Restricted Stock to be released under
Paragraphs 3 and 5 as a result of the death of the Director or otherwise to be released hereunder
if, in either case, the Permitted Transferee dies, prior to such release. The Permitted Transferee
may from time to time revoke or change such Beneficiary without the consent of any prior
Beneficiary by filing a new designation with the Committee. The last such designation received by
the Committee shall be controlling, provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the Committee prior to the
Director’s death, and in no event shall any designation be effective as of a date prior to such
receipt. If no such designated Beneficiary survives the Permitted Transferee, such Beneficiary’s
estate, of if such designation conflicts with law, the Permitted Transferee’s estate, shall be
entitled to receive the Restricted Stock released hereunder.
(c) If the Committee is in doubt as to the right of any person to receive Restricted Stock or
Stock delivered in settlement of RSUs, the Company may retain such Stock, without liability for any
interest thereon, until the Committee determines the person entitled thereto, or the Company may
deliver such Restricted Stock or Stock to be delivered in settlement of RSUs to any court of
appropriate jurisdiction and such delivery shall be a complete discharge of the liability of the
Company therefor.
8. Certificate Legend. In addition to any legends placed on certificates for
Restricted Stock under Paragraph 4 hereof, each certificate for shares of Restricted Stock shall
bear the following legend:
“The sale or other transfer of the shares of stock represented by this certificate,
whether voluntary, or by operation of law, is subject to certain restrictions set
forth in the MGIC Investment Company 2002 Stock Incentive Plan, as amended, and a
Restricted Stock Agreement between MGIC Investment Company and the registered owner
hereof. A copy of such Plan and such Agreement may be obtained from the Secretary
of MGIC Investment Company.”
When the restrictions imposed by Paragraph 2 hereof terminate, the foregoing legend shall be
removed from the certificates representing such Stock upon request of the Director or a Permitted
Transferee for whom the shares have been transferred.
9. Voting Rights; Dividends and Other Distributions; Rights of RSUs.
(a) While the Restricted Stock is subject to restrictions under Paragraph 2 and prior to any
forfeiture thereof, the Director may exercise full voting rights for the Restricted Stock
registered in his or her name and held in escrow hereunder.
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(b) While the Restricted Stock is subject to the restrictions under Paragraph 2 and prior to
any forfeiture thereof, the Director shall be entitled to receive all dividends and other
distributions paid with respect to the Restricted Stock. If any such dividends or distributions
are paid in Stock, such shares shall be subject to the same restrictions as the shares of
Restricted Stock with respect to which they were paid, including the requirement that Restricted
Stock be held in escrow pursuant to Paragraph 3 hereof.
(c) Subject to the provisions of this Agreement, the Director shall have, with respect to the
Restricted Stock, all other rights of holders of Stock.
(d) RSUs represent only the right to receive as Stock, on the terms provided herein, (i) in
the case of Deposit Share RSUs, equal to the number of shares indicated after “Shares of Restricted
Stock” on the signature page, and (ii) in the case of the Annual RSUs, equal to one share of Stock
for each such RSU. RSUs that have vested shall be settled by the delivery of one share of Stock
for each RSU as promptly as practicable after the Director ceases to be a Director of the Company.
The Director shall have no rights as a holder of Stock on account of RSUs, including the right to
vote or to receive dividends, until certificates for such Stock are actually delivered in
settlement of the RSU. Notwithstanding the preceding sentence, on each date on which the Company
pays a dividend in cash on the Stock, the Company shall make a payment in cash on the RSUs that are
outstanding on the record date for such dividend equal to, in the case of Deposit Share RSUs, the
dividend that would have been paid on the number of shares indicated after “Shares of Restricted
Stock” on the signature page had such shares then been outstanding, and on the Annual RSUs, equal
to the number of shares that are to be issued in settlement of the Annual RSUs had such shares then
been outstanding.
10. Adjustments in Event of Change in Stock. In the event of any change in the
outstanding shares of Stock (“capital adjustment”) for any reason, including but not limited to,
any stock splits, stock dividend, recapitalization, merger, consolidation, reorganization,
combination or exchange of shares or other similar event which, in the judgment of the Committee,
could distort the implementation of the award of Restricted Stock or the award of RSUs, the
Committee may make such adjustments in the shares of Restricted Stock subject to this Agreement or
in the property deliverable in settlement of RSUs, or in the terms, conditions or restrictions of
this Agreement as the Committee deems equitable, except that in the event of any stock split,
reverse stock split, stock dividend, combination or reclassification of the Stock that occurs after
the date of this Agreement, the number of RSUs shall be adjusted in accordance with the resolutions
adopted by the Management Development Committee on January 24, 2007.
11. Change in Control. If a “Change in Control of the Company” (as defined in the
Annex attached hereto) occurs, notwithstanding anything herein, the restrictions of Paragraph 2
applicable to the Restricted Stock not previously forfeited shall terminate on the date of the
Change in Control of the Company and a Release Date shall be deemed to have occurred for all RSUs.
The Director agrees that such Annex may be amended by the Company on one or more occasions without
the consent or approval of the Director if in the determination of the Committee such amendment is
necessary or appropriate to conform the provisions of such Annex to Treasury Regulation 1.409A-et
seq. or any position published by the IRS with respect to Section 409A of the Internal Revenue Code
of 1986. The right of the Company to make such
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an amendment does not depend on whether the Restricted Stock or RSUs are subject to such Section
but will enable the Company to have uniform provisions governing a change in control among all
agreements having such change of control provisions, including those under which compensation is
subject to such Section. Any such amendment will become effective upon notice to the Director.
The Company will seek to give the Director notice of an amendment with reasonable promptness after
the Committee has approved the amendment.
12. Powers of Company Not Affected. The existence of the Restricted Stock or RSUs
shall not affect in any way the right or power of the Company or its stockholders to make or
authorize any combination, subdivision or reclassification of the Stock or any reorganization,
merger, consolidation, business combination, exchange of shares, or other change in the Company’s
capital structure or its business, or any issue of bonds, debentures or stock having rights or
preferences equal, superior or affecting the Restricted Stock or any Stock to be issued in
settlement of RSUs or, in both cases, the rights thereof, or dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise. The determination of the
Committee as to any such adjustment shall be conclusive and binding for all purposes of this
Agreement. Nothing herein shall confer upon the Director the right to continue as a member of the
Company’s Board of Directors.
13. Interpretation by Committee. The Director agrees that any dispute or disagreement
which may arise in connection with this Agreement shall be resolved by the Committee, in its sole
discretion, and that any interpretation by the Committee of the terms of this Agreement or the Plan
and any determination made by the Committee under this Agreement or the Plan may be made in the
sole discretion of the Committee and shall be final, binding, and conclusive. Any such
determination need not be uniform and may be made differently among directors awarded Restricted
Stock and RSUs.
14. Miscellaneous.
(a) This Agreement shall be governed and construed in accordance with the laws of the State
of Wisconsin applicable to contracts made and to be performed therein between residents thereof.
(b) The waiver by the Company of any provision of this Agreement shall not operate or be
construed to be a subsequent waiver of the same provision or waiver of any other provision hereof.
(c) The Restricted Stock and RSUs shall be deemed to have been awarded pursuant to the Plan
and are subject to the terms and conditions thereof. In the event of any conflict between the
terms hereof and the provisions of the Plan, the terms and conditions of the Plan shall prevail.
Any and all terms used herein, unless specifically defined herein shall have the meaning ascribed
to them in the Plan.
(d) Any notice, filing or delivery hereunder or with respect to Restricted Stock or RSUs
shall be given to the Director at either his or her address as indicated in the records of the
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Company to which communications are generally sent to him or her; shall be given to a Permitted
Transferee at his address as indicated in the Election Form; and shall be given to the Committee or
the Company at 000 Xxxx Xxxxxxxx Avenue, Milwaukee 53202, Attention: Secretary. All such notices
shall be given by first class mail, postage pre-paid, or by personal delivery.
(e) This Agreement shall be binding upon and inure to the benefit of the Company and its
successors and assigns and shall be binding upon and inure to the benefit of the Director, any
Permitted Transferee, the Beneficiary and the personal representative(s) and heirs of the Director,
except that the Director may not transfer any interest in any Restricted Stock prior to the release
of the restrictions imposed by Paragraph 2 other than as provided in Paragraph 2 nor may the
Director transfer any interest in any RSUs.
(f) The term “certificate” as used herein with regard to shares of Restricted Stock, includes
electronic registration in the system of the Company’s transfer agent for the Stock. The term
“Committee” means any Committee of the Company’s Board of Directors which is then administering the
Plan if other than the Management Development, Nominating and Governance Committee.
(g) If Purchased Shares are pledged in accordance with the “Rules Relating to Pledges Under
Non-Employee Directors Deposit Share Program” previously delivered to the Director, and are
subsequently transferred (other than to a subsequent pledgee) prior to the Release Date, one and
one-half shares of Restricted Stock shall be forfeited for each Purchased Share so transferred.
15. Permitted Transferee. In the event shares of Restricted Stock are transferred to
a Permitted Transferee, (i) the provisions of Paragraphs 3, 4, 9, and 13 shall apply
mutatis muntandis to the shares so transferred and to the Permitted Transferee;
(ii) the provisions of Paragraphs 5, 8, 10, 11, 12 and 14 shall continue to apply without any
change with respect to the shares so transferred; and (iii) the provisions of Paragraph 6 shall
continue to apply without any change with respect to the shares so transferred, except that the
shares to be forfeited shall be those shares of Restricted Stock that have not vested and which are
held by the Permitted Transferee.
The end of Paragraph 15 is the end of the Incorporated Terms. The remainder of the Agreement
is contained in the Base Instrument.
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ANNEX
Definition of “Change in Control of the Company” and Related Terms
1 Change in Control of the Company. A “Change in Control of the Company” shall be
deemed to have occurred if an event set forth in any one of the following paragraphs shall have
occurred:
(i) any Person (other than (A) the Company or any of its subsidiaries, (B) a
trustee or other fiduciary holding securities under any employee benefit plan of the
Company or any of its subsidiaries, (C) an underwriter temporarily holding
securities pursuant to an offering of such securities or (D) a corporation owned,
directly or indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock in the Company (“Excluded Persons”)) is or
becomes the Beneficial Owner, directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by such Person any securities
acquired directly from the Company or its Affiliates after July 22, 1999, pursuant
to express authorization by the Board of Directors of the Company (the “Board”) that
refers to this exception) representing more than 50% of the total fair market value
of the stock of the Company or representing 50% or more of the total voting power of
the stock of the Company; or
(ii) during any 12 consecutive month period, the following individuals cease for
any reason to constitute a majority of the number of directors of the Company then
serving: (A) individuals who, on July 22, 1999, constituted the Board and (B) any
new director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not limited
to a consent solicitation, relating to the election of directors of the Company, as
such terms are used in Rule 14a-11 of Regulation 14A under the Act) whose appointment
or election by the Board or nomination for election by the Company’s shareholders was
approved by a vote of at least a majority of the directors then still in office who
either were directors on July 22, 1999, or whose initial appointment, election or
nomination for election as a director which occurred after July 22, 1999 was approved
by such vote of the directors then still in office at the time of such initial
appointment, election or nomination who were themselves either directors on July 22,
1999 or initially appointed, elected or nominated by such majority vote as described
above ad infinitum (collectively the “Continuing Directors”); provided, however, that
individuals who are appointed to the Board pursuant to or in accordance with the
terms of an agreement relating to a merger, consolidation, or share exchange
involving the Company (or any direct or indirect subsidiary of the Company) shall not
be Continuing Directors for purposes of this Agreement until after such individuals
are first nominated for election by a vote of at least a majority of the then
Continuing Directors and are thereafter elected as directors by the shareholders of
the Company at a meeting of shareholders held following consummation of such merger,
consolidation, or share exchange; and, provided further, that in the event the
failure of any such persons
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appointed to the Board to be Continuing Directors results in a Change in Control
of the Company, the subsequent qualification of such persons as Continuing Directors
shall not alter the fact that a Change in Control of the Company occurred; or
(iii) a merger, consolidation or share exchange of the Company with any other
corporation is consummated or voting securities of the Company are issued in
connection with a merger, consolidation or share exchange of the Company (or any
direct or indirect subsidiary of the Company) pursuant to applicable stock exchange
requirements, other than (A) a merger, consolidation or share exchange which would
result in the voting securities of the Company entitled to vote generally in the
election of directors outstanding immediately prior to such merger, consolidation or
share exchange continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent thereof) at
least 50% of the combined voting power of the voting securities of the Company or
such surviving entity or any parent thereof entitled to vote generally in the
election of directors of such entity or parent outstanding immediately after such
merger, consolidation or share exchange, or (B) a merger, consolidation or share
exchange effected to implement a recapitalization of the Company (or similar
transaction) in which no Person (other than an Excluded Person) is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any securities
acquired directly from the Company or its Affiliates after July 22, 1999, pursuant
to express authorization by the Board that refers to this exception) representing at
least 50% of the combined voting power of the Company’s then outstanding voting
securities entitled to vote generally in the election of directors; or
(iv) the sale or disposition by the Company of all or substantially all of the
Company’s assets to a Person (in one transaction or a series of related transactions
within any period of 12 consecutive months), other than a sale or disposition by the
Company of all or substantially all of the Company’s assets to (a) a shareholder of
the Company (immediately before the asset transfer) in exchange for or with respect
to its stock; (b) an entity, 50 percent or more of the total value or voting power
of which is owned, directly or indirectly, by the Company; (c) a Person that owns,
directly or indirectly, 50 percent or more of the total value or voting power of all
of the outstanding stock of the Company; or (d) an entity, at least 50 percent of
the total value or voting power of which is owned, directly or indirectly, by a
Person that owns, directly or indirectly, 50 percent or more of the total value or
voting power of all the outstanding voting stock of the Company. It is understood
that in no event shall a sale or disposition of assets be considered to be a sale of
substantially all of the assets unless the assets sold or disposed of have a total
gross fair market value of at least 40% of the total gross fair market value of all
of the Company’s assets immediately prior to such sale or disposition.
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2 Related Definitions. For purposes of this Annex, the following terms, when
capitalized, shall have the following meanings:
(i) Act. The term “Act” means the Securities Exchange Act of 1934, as
amended.
(ii) Affiliate and Associate. The terms “Affiliate” and “Associate”
shall have the respective meanings ascribed to such terms in Rule l2b-2 of the
General Rules and Regulations under the Act.
(iii) Beneficial Owner. A Person shall be deemed to be the “Beneficial
Owner” of any securities:
(a) which such Person or any of such Person’s Affiliates or Associates
has the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own,
(A) securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person’s Affiliates or Associates until
such tendered securities are accepted for purchase, or (B) securities
issuable upon exercise of Rights issued pursuant to the terms of the
Company’s Rights Agreement, dated as of July 22, 1999, between the Company
and Xxxxx Fargo Bank Minnesota, National Association (as successor Rights
Agent), as amended from time to time (or any successor to such Rights
Agreement), at any time before the issuance of such securities;
(b) which such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has the right to vote or dispose of or has
“beneficial ownership” of (as determined pursuant to Rule l3d-3 of the
General Rules and Regulations under the Act), including pursuant to any
agreement, arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
security under this Subsection 1 (c) as a result of an agreement,
arrangement or understanding to vote such security if the agreement,
arrangement or understanding: (A) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations under the Act and (B) is not also then reportable on a
Schedule l3D under the Act (or any comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person’s Affiliates or
Associates has any agreement, arrangement or understanding for the
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purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in Subsection 1(c) (ii) above) or disposing of any voting
securities of the Company.
(iv) Person. The term “Person” shall mean any individual, firm,
partnership, corporation or other entity, including any successor (by merger or
otherwise) of such entity, or a group of any of the foregoing acting in concert.
(v) Stock. The term “stock” shall have the meaning contemplated by
Treasury Regulation 1.409A-1 et seq.
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