RMIC CORPORATION/REPUBLIC MORTGAGE INSURANCE COMPANY 2005 KEY EMPLOYEES PERFORMANCE RECOGNITION PLAN RMIC CORPORATION/REPUBLIC MORTGAGE INSURANCE COMPANY 2005 KEY EMPLOYEES PERFORMANCE RECOGNITION PLAN (Effective as of January 1, 2005) ARTICLE ONE PURPOSE AND EFFECTIVE DATE

 

 

 

 

 

 

 

 

 

 

(Effective as of January 1, 2005) 

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1.1  The Purpose of this Plan is to further the long-term growth in earnings of RMIC Corporation and Republic Mortgage Insurance Company by offering long-term incentives in addition to current compensation to those of their officers and key employees who have been or are expected to be largely responsible for such growth.

 

1.2  This Plan is effective as of January 1, 2005, and shall apply to calculations and awards made in 2005 and subsequent years. In addition, this Plan shall apply to any amounts transferred to this Plan from the RMIC Corporation/Republic Mortgage Insurance Company Amended and Restated Key Employees Performance Recognition Plan, dated August 21, 2004, as amended (the “2004 Plan”).

 

1.3  The Company intends that this Plan comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the Department of Treasury regulations and other guidance promulgated thereunder. This Plan shall be administered in a manner that will comply with Section 409A of the Code. Any provision of this Plan that is not in compliance with Section 409A shall have no force and effect, and no action shall be taken with respect to this Plan that would violate any provisions of Section 409A.

 

 

 

 

2.1  “Plan” shall mean this RMIC Corporation/Republic Mortgage Insurance Company 2005 Key Employees Performance Recognition Plan.

 

2.2  “Company” shall mean jointly RMIC Corporation and Republic Mortgage Insurance Company.

 

2.3  “Employer” and “Employers” shall mean the Company and each other corporation or organization which is wholly or partially owned by the Company, either directly or indirectly, and is designated by the Committee as an Employer under this Plan.

 

 

2.4  “President” shall mean the President of the Company.

 

2.5  “Committee” shall mean the Compensation Committee of the Board of Directors of the Company.

 

2.6  “Employee” shall mean any person who is employed by the Employer on a full-time basis and who is compensated for such employment by a regular salary. “Employee” shall include officers of an Employer but shall not include directors who are not otherwise officers or employees.

 

2.7  “Eligible Employee” shall mean an Employee who pursuant to Section 5.1 hereof has been selected to share in the allocation of the Performance Recognition Pool for any given year.

 

2.8  “Year of Service” shall mean each year of continuous employment with an Employer after first being designated as an Eligible Employee pursuant to Section 5.1 hereof.

 

2.9  “2005 Plan Account” shall mean with respect to any Employee, unless otherwise specified, the record of:

 

(a)  credits in connection with the allocation and interest credited to such account for Calculation Years 2005 and thereafter pursuant to Articles Five and Six of this Plan, and

 

(b)  payments to him or her under the Plan pursuant to Article Six of this Plan, and

 

(c)  forfeitures, if any, pursuant to Articles Six and Seven of this Plan.

 

2.10  “2004 Plan Account” shall mean the total credits which were granted to an Employee’s account under the 2004 Plan, including, unless otherwise specified, those which were vested as well as those which were not vested as of December 31, 2004.

 

 

2.11  “Unvested 2004 Plan and/or Performance Multiplier Account” shall mean those 2004 Plan Account credits which were not vested as of December 31, 2004, together with any Performance Multiplier credits calculated pursuant to paragraph (a) of Section 5.2 of this Plan, or, if all 2004 Plan Account credits were vested as of December 31, 2004, then, the term shall mean just the Performance Multiplier credits calculated pursuant to paragraph (a) of Section 5.2 of this Plan.

 

2.12  “Calculation Year” shall mean the Company’s fiscal year immediately preceding the year in which the Performance Recognition Pool is being calculated.

 

If there is an operating loss in the year prior to the Calculation Year, the “prior year” to be used in the following definitions and for Section 4.1 calculations is the first year prior to the Calculation Year in which there was an operating profit.

2.13  “Target Return on Equity” shall be a percentage equal to two times the mean of the five-year average post-tax yield on 10-year and 30-year U.S. Treasury Securities, where such yields are obtained from public information. The Committee shall annually compute and announce this value as it pertains to a Calculation Year.

 

2.14  “Excess Return on Equity” shall mean the Calculation Year’s Consolidated Net Operating Income divided by the average equity of Old Republic Mortgage Guaranty Group (“ORMGG”) and Old Republic Insured Credit Services, Inc. (“ORICS”) and such amount is divided by the Target Return on Equity. The average equity of ORMGG and ORICS shall be computed by averaging the consolidated equity of ORMGG and ORICS, excluding unrealized gains and losses, at the beginning of each quarter of the Calculation Year.

 

2.15  “Base Salary” shall mean the Eligible Employee’s basic salary earned during the Calculation Year, excluding bonuses, overtime, extraordinary compensation and contributions to the Old Republic International Corporation Employees Savings and Stock Ownership Plan.

 

2.16  “Consolidated Net Operating Income” shall mean the net income of ORMGG and ORICS combined, determined in accordance with GAAP, excluding realized gains or losses on sales of investment securities or any other assets (irrespective of the treatment of such amounts under GAAP) and extraordinary credits or charges.

 

 

2.17  If in any Calculation Year the Company acquires any other business accounted for as a purchase whose earnings contribute five percent (5%) or more to such Year’s Consolidated Net Operating Income, the earnings of the acquired Company for the year of acquisition and the next succeeding year shall be eliminated (together with related purchase accounting adjustments) in order to calculate the performance data described in Sections 2.13 through 2.24 herein. No elimination from any year shall be made when the acquired company has been owned by the Company for two consecutive calendar years. Net operating income shall exclude realized gains or losses on sales of investment securities or any other assets (irrespective of the treatment of such amounts under GAAP) and extraordinary credits or charges.

 

2.18  “Earnings Per Share” shall mean the Consolidated Net Operating Income, divided by 3,369 shares as of December 31, 2005, with the number of such shares being adjusted in subsequent Calculation Years by any capital contributions made by the Parent Company and any reductions of capital computed as dividends in excess of 30% of Consolidated Net Operating Income in the Calculation Year. Adjustments in shares shall be made on the basis of the book value of ORMGG shares at the beginning of the Calculation Year.

 

2.19  “Performance Multiplier” shall mean the number of percentage points by which the Earnings Per Share for the Calculation Year exceeds one hundred twelve percent (112%) of the Earnings Per Share for the prior year.

 

2.20  “Composite Investment Income Yield” shall mean the composite investment income yield on Old Republic International Corporation’s consolidated investment portfolio for the Calculation Year.

 

2.21  “Parent Company” shall mean Old Republic International Corporation.

 

2.22  “Change of Control” shall mean any one of the following events that constitutes a “change in the ownership or effectiveness control of the corporation, or in the ownership of a substantial portion of the assets of the corporation” under Section 409A of the Code:

 

 

(a)  Any one person, or more than one person acting as a group (within the meaning of Section 409A of the Code and the applicable regulations and guidance promulgated thereunder), other than the Old Republic International Corporation Employees Savings and Stock Ownership Trust or any other trust established by or contributed to by the Parent Company or any of its subsidiaries for the benefit of employees of the Parent Company or its subsidiaries, acquires ownership of stock of the Parent Company that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Parent Company; provided that, if any one person or more than one person acting as a group, is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Parent Company, the acquisition of additional stock by the same person or persons is not considered to cause a “Change of Control;” and provided further that, an increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Parent Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this paragraph.

 

(b)  Any one person, or more than one person acting as a group (within the meaning of Section 409A of the Code and the applicable regulations and guidance promulgated thereunder), other than the Old Republic International Corporation Employees Savings and Stock Ownership Trust or any other trust established by or contributed to by the Parent Company or any of its subsidiaries for the benefit of employees of the Parent Company or its subsidiaries, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Parent Company possessing thirty-five percent (35%) or more of the total voting power of the stock of the Parent Company.

 

 

(c)  The date, during any period of twelve (12) consecutive months, on which individuals who at the beginning of such period constitute the entire Board of Directors of the Parent Company shall cease for any reason to constitute a majority thereof, unless the election of each new director comprising the majority was approved by a vote of at least a majority of the Continuing Directors, as hereinafter defined, in office on the date immediately prior to the date of such election. For purposes hereof, a “Continuing Director” shall mean:

 

(i)   any member of the Board of Directors of the Parent Company at the close of business on January 1, 2005;

 

(ii)   any member of the Board of Directors of the Parent Company who succeeded any Continuing Director described in subparagraph (a) above if such successor was elected, or nominated for election by the Parent Company’s stockholders, by a majority of the Continuing Directors then still in office; or

 

(iii)   any director elected, or nominated for election by the Parent Company’s stockholders, to fill any vacancy or newly-created directorship on the Board of Directors of the Parent Company by a majority of the Continuing Directors then still in office.

 

(d)  Any one person, or more than one person acting as a group (within the meaning of Section 409A of the Code and the applicable regulations and guidance promulgated thereunder), acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition by such person or persons) assets from the Parent Company that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all the assets of the Parent Company immediately prior to such acquisition or acquisitions. For the purposes of this paragraph, “gross fair market value” means the value of the assets of the Parent Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. In addition, a transfer of assets by the Parent Company under this paragraph shall not be considered a “Change of Control” if the assets are transferred to:

 

 

(i)   A shareholder of the Parent Company (immediately before the asset transfer) in exchange for or with respect to the Parent Company’s stock;

 

(ii)   An entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Parent Company;

 

(iii)   A person, or more than one person acting as a group, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Parent Company; or

 

(iv)   An entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (c) above.

 

 

 

3.1  The Plan shall be administered by the Committee which shall be appointed by the Board of Directors of the Company from its own independent members. The Committee shall not include any Eligible Employee under this Plan.

 

3.2  Authority to interpret the Plan, to establish and revise rules and regulations relating to the Plan, and to make the determinations which it believes necessary or advisable for the administration of the Plan shall reside with the Committee.

 

3.3  Notwithstanding any contrary provision herein, an account separate from any 2005 Plan Account shall be created under this Plan as of January 1, 2005 for each Employee for whom an account had been maintained under the 2004 Plan (the Employee’s “Unvested 2004 Plan and/or Performance Multiplier Account”). Such account shall commence in the amount of any 2004 Plan Account credits which were not yet vested as of December 31, 2004, if any. If all of the Employee’s 2004 Plan Account credits were fully vested as of such date, then the account created hereunder shall be strictly for any Performance Multiplier credits calculated under paragraph (a) of Section 5.2 below. Except as otherwise specifically provided herein, each Unvested 2004 Plan and/or Performance Multiplier Account balance shall be administered under and subject to the provisions of this Plan.

 

 

 

 

 

4.1  For Calculation Years 2005 and 2006, the calculation of the Performance Recognition Pool shall be made in accordance with the provisions of the 2004 Plan. Calculations for 2007 and thereafter shall be made in accordance with Section 4.2 through 4.4 hereof.

 

4.2  Prior to May 31 of the following year, a calculation of the Performance Recognition Pool for each Calculation Year shall be submitted to the Committee for review and approval. The provisional Performance Recognition Pool for a Calculation Year shall be equal to the lesser of:

 

(a)  the aggregate Base Salaries of the Eligible Employees, times the percentage indicated in Table 1 annexed hereto which is based upon the Excess Return on Equity and the percentage change in (i) the average Earnings Per Share for the three-year period comprised of the Calculation Year and the two immediately preceding fiscal years, over (ii) the average Earnings Per Share for the three-year period comprised of the three fiscal years immediately preceding the Calculation Year; or

 

(b)  two percent (2.0%) of the Company’s Consolidated Net Operating Income (after deductions of preferred stock dividends, if any) for the Calculation Year.

 

4.3  If the resulting provisional Performance Recognition Pool is (i) greater than one hundred seventy-five percent (175%) of the aggregate Eligible Employees’ Base Salaries, or (ii) significantly lower than that of the immediately preceding fiscal year, then the Committee may, in the exercise of its sole discretion, (x) create an unallocated positive balance for the entire excess or a portion thereof or (y) create an unallocated negative balance for the entire shortfall or a portion thereof. Any such unallocated positive balance must, however, be carried forward and fully allocated to the Performance Recognition Pools for one or more of the immediately succeeding three Calculation Years, notwithstanding any other provisions or limitations in this Plan. Any such unallocated negative balance shall be carried forward to one or more of all succeeding Calculation Years without limitation. The President shall participate in any future allocation or deduction of such positive or negative balances as may be approved by the Committee.

 

 

 

4.4  Notwithstanding any provision herein to the contrary, the Performance Recognition Pool shall be zero for any Calculation Year if the Company incurred a net operating loss or a net loss for the Calculation Year.

 

 

 

5.1  Prior to each March 31, the President shall, in consultation with the Committee, designate the Employees employed by the Employers during any part of such Calculation Year who will be eligible to share in the Performance Recognition Pool for that Calculation Year.

 

5.2  Prior to June 1 each year, the President shall recommend to the ORI CEO and to the Committee allocations of any Performance Recognition Pool. In designating Eligible Employees and allocating the Performance Recognition Pool among the Accounts of the Eligible Employees for any Year pursuant to this Article, the President shall consider the positions and responsibilities of Employees, their accomplishments during the year, the value of such accomplishments to the Company, the President’s expectations as to the future contributions of individual Employees to the continued success of the Company and such other factors as the Committee shall, in their discretion and judgment, deem appropriate.

 

(a)  First, the Performance Multiplier shall be calculated for all 2004 Plan Accounts, including both the balances that were vested as well as unvested as of December 31, 2004, of those Employees who have 2004 Plan Account balances in excess of $35,000 on the allocation date and were eligible and actively employed by the Employer during that Calculation Year. Each such 2004 Plan Account at the beginning of the Calculation Year shall be multiplied by the Performance Multiplier. The result, however, shall be credited strictly to the Employee’s Unvested 2004 Plan and or Performance Multiplier Account balance. In no event, however, shall the aggregate amount so credited exceed the lesser of fifteen percent (15%) of the aggregate 2004 Plan Account balances on the allocation date or twenty percent (20%) of the Performance Recognition Pool for that Calculation Year.

 

 

(b)  Following the allocation in paragraph (a) above, if any, the Committee shall allocate for the account of the President of the Company and to such other senior Eligible Employees selected in consultation with the President as it deems appropriate such individual award, if any, as the Committee shall determine.

 

(c)  Finally, the Committee shall review and approve recommendations of the President, for the allocation of the available balance, if any, of the current Performance Recognition Pool to the remaining Eligible Employees.

 

 

 

6.1  Within ninety (90) days of the date the Committee makes such awards, an Eligible Employee shall automatically receive in cash one hundred percent (100%) of any Performance Recognition Pool award up to Twenty-five Thousand Dollars ($25,000.00) and fifty percent (50%) of any excess above that. The remaining fifty percent (50%) of the excess of any such award shall be credited to the Employee’s 2005 Plan Account balance as of such year and shall become vested in accordance with the vesting schedule set forth in Section 6.3.

 

6.2  The 2005 Plan Account balance of each Employee who was either actively employed by the Employer throughout the Calculation Year or whose employment had terminated by reason of retirement in good standing or disability or death shall be credited with interest for that Calculation Year, provided that the Company had positive Consolidated Net Operating Income for that Calculation Year. The rate of interest shall be equal to sixty-five percent (65%) of the Calculation Year’s Composite Investment Income Yield, which shall be calculated by the Committee at the same time as it calculates the Performance Recognition Pool for the Calculation Year. The Account balance to which such interest is credited shall be the Employee’s 2005 Plan Account balance as of the date the Compensation Committee calculates the Performance Recognition Pool for that Calculation Year and shall include all interest previously credited hereunder. No such interest shall be credited to any Unvested 2004 Plan and/or Performance Multiplier Account balance or to any Performance Multiplier credits awarded under this Plan, or to any 2005 Plan Account which has a zero balance at the end of the Calculation Year.

 

 

 

6.3  A portion of the amount of the credit in the 2005 Plan Account and in any Unvested 2004 Plan and/or Performance Multiplier Account of an Employee as of the date he or she terminates his or her service for any reason, including death, retirement for age or disability, shall be paid to the person or persons entitled thereto at the times and in the manner provided by Section 6.4 hereof. The amounts to be paid shall be known as a “vested interest,” and shall be equal to the following percentage of the balance of his or her 2005 Plan Account and, if applicable, Unvested 2004 Plan and/or Performance Multiplier Account balance credits:

 

    Completed Years              To Be Paid

      of  Service       (Vested Interest)

Less than One    0%

 One    10%

Two    20%

Three              30%

Four    40%

Five    50%

Six                                60%

Seven                          70%

Eight                            80%

Nine                             90%

Ten                            100%

Any credits in either the 2005 Plan Account or the Unvested 2004 Plan and/or Performance Multiplier Account of an Employee which have not vested by the date of termination of the Employee’s service shall be forfeited. All such forfeitures shall be allocated at the end of the Calculation Year in which they occur to the combined 2005 Plan Accounts and Unvested 2004 Plan and/or Performance Multiplier Accounts of all Employees who were actively employed by an Employer on December 31 of that year. The allocation shall be made in the ratio that the combined account balances of each such Employee on January 1 of that year bears to the total combined account balances of all such Employees.

 

 

6.4  The vested interest of an Employee shall begin to be paid in substantially equal quarterly installments over a period of five (5) years, with the first such payment to be made on the later of:

 

(a)  the date of the Employee’s termination of employment for any reason, including death or disability, or the six-month anniversary of the date of termination if the Employee is a “specified employee” at the time of termination within the meaning of Code Section 409A; or

 

(b)  the date on which the Employee attains (or would have attained if he or she had lived) age 55.

 

For purposes of this Section, specified employee status will be determined based on the twelve (12) months ended December 31 of each year and will be effective for the twelve-month period commencing on April 1 of the following year.

6.5  Notwithstanding the foregoing Sections of this Article, an Employee’s entire 2005 Plan Account balance and entire Unvested 2004 Plan and/or Performance Multiplier Account balance, if any, shall become fully vested and non-forfeitable and shall be paid to him or her in a lump sum on the first day of the calendar quarter following the date on which any Change of Control occurs. If there is a carry forward balance not allocated pursuant to Section 5.3 when a Change of Control occurs, such carry forward balance shall be immediately allocated among the 2005 Plan Accounts of all Employees in the ratio that each such Employee’s 2005 Plan Account balance bears to the total of all such 2005 Plan Account balances. Said additional amounts shall be one hundred percent (100%) vested and paid in accordance with the provisions of this Article. Any subsequent contributions allocated to an Employee’s 2005 Plan Account or Unvested 2004 Plan and/or Performance Multiplier Account during the two (2) years following the occurrence of a Change of Control because the Plan is continued in accordance with Section 8.2 hereof shall be non-forfeitable and shall be distributed immediately after such allocation.

 

 

 

6.6  An Employee may designate in writing, on forms prescribed by and filed with the Committee, a beneficiary or beneficiaries to receive any payments payable after his or her death. If an Employee dies while employed by an Employer or after he or she has begun to receive his or her benefits under this Plan, the 2005 Plan Account and any Unvested 2004 Plan and/or Performance Multiplier Account balances (or the remainder thereof if the payment of benefits had already commenced) shall be paid to the beneficiary or beneficiaries designated by the Employee (or, in the absence of such designation, to his or her legal representative).

 

6.7  Notwithstanding any other provisions of this Plan to the contrary, the Committee may deduct from any payment under the Plan any taxes required to be withheld by the Federal or any state or local government for the account of such Employee.

 

 

 

7.1  As a condition to the continued receipt of benefits hereunder each Employee:

 

(a)  shall be required for a period of three (3) years after his or her termination of employment with an Employer hereunder to hold himself or herself available to the Company and his or her Employer for reasonable consultation inasfar as his or her health permits;

 

(b)  shall not for a period of three (3) years after his or her termination of employment with an Employer hereunder, either as an individual on his or her own account, as a partner, joint venturer, employee, agent, salesman for any person; as an officer, director or stockholder (other than a beneficial holder of not more than one percent (1%) of the outstanding voting stock of a company having at least 500 holders of voting stock) of a corporation, or otherwise directly or indirectly,

 

 

(i)   enter into or engage in any business competitive with that carried on by the Company or his or her Employer within any area of the United States in which his or her Employer or the Company is then doing business, providing Employee has had access to any of the Company’s or his or her Employer’s trade secrets, secret underwriting or business information, programs, plans, data, processes, techniques, or customer information; or

 

(ii)   solicit or attempt to solicit any of his or her Employer’s or the Company’s customers with whom Employee has had contact as an Employee in the exercise of his or her duties and responsibilities hereunder with the intent or purpose to perform for such customer the same or similar services or to sell to such customer the same or similar products or policies which Employee performed for or sold to such customer during the term of his or her employment.

If the Committee determines that an Employee has refused to make himself or herself available for consultation or violated his or her agreement, the Committee may, by written notice to such Employee, cause his or her benefits to be immediately suspended for the duration of such refusal or competition or if payment of benefits had not yet commenced, notify the Employee that such continued conduct will cause a forfeiture of his or her 2005 Plan Account and any Unvested 2004 Plan and/or Performance Multiplier Account balance. If after the sending of such notice the Committee finds that the Employee has continued to refuse to consult or continue to compete with the Company or his or her Employer for a period of thirty days following such notice, the Committee may permanently cancel the Employee’s 2005 Account and any Unvested 2004 Plan and/or Performance Multiplier Account hereunder, and thereupon all rights of such Employee under this Plan shall terminate. The foregoing forfeiture provisions shall be inoperative following a Change of Control.

7.2  Any amounts forfeited pursuant to Section 7.1 hereof shall be allocated as a forfeiture in accordance with Section 6.3 hereof.

 

 

 

 

8.1  The Company shall have the power at any time and from time to time, to amend this Plan by resolution of its Board of Directors provided, however, that no amendment under any circumstances may be adopted the effect of which would be to deprive any Participant of his or her then vested interest, if any, in this Plan.

 

8.2  The Company reserves the right to terminate this Plan by resolution of its Board of Directors. Upon termination of this Plan, the credits in the 2005 Plan Accounts and Unvested 2004 Plan and/or Performance Multiplier Accounts of Employees shall become one hundred percent (100%) vested and non-forfeitable. Distribution of the balances shall be made in accordance with Section 6.4 or 6.5 hereof upon the Employee’s subsequent retirement or termination of service. There shall be no increase in a 2005 Plan Account or an Unvested 2004 Plan and/or Performance Multiplier Account balance of an Employee between the date the Plan is terminated and the date such balances are distributed. If a Change of Control occurs, the Plan as it then exists must be continued, with interest credited to 2005 Plan Account balances, and any available Performance Multiplier credited to Unvested 2004 Plan and/or Performance Multiplier Account balances as provided in Sections 6.2 and 5.2, for two (2) years before it can be terminated. Any unallocated balance carried forward shall be similarly allocated prior to the expiration of such two-year period. All balances shall be fully vested and distribution shall be made in accordance with Section 6.4 hereof.

 

 

 

9.1  No Employee or any other person shall have any interest in any fund or reserve account or in any specific asset or assets of the Company or any Employer by reason of any credit to his 2005 Plan Account or Unvested 2004 Plan and/or Performance Multiplier Account under this Plan, nor have the right to receive any distribution under this Plan except as and to the extent expressly provided for in the Plan.

 

 

9.2  Nothing in the Plan shall be construed to:

 

(a)  give any Employee any right to participate in the Plan, except in accordance with the provisions of the Plan;

 

(b)  limit in any way the right of an Employer to terminate an Employee’s employment; or

 

(c)  be evidence of any agreement or understanding, express or implied, that an Employer will employ an Employee in any particular position or at any particular rate of remuneration.

 

9.3  No benefits under this Plan shall be pledged, assigned, transferred, sold, or in any manner whatsoever anticipated, charged, or encumbered by an Employee, former Employee, or their beneficiaries, or in any manner be liable for the debts, contracts, obligations or engagements of any person having a possible interest in the Plan, voluntary or involuntary, or for any claims, legal or equitable, against any such person, including claims for alimony or the support of any spouse. Notwithstanding the foregoing, benefits under this Plan may be assigned to or made subject of a valid living trust.

 

9.4  Notwithstanding any contrary provision herein, in the case of any assets set aside (directly or indirectly) in a trust (or other arrangement as provided under regulations issued by the Department of Treasury) for purposes of paying deferred compensation under this Plan, no such assets (or trust) shall ever be located or transferred outside the United States.

 

9.5  No acceleration of the time or schedule of any distribution or payment under this Plan shall be permitted, except to the extent provided in regulations or other guidance issued by the Department of the Treasury under Code Section 409A.

 

9.6  Notwithstanding any contrary provision herein, no transfer of assets shall be made under or in connection with the Plan, or any compensation deferred under the Plan, that would result in such assets becoming restricted to the provision of benefits under the Plan in connection with a change in the Company’s financial health, as provided under Code Section 409A and the regulations or other guidance issued by the Department of the Treasury thereunder.

 

 

9.7  This Plan shall be construed in accordance with the laws of the State of North Carolina in every respect, including, without limitation, validity in its interpretation and performance.

 

9.8  Article headings and numbers herein are included for the convenience or reference only, and this Plan is to be construed without any reference thereto. If there be any conflict between such numbers and headings and the text hereof, the text shall control.

 

9.9  Wherever appropriate, words used in this Plan in the singular includes the plural and the masculine includes the feminine.

 

IN WITNESS WHEREOF, the Company has caused this Plan to be signed by its duly qualified officers and caused its corporate seal to be hereunto affixed on this          day of     , 2006.

            RMIC CORPORATION/REPUBLIC

            MORTGAGE INSURANCE COMPANY

            By:          

            Title:       

Attest:

By:           

Title: