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MGIC Investment Corporation | June 18, 2018 Dear Shareholder: It is my pleasure to invite you to attend our Annual Meeting of Shareholders to be held at 2:00 p.m. on Wednesday, July 25, 2018, at the Corporation's headquarters in Milwaukee, Wisconsin. At our meeting, we will ask shareholders to: | |||
Notice of 2018 Annual Meeting and Proxy Statement | • elect eleven directors, • conduct an advisory vote to approve MGIC’s executive compensation, • approve our Amended and Restated Rights Agreement, and • ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2018. We will also report on our business. Your vote is important. Even if you plan to attend the meeting, we encourage you to vote as soon as possible. You may vote by telephone, online or by mail. Please read our Proxy Statement for more information about our meeting and the voting process. | |||
2017 Annual Report to Shareholders | The Annual Report to Shareholders, which follows the Proxy Statement in this booklet, is a separate report and is not part of this Proxy Statement. | |||
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Patrick Sinks President and Chief Executive Officer | ||||
March 28, 2016
Dear Shareholder:
It is my pleasure to invite you to attend our Annual Meeting of Shareholders to be held at 9:00 a.m. on Thursday, April 28, 2016, in the Bradley Pavilion of the Marcus Center for the Performing Arts in Milwaukee, Wisconsin.
At our meeting this year, we will ask shareholders to:
·elect eleven directors,·conduct an advisory vote to approve MGIC's executive compensation,·approve our Amended and Restated Rights Agreement, and·ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016.
We will also report on our business.
Your vote is important. Even if you plan to attend the meeting, we encourage you to vote as soon as possible. You may vote by telephone, over the Internet or by mail. Please read our Proxy Statement for more information about our meeting and the voting process.
The Annual Report to Shareholders, which follows the Proxy Statement in this booklet, is a separate report and is not part of this Proxy Statement.
Sincerely,
Patrick SinksPresident and Chief Executive Officer
IMPORTANT VOTING INFORMATION COMMITTEE MEMBERSHIP AND MEETINGS NOMINEES FOR DIRECTOR COMPENSATION OF DIRECTORS ITEM 2 – ADVISORY VOTE TO APPROVE OUR EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS Compensation-Related Corporate Governance Policies and Best Practices Objectives of our Executive Compensation Program How We Make Compensation Decisions Components of our Executive Compensation Program Other Aspects of our Executive Compensation Program Compensation Committee Report Summary Compensation Table Outstanding Equity Awards Potential Payments Upon Termination or Change-in-Control Change in Control Agreements and Severance Pay Related Person Transactions Section 16(a) Beneficial Ownership Reporting Compliance ITEM 4 APPENDIX A – Statement before voting. Please refer to our Glossary of Terms and Acronyms in Appendix A to this Proxy Statement for definitions of certain capitalized terms. Through our subsidiary, Mortgage Guaranty Insurance Corporation ("MGIC"), we are a leading provider of mortgage insurance to lenders throughout the United States and to Fannie Mae and Freddie Mac (the “GSEs”). In In Shareholders of Record received such instructions. Broker non-votes will not be counted as votes for or against any matter. Brokers and other February 18, 2019. The Vanguard Group, Inc.(1) BlackRock, Inc.(2) Daniel A. Arrigoni Cassandra C. Carr C. Edward Chaplin Curt S. Culver Timothy A. Holt Kenneth M. Jastrow, II Michael E. Lehman Donald T. Nicolaisen Gary A. Poliner Mark M. Zandi Patrick Sinks Timothy M. Mattke Gregory A. Chi James J. Hughes Jeffrey H. Lane All Directors and Executive Officers as a Group (16 Persons) the SEC on March 24, 2015 very familiar with our business and strategic plans as reviewed by the Board. Mr. Culver has been with us since 1985, and served as Chief Executive Officer from 2000 until his retirement in 2015, when he became our non-executive Chairman of the Board. Daniel A. Arrigoni Cassandra C. Carr C. Edward Chaplin Curt S. Culver Timothy A. Holt Kenneth M. Jastrow, II Michael E. Lehman Donald T. Nicolaisen Gary A. Poliner Patrick Sinks Mark M. Zandi 2015 Meetings ” ” other things, help it evaluate and oversee our executive compensation program and review the compensation of our directors. The scope of the Compensation The ethical conduct and integrity, well-respected experience at senior levels of business, academia, government or other fields, ability to commit sufficient time and attention to Board activities, anticipated tenure on the Board, and whether an individual will enable the Board to continue to have a substantial majority of independent directors. In addition, the Management Development, Nominating and Governance Committee in conjunction with the Board periodically evaluates the composition of the Board to assess the skills and experience that are currently represented on the Board, as well as the skills and experience that the Board will find valuable in the future. The Management Development, Nominating and Governance Committee seeks a variety of occupational and personal backgrounds on the Board in order to obtain a range of viewpoints and perspectives and enable the Board to have access to a diverse body of talent and expertise relevant to our activities. The Annual Retainer – Chairman of the Board $125,000, which may be elected to be deferred and either converted into cash-settled share units or credited to Annual Retainer – Lead Director $25,000 Annual Retainer – Committee Chair Annual Retainer – Committee Member Expense Reimbursement Subject to certain limits, we reimburse directors, and for meetings not held on our premises, their spouses, for travel, lodging and related expenses incurred in connection with attending Board and Committee meetings. Directors & Officers Insurance We pay premiums for D&O liability insurance under which the directors are insureds. relatively brief period in advance of the payment date(s). If a director defers In January Daniel A. Arrigoni Cassandra C. Carr C. Edward Chaplin Timothy A. Holt Kenneth M. Jastrow, II Michael E. Lehman Donald T. Nicolaisen Gary A. Poliner Mark M. Zandi Directors CD&A. Total Direct Compensation of CEO and Direct Reports as a Percentage of Adjusted Net Income Equity Compensation with Low Burn Rate and gross-up provision. Compensation Risk retirement. TDC. The objectives of our executive compensation program are to: ” Our Chairman of the Board, who was previously our CEO but now is not a member of our management, regularly participates in meetings of the Committee. compensation or when the Committee members meet among themselves. Peer Group 75th percentile Median 25th percentile MGIC MGIC Percentile Rank MGIC Annualized TSR Percentile Rank within Peer Group whose ultimate value reflects our stock price. As shown in the chart below, a large percentage (84.5%) of our CEO's TDC is at-risk through the annual bonus and long-term equity awards. Adjusted net operating income (including per diluted share) is a non-GAAP measure of performance. For a reconciliation of this measure to its nearest comparable GAAP measure, see was in effect for 2016 and 2017. Maximum Bonus Opportunity Peer Group 25th percentile Median 75th percentile MGIC Determination of The Diluted income (loss) per share Adjustment for Tax Pre-tax diluted earnings per share Adjustment for reserve development Pre-tax diluted earnings per share calculated after excluding the effects of favorable reserve development Financial Performance Goals: Pre-tax Diluted EPS(1) Pre-tax Return on Equity(2) New Insurance Written (bns)(3) Loss Ratio(4) Expense Ratio(5) Total Times: Total Weight of Financial Performance Goals Business Performance Goals: Capital Position(6) For a discussion of performance Business Mix(7) Succession Planning(8) Regulatory / Legislative(9) Total Times: Total Weight of Business Performance Goals Percent of Maximum Bonus CEO Bonus (% of Maximum) Income (Loss) Before Tax (millions) Year-end Stock Price their maximum bonuses. The CEO Benchmark Peer Group’s ROEs for 2016 shown by Bloomberg and confirms our January 2017 view that our ROE target was set at a reasonably rigorous level. .Consistent with our belief that there should be a strong link between compensation and performance, long-term equity awards 2017 Long-Term Equity Awards. To further align our long-term equity awards with the interests of shareholders, the 2017 long-term equity awards granted to our NEOs reflect the following changes compared to the 2016 awards. Long-Term Equity — COMPENSATION DISCUSSION & ANALYSIS BV Awards and 2015 Other Long-Term Equity Awards parking space at our headquarters and CEO. Patrick Sinks Average of Other NEOs termination. For participants with KEESAs effective before October 23, 2014, and who are younger than age 62, payments under the KEESAs, or under any other agreement with or plan of the Company, are similarly reduced only if the resulting after-tax value to the participant of the total payments upon a change in control is greater than the after-tax value to the participant if the cash payments were not so reduced with the participant responsible for the excise taxes. deductible. Shareholders. Patrick Sinks President and Chief Executive Officer Timothy Mattke(5) Executive Vice President and Chief Financial Officer Gregory Chi(5) James Hughes(5) Jeffrey Lane Executive Vice President and General Counsel Curt Culver(6) Chairman and Former Chief Executive Officer Patrick Sinks Timothy Mattke Gregory Chi James Hughes Jeffrey Lane Curt Culver Patrick Sinks Timothy Mattke Gregory Chi James Hughes Jeffrey Lane Curt Culver(6) Patrick Sinks Timothy Mattke Gregory Chi James Hughes Jeffrey Lane Patrick Sinks Timothy Mattke Gregory Chi James Hughes Jeffrey Lane Curt Culver(4) Vesting for the awards granted in 2015 and 2016 will occur based on achievement of a three-year cumulative goal for growth in adjusted book value per share. For more information, see Patrick Sinks Timothy Mattke Gregory Chi James Hughes Jeffrey Lane Curt Culver(2) Patrick Sinks Timothy Mattke Gregory Chi James Hughes Jeffrey Lane Curt Culver Patrick Sinks Timothy Mattke Gregory Chi Jay Hughes Jeffrey Lane upon a change in control was greater than the after-tax value to the participant if the cash payments were not so reduced with the participant responsible for the excise taxes. Post-Termination Vesting of Certain Restricted Equity Awards control if the Committee reasonably determines in good faith prior to the occurrence of the change in control that the awards will be assumed or replaced by the employee’s employer immediately following the change in control with an alternative award meeting specified requirements. For purposes of the table above, we assume that the awards will be so assumed or replaced. Agreement will expire by its terms on August 1, 2018. “ownership change” discussed below. Agreement by the 2018 Rights Agreement 2020. received upon such exercise, equals an integral number of Common Shares. In lieu of issuing fractional Common Shares upon the exchange of Rights, the Company will pay cash with an equivalent value based on the market price of the Common Shares on the last trading day prior to the date of exchange. C Potential Impact on ITEM 4 Audit Fees Audit-Related Fees Tax Fees All Other Fees Total Fees Book Value per Share to Adjusted Book Value ("ABV") per Share C — AMENDED AND RESTATED RIGHTS AGREEMENT Section 1. Section 2. Section 3. Section 4. Section 5. Section 6. Section 7. Section 8. Section 9. Section 10. Section 11. Section 12. Section 13. Section 14. Section 15. Section 16. Section 17. Section 18. Section 19. Section 20. Section 21. Section 22. Section 23. Section 24. Section 25. Section 26. Section 27. Section 28. Section 29. Section 30. Section 31. Section 32. Section 33. Section 34. Section 35. Section 36. Exhibit A Exhibit B subsequently becomes a Beneficial Owner of 5.0% or more of the Common Shares then outstanding (or fails to continue to qualify as a Grandfathered Person or Exempt Person), unless the Person independently meets the conditions set forth in this subsection (iv) with respect to the circumstances relating to the Person, together with its Affiliates and Associates, subsequently becoming a Beneficial Owner of 5.0% or more of the Common Shares then outstanding (or failing to continue to qualify as a Grandfathered Person or Exempt Person); Treasurer, the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Right Certificates shall be countersigned by the Rights Agent manually or by facsimile and shall not be valid for any purpose unless countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed such Right Certificates had not ceased to be such officer of the Company. Any Right Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Rights Agreement any such person was not such an officer. Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. Section 8. Cancellation and Destruction of Right Certificates to the contrary, the Rights shall not be exercisable for securities in any jurisdiction if the requisite qualification in such jurisdiction has not been obtained, such exercise is not permitted under applicable law or a registration statement in respect of such securities has not been declared effective. Associate or Affiliate thereof; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be cancelled. The Company shall use all reasonable efforts to ensure that the provisions of this paragraph are complied with, but shall have no liability to any holder of Right Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder. be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Common Shares outstanding on such record date plus the number of Common Shares which the aggregate offering price of the total number of Common Shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price and the denominator of which shall be the number of Common Shares outstanding on such record date plus the number of additional Common Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights. Common Shares owned by or held for the account of the Company or any Subsidiary of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. trading on any national securities exchange, the last quoted price reported at or prior to 4:00 P.M. Eastern time or, if not so quoted, the average of the high bid and low asked prices in the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement. Section 16. Agreement of Right Holders Section 19. Merger or Consolidation or Change of Name of Rights Agent. misconduct (which gross negligence or willful misconduct must be determined by a final, non-appealable judgment of a court of competent jurisdiction). Rights Agent, whether appointed by the Company or by such a court, shall be (a) a legal business entity organized and doing business under the laws of the United States or of shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for Section 25. Notice of Certain Events. postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. of any of the provisions hereof. Any reference in this Agreement to a statutory or regulatory provision includes a reference to any successor provision thereof. practices, our Board extended the term of and otherwise amended and restated that rights agreement effective on July 7, 2009, July 25, 2012, and July 23, 2015 (the “2015 Rights Agreement”) and on April 26, 2018 amended and restated the 2015 Rights Agreement effective August 1, 2018, subject to the Company’s shareholders approving such amendment and restatement at the 2018 Annual Meeting of Shareholders, scheduled to be held in July 2018. Until such shareholder approval, the 2015 Rights Agreement remains in effect."street“street name,"” meaning your shares are held in a stock brokerage account or by a bank or other nominee, you will have received a voting instruction form from that nominee containing instructions that you must follow in order for your shares to be voted. If you do not transmit your voting instructions before the Annual Meeting, your nominee can vote on your behalf only on only the matter considered to be routine, which is the ratification of the appointment of our independent registered public accounting firm.compensation, and approval of our Amended and Restated Rights Agreement.compensation. Your nominee is not permitted to vote on your behalf on such matters unless you provide specific instructions by following the instructions from your nominee about voting your shares and by completing and returning the voting instruction form. For your vote to be counted on such matters, you will need to communicate your voting decisions to your broker, bank broker or other nominee before the date of the Annual Meeting. broker or other nominee through which you hold your shares. The Securities and Exchange Commission ("SEC"(“SEC”) also has a website (www.sec.gov/spotlight/proxymatters.shtml) with more information about voting at annual meetings. Additionally, you may contact our Investor Relations personnel at (414) 347-6480.IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALSFOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 28, 2016Our Proxy Statement and 2015 Annual Report to Shareholders are available athttp://mtg.mgic.com/proxyinfo. Your vote is very important. Whether or not you plan to attend the Annual Meeting, we hope you will vote as soon as possible. You may vote your shares via a toll-free telephone number, over the Internet, or by completing, signing, dating and returning your proxy card or voting instruction form in the pre-addressed envelope provided. No postage is required if your proxy card or voting instruction form is mailed in the United States. If you attend the meeting, you may vote in person, even if you have previously voted by telephone, over the Internet or by mailing your proxy card. If you hold your shares through an account with a brokerage firm, bank or other nominee, please follow the instructions you receive from them to vote your shares.
MGIC INVESTMENT CORPORATIONOur Proxy Statement and 2017 Annual Report to Shareholders are available at http://mtg.mgic.com/financial-information/annual-reports. Your vote is very important. Whether or not you plan to attend the Annual Meeting, we hope you will vote as soon as possible. You may vote your shares via a toll-free telephone number, online, or by completing, signing, dating and returning your proxy card or voting instruction form in the pre-addressed envelope provided. No postage is required if your proxy card or voting instruction form is mailed in the United States. If you attend the meeting and are a holder of record entitled to vote, you may vote in person, even if you have previously voted by telephone, online or by mailing your proxy card. If you hold your shares through an account with a brokerage firm, bank or other nominee, please follow the instructions you receive from them to vote your shares. the Bradley Pavilion of the Marcus Center for the Performing Arts, 929 North Water Street, Milwaukee, Wisconsin, on April 28, 2016,July 25, 2018, at 9:2:00 a.m.p.m., to vote on the following matters:(1)Election of the eleven directors named in the Proxy Statement, each for a one-year term;(1) Election of the eleven directors named in the Proxy Statement, each for a term ending at the Annual Meeting in 2019; (3) Approval of our Amended and Restated Rights Agreement; (3)Approval of our Amended and Restated Rights Agreement;(4) Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2018; and (4)Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016; andMarch 4, 2016,on June 1, 2018, will be entitled to vote at the Annual Meeting and any postponement or adjournment of the meeting. By Order of the Board of Directors
Jeffrey H. Lane, Secretary March 28, 2016June 18, 2018 YOUR VOTE IS IMPORTANTPLEASE PROMPTLY VOTE VIA TOLL-FREE TELEPHONE NUMBER, OVER THE INTERNETOR BY COMPLETING, SIGNING, DATING AND RETURNINGYOUR PROXY CARD OR VOTING INSTRUCTION FORM
TABLE OF CONTENTS9Director Independence10Board Leadership10Communicating with the Board1112Management Development, Nominating and Governance Committee12Risk Management Committee13Securities Investment Committee13Executive Committee14Board Oversight of Risk14Director Selection1420202015 Director Compensation2224 Executive Summary Business Highlights25Financial Performance26Business Performance28Senior Executive Compensation as a Percentage of Net Income 2014 versus 201528InvestorShareholder Outreach and Consideration of Last Year's "SayYear’s “Say on Pay"Pay” Vote Benchmarking – MGIC Selected Peer Group 2015 Grants Of Plan-Based AwardsAt 2015at 2017 Fiscal Year-End 2015 Option Exercises And Stock Vested Pension Benefits At 2015 Fiscal Year-End50 Protection of Valuable NOL Carryforward Assets56Protection Against Abusive Takeover Practices57Reasons the Board Recommends Approval57Description of the Rights Agreement57Certain Considerations Relating to the Rights Agreement60Shareholder Vote Required61REPORT OF THE AUDIT COMMITTEE61–- RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMAudit and Other Fees63HOUSEHOLDING63AMENDEDGLOSSARY OF TERMS AND RESTATED RIGHTS AGREEMENTTo assistin reviewing the proposals to be acted upon at the Annual Meeting, including the election of directors and the advisory vote to approve named executive officer compensation, we call your attention to the following information about the Company's 2015 business highlights and recent executive compensation actions and decisions. The following description is only a summary. For more complete information about these topics, pleaseshould consider. Please review the Company's Annual Report on Form 10-K and theCompany’s complete Proxy Statement.Proposal Voting Matter More Information Board Vote Recommendation 1 Election of Eleven Director Nominees FOR each Director Nominee 2 Advisory Vote on Executive Compensation FOR 3 Approval of our Amended and Restated Rights Agreement FOR 4 Ratification of Independent Registered Public Accounting Firm FOR 2015,2017, our total revenues were $1.1 billion and as of December 31, 2017, our primary insurance in 2014,force, an important driver of our future revenues, was $194.9 billion. In 2017, the Company delivered strongcontinued to deliver outstanding results for its shareholders as shown by the financial and operational metrics below. Each of theseThese metrics, is included in eitheramong others, were considered when determining the formula used to determine the 20152017 bonuses of our named executive officers ("NEOs") or the formula used to determine March 2016 vesting of long-term equity awards granted in 2015.
(1) Pre-tax diluted earningsAdjusted Net Operating Income per shareDiluted Share is a non-GAAP measure of performance. For a description of how we calculate this measure and for a reconciliation of this measure to its nearest comparable GAAP measure, see Adjusted book value per shareAppendix B (1)to this Proxy Statement.
Pre-tax return on beginning shareholders' equityNew insurance written(2)
(1)Adjusted book value per share, for purposes of determining vesting of 80% of our CEO's long-term equity awards granted in 2015, is calculated excluding the effects on shareholders' equity of deferred tax assets and accumulated other comprehensive income.(2)New insurance written refers to direct new insurance written (before the effects of reinsurance).MGIC Investment Corporation -2016 Proxy Statement| 1Financial Performance (continued)(2)Loss ratio(1)Expense ratio(2)
New insurance written refers to direct new insurance written (before the effects of reinsurance).(1)Our loss ratio, for purposes of determining 2015 bonuses and vesting of 20% of our CEO's long-term equity awards granted in 2015, is the ratio of direct (before the effects of reinsurance) losses incurred to direct premiums earned from the particular policy year. Incurred losses exclude the effect of losses incurred on notices of default that have not yet been reported to us, which is commonly known as "IBNR."(2)Our expense ratio, for purposes of determining 2015 bonuses and vesting of 20% of our CEO's long-term equity awards granted in 2015, is the ratio of combined insurance operations underwriting expenses divided by net premiums written. Although the 2015 expense ratio of 14.9% is slightly higher than 2014's ratio of 14.7%, it remains lower than the expense ratio of each of our competitors who disclose this information.2 | MGIC Investment Corporation -2016 Proxy Statement2015,2017, the Company also achieved favorable results against thevarious business metricsobjectives, including those listed below. Each of these metrics is included in the formula used to determine the 2015 bonuses of our NEOs.Capital Position·Successfully renegotiated our reinsurance agreement, which resulted in it receiving 100% credit under the private mortgage insurer eligibility requirements ("PMIERs") of Fannie Mae and Freddie Mac (the "GSEs") (providing $650 million of PMIERs capital) and state insurance regulations, all at an attractive after-tax cost of capital.·Met final PMIERs financial requirements with a cushion of approximately $500 million at December 31, 2015.·Obtained first dividends from regulated insurance subsidiaries since 2008.Succession Planning·After conducting a thorough search process, replaced the retiring Chief Risk Officer and retiring Chief Information Security Officer with highly qualified individuals.·Successfully integrated four new CEO direct reports into the CEO's staff of senior officers. Regulatory/Legislative·Worked with the industry to influence changes to draft PMIERs that resulted in lower capital requirements on delinquent loans.·Worked with Congress, the Administration, regulators and trade groups to enhance opportunities for the broader use of private mortgage insurance within the current GSE framework and to include favorable language in proposed housing finance legislation.Business Mix·Despite competitive pricing pressures, we increased market share while writing high quality new business.·New insurance written is expected to produce mid-teens returns on PMIERs capital, after considering the effects of reinsurance.·More than 80% of the new insurance written in 2015 was on loans whose borrowers had FICO scores greater than 700.This Proxy Statement contains forward-looking statements. Forward-looking statements consist of statements which relate to matters other than historical fact, including matters that inherently refer to future events. Among others, statements that include words such as "believe," "anticipate," "will," or "expect" or words of similar import, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risk factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include those listed in Appendix B to this Proxy Statement. Additional information concerning these and other factors is contained in our filings with the SEC. All forward-looking statements speak only as of the date of this Proxy Statement. We assume no obligation, and disclaim any obligation, to update information contained in this Proxy Statement.MGIC Investment Corporation -2016 Proxy Statement| 3During 2014 and 2015, as a result of feedback received from shareholders and others, the Management Development, Nominating and Governance Committee changed our executive compensation program in the respects described below. Please refer to page 28 for information about the results of our shareholder engagement efforts.·Modified the annual bonus plan for 2014 and 2015 for certain of the Company's employees, including our NEOs, to provide more transparency so that shareholders may observe how payments under the annual bonus plan are aligned with Company performance. Please refer to page 37 for a description of our 2015 bonus plan.·Modified the vesting goals for 2015 and 2016 grants of restricted stock units as follows (please refer to page 41 for a description of our 2015 and 2016 grants):oVesting is no longer based on goals similar to those used for the annual bonus planoVesting will no longer be based on annual goal achievement; instead, full vesting requires achievement of a three-year cumulative book value growth goal·Modified our change in control agreements (our "Key Executive Employment and Severance Agreements" or "KEESAs") as follows (please refer to page 44 for a description of our KEESAs):oEliminated single trigger vesting of equity awards under the KEESAsoEliminated excise tax gross-ups from the KEESAs·Extended the scope of our "clawback" policy so that it applies to cash compensation in addition to the previously covered compensation from equity awards. Please refer to page 44 for a description of our clawback policy.In addition to the changes described above, our 2015 Omnibus Incentive Plan, which provides for equity-based and other incentive awards to participants and which shareholders approved at our 2015 Annual Meeting, contained the following changes compared to our 2011 Omnibus Incentive Plan (please refer to page 31 for a description of certain other provisions of our 2015 Omnibus Incentive Plan):·No automatic single trigger vesting of equity awards upon a change in control·No share recycling for shares withheld for tax purposes·No ability of the Management Development, Nominating and Governance Committee to accelerate vesting, except under certain specified instances (such as death or retirement)·Minimum vesting period for all except 5% of shares to be issued under the plan VOTING MATTERS AND BOARD RECOMMENDATIONSVoting MatterOur Board Vote Recommendation Results Election of Eleven Director Nominees (page 20)FOR each Director Nominee Advisory Vote on Executive Compensation (page 24)Capital Position - Manage capital with consideration of compliance requirements, access to capital, levels of capital, mix of sources of capital, and financial flexibility.» FOR Approval- Manage the 2017 book of our Amendedbusiness by product, geography and Restated Rights Agreement (page 55)customer to produce a desirable volume and mix.» FORRatificationIndependent Registered Public Accounting Firm (page 62)FOR NIW consistent with return goals and at levels of risk within risk appetite.4 | MGIC Investment Corporation -2016 Proxy StatementName Director Since Primary Occupation Independent Daniel A. Arrigoni 67 2013 ü Cassandra C. Carr 73 2013 Consultant; Former Global Vice Chair of Talent at Hill+Knowlton Strategies ü C. Edward Chaplin 61 2014 ü Curt S. Culver 66 1999 • Executive 65 2012 Former SVP and Chief Investment Officer of Aetna, Inc. ü Kenneth M. Jastrow, II 71 1994 ü 67 2001 Interim Vice Provost for Information Technology and Chief Information Officer (until August 1, 2018) and Special Advisor to the Chancellor of the University of Wisconsin; Former EVP and CFO of Sun Microsystems, Inc. ü 55 2018 President of Taco Bell International (retiring in Summer 2018) • Audit
• Risk ManagementGary A. Poliner 65 2013 Former President of The Northwestern Mutual Life Insurance Company ü Patrick Sinks 61 2014 CEO of MGIC Investment Corp. • Executive (C) Mark M. Zandi 59 2010 ü • Risk Management ª = Audit Committee Financial Expert * = Management Development, Nominating and Governance Committee C = Committee Chair (1) As of June 1, 2018 Contentsour CEO's 2017 total direct compensation is at-risk, performance-based compensation.
We changed our 2017 equity awards to: ° Establish three-year cliff vesting for all equity awards to our CEO and Executive Vice Presidents, ° Reduce the number of underlying shares due to a sustained increase in our stock price, and ° Tie vesting of all of the equity awards to our CEO and Executive Vice Presidents to achievement of a performance goal relating to increased adjusted book value per share. • • 250270 East Kilbourn Avenue9:2:00 a.m.p.m., Thursday, April 28, 2016, in the Bradley Pavilion of the Marcus Center for the Performing Arts, 929 North Water Street,Wednesday, July 25, 2018, at 270 East Kilbourn Avenue, Milwaukee, Wisconsin, and at any postponement or adjournment of the meeting. In this Proxy Statement we sometimes refer to MGIC Investment Corporation as "the“the Company," "we"” “we” or "us."“us.” This Proxy Statement and the enclosed form of proxy are being mailed to shareholders beginning on March 28, 2016.June 18, 2018. Our Annual Report to Shareholders for the year ended December 31, 2015,2017, which follows the Proxy Statement in this booklet, is a separate report and is not part of this Proxy Statement. If you have any questions about attending our Annual Meeting, you can call our Investor Relations personnel at (414) 347-6480.2016.2018. In addition, management will report on our performance during the last year and, after the meeting, respond to questions from shareholders.March 4, 2016,on June 1, 2018, the record date for the meeting, are entitled to receive notice of and to participate in the Annual Meeting. For each share of Common Stock thatfor which you heldwere shareholder of record on that date, you are entitled to one vote on each matter considered at the meeting. On the record date, 340,636,237367,461,315 shares of Common Stock were outstanding and entitled to vote.willmay be asked to show some form of identification (such as your driving driver'sMGIC Investment Corporation -2016 Proxy Statement| 5:: If you are a shareholder of record, meaning your shares are registered directly in your name with Wells Fargo Bank Minnesota, N.A.,Equiniti Trust Company, our stock transfer agent, you may vote your shares in one of three ways:··By InternetOnline — ShareholdersYou may submit proxies over the Internetonline by following the instructions on the proxy card.·"“Street Name"Name” Holders:: If you hold your shares in "street“street name,"” meaning your shares are held in a stock brokerage account or by a bank or other nominee, your broker, bank or nominee has enclosed or provided a voting instruction form for you to use to direct the broker, bank or nominee how to vote your shares. Certain of these institutions offer telephone and Internetonline voting.:: If you hold shares as a participant in our Profit Sharing and Savings Plan, you may instruct the plan trustee how to vote those shares in any one of three ways:··By InternetOnline — You may submit a proxy over the Internetonline by following the instructions on the proxy card.· by advising our corporate Secretary in writing, by granting a new proxy with a later date, or by voting in person at the meeting. If your shares are held in street name by a broker, bank or nominee, or in our Profit Sharing and Savings Plan, you must follow the instructions of the broker, bank, nominee or plan trustee on how to change your vote.340,636,237367,461,315 shares of Common Stock outstanding onentitled to vote as of the record date are represented, in person or by proxy, at the meeting. Votes cast by proxy or in person at the meeting will be counted by Wells Fargo Bank Minnesota, N.A.,Equiniti Trust Company, which has been appointed by our Board to act as inspector of election for the meeting. All shares voted by proxy are counted as present for purposes of establishing a quorum, including those that abstain or as to which the proxies contain "broker non-votes"“broker non-votes” as to one or more items."non-votes"non-votes” occur when a broker or other nominee does not vote on a particular matter because the broker or other nominee does not have authority to vote without instructions from the beneficial owner of the shares and has not6 | MGIC Investment Corporation -2016 Proxy Statement20162018 Annual Meeting, nominees will only have discretionary authority to vote shares on the ratification of the appointment of the independent registered public accounting firm without instructions from the beneficial owner.Board'sBoard’s recommendations?20162018 (Item 4).year'syear’s Annual Meeting.SEC'sSEC’s rules. Proposals intended for inclusion in next year'syear’s proxy materials must be received by our Secretary no later than November 28, 2016.("Bylaws"(“Bylaws”), a shareholder who wants to bring business before the Annual Meeting that has not been included in the proxy materials for the meeting, or who wants to nominate directors at the meeting, must be eligible to vote at the meeting and give written notice of the proposal to our corporate Secretary in accordance with the procedures contained in our Bylaws. Our Bylaws require that shareholders give notice to our Secretary at least 45 and not more than 70 days before the first anniversary of the date set forth in our Proxy Statement for the prior Annual Meeting as the date on which we first mailed such Proxy Statement to shareholders. For the 20172019 Annual Meeting, the notice must be received by the Secretary no later than February 11, 2017,May 4, 2019, and no earlier than January 17, 2017.April 9, 2019. For director nominations, the notice must comply with our Bylaws and provide the information required to be included in the Proxy Statement for individuals nominated by our Board. For any other proposals, the notice must describe the proposal and why it should be approved, identify any material interest of the shareholder in the matter, and include other information required by our Bylaws.$13,500,$14,000, plus expenses such as charges by brokers, banks and other nominees to forward proxy materials to the beneficial owners of our Common Stock.MGIC Investment Corporation -2016 Proxy Statement| 7identifiesshows the amount of our Common Stock held by persons who were beneficial owners of more than 5% of our Common Stockshares as of December 31, 2015,2017, based on information filed with the SEC, unless more recent information filed withSEC. The "Percent of Class" reflects the SEC is available.percentage of our Common Stock outstanding as of June 1, 2018, represented by such shares.Name Shares Beneficially Owned Percent of Class
100 Vanguard Boulevard, Malvern, PA 19355
30,787,000 9.1 %
55 East 52nd Street, New York, NY 10022 18,584,985 5.5 % Name Shares Beneficially Owned Percent of Class
100 Vanguard Boulevard, Malvern, PA 19355 35,992,659 9.8%
280 Congress Street, Boston, MA 02210 27,855,477 7.6%
55 East 52nd Street, New York, NY 10055 24,706,723 6.7% (1) The Vanguard Group, Inc. reported ownership as of December 31, 2017, on behalf of itself and certain subsidiaries. It reported that it had sole dispositive power for 35,576,264 shares and shared dispositive power for 416,395 shares. It further reported that it had sole voting power for 407,914 shares and shared voting power for 39,472 shares. (2) Wellington Management Group LLP reported ownership as of December 31, 2017, on behalf of itself and several subsidiaries. It reported that it had sole dispositive power for no shares and shared dispositive power for 27,855,477 shares. It further reported that it had sole voting power for no shares and shared voting power for 20,748,603 shares. (3) BlackRock, Inc. reported ownership as of December 31, 2017, on behalf of itself and several subsidiaries. It reported that it had sole dispositive power for 24,706,723 shares and shared dispositive power for no shares. It further reported that it had sole voting power for 23,926,557 shares and shared voting power for no shares. (1)The Vanguard Group, Inc. reported ownership as of December 31, 2015, on behalf of itself and certain subsidiaries. It reported that it had sole dispositive power for 30,219,316 shares and shared dispositive power for 567,684 shares. It further reported that it had sole voting power for 572,368 shares and shared voting power for 15,600 shares.(2)BlackRock, Inc. reported ownership as of December 31, 2015, on behalf of itself and several subsidiaries. It reported that it had sole dispositive power for 18,584,985 shares and shared dispositive power for no shares. It further reported that it had sole voting power for 17,839,494 shares and shared voting power for no shares.named executive officers,NEOs, and by all directors and executive officers as a group, as of March 4, 2016.June 1, 2018. Unless otherwise noted, the partiespersons listed in the table have sole voting and investment power over their shares.Name of Beneficial Owner Common
Stock
Owned
Directly(1) Common
Stock
Owned
Indirectly(2) Restricted
Stock and
Common
Stock
Underlying
RSUs(3) Total
Number of
Shares
Beneficially
Owned Director
Deferred
Stock Units /
Additional
Underlying Units Total Shares
Beneficially
Owned Plus
Underlying Units Total Number of Shares Beneficially Owned Director Deferred Stock Units / Additional Underlying Units Total Shares Beneficially
Owned Plus Underlying Units - 20,000 - 20,000 17,668 (4) 37,668 — 20,000 — 20,000 26,325 5,000 - - 5,000 40,666 (4) 45,666 5,000 — — 5,000 34,323 10,000 - - 10,000 42,741 (4) 52,741 10,000 — — 10,000 59,066 (6) 1,457,313 52,696 - 1,510,009 135,082 (5) 1,645,091 1,177,005 11,504 — 1,188,509 1,194,834 20,000 - - 20,000 58,347 (4) 78,347 20,000 — — 20,000 84,672 1,146 - 31,552 32,698 47,804 (4) 80,502 1,146 — 31,552 32,698 69,159 19,939 - 3,050 22,989 19,049 (4) 42,038 19,939 — 3,050 22,989 30,695 182 - 16,217 16,399 72,075 (4) 88,474 Melissa B. Lora — — — — 6,325 - - - - 60,698 (4) 60,698 — — — — 102,677 - - - - 42,225 (4) 42,225 — — — — 47,833 827,695 11,733 - 839,428 657,231 (5) 1,496,659 1,103,080 10,610 — 1,113,690 1,846,264 148,953 957 - 149,910 240,288 (5) 390,198 250,170 865 — 251,035 502,203 103,020 - - 103,020 79,291 (5) 182,311 9,226 71,499 - 80,725 76,587 (5) 157,312 — 115,102 115,102 340,962 539,661 - - 539,661 240,288 (5) 779,949 640,878 — — 640,878 892,046 3,147,135 156,885 50,819 3,354,839 (7) 1,980,040 5,334,879 Stephen C. Mackey 56,617 — 10,000 66,617 317,785 All Directors and Executive Officers as a Group (17 Persons) 3,532,930 160,475 44,602 2,392,193 6,130,200 (1) Includes shares for which investment power is shared as follows: Mr. Mackey — 56,617; and all directors and executive officers as a group — 199,847. (2) Includes shares held in our Profit Sharing and Savings Plan as follows: Mr. Sinks — 10,610; Mr. Mattke — 865; Mr. Hughes — 610; and all executive officers as a group — 14,479. Also includes shares held by a family trust affiliated with: Mr. Arrigoni — 20,000; Mr. Culver — 11,504; Mr. Hughes — 114,492; and all directors and executive officers as a group — 145,996. (3) Includes: (1)Includes shares for which investment power is shared as follows: Mr. Chi — 103,020; all directors and executive officers as a group — 108,020.(2)Includes shares held in our Profit Sharing and Savings Plan as follows: Mr. Culver — 12,696; Mr. Sinks — 11,733; Mr. Mattke — 957; Mr. Hughes — 674; and all executive officers as a group — 26,060. Also includes shares held by a family trust affiliated with: Mr. Arrigoni — 20,000; Mr. Culver — 40,000; Mr. Hughes — 70,825; and all directors and executive officers as a group — 130,825.(3)Includes:·restricted stock units ("RSUs") whichRSUs that were issued to our non-management directors pursuant to our former RSU award program (See "Compensation“Compensation of Directors — Former RSU Award Program"Program” in our 2015 Proxy Statement filed with8 | MGIC Investment Corporation -2016 Proxy Statement("(“our 2015 Proxy Statement"Statement”)) and could be settled in shares of Common Stock within 60 days of the record date as follows: Mr. Jastrow — 3,050;3,050 and Mr. Lehman — 3,050; and Mr. Nicolaisen — 1,700.3,050. Directors have neither voting nor investment power over the shares underlying any of these units.·Shareswhichthat are held by Mr. Jastrow under the Deposit Share Program for Non-Employee Directors under our 2002 Stock Incentive Plan (See "Compensation“Compensation of Directors — Former Deposit Share Program"Program” in our 2015 Proxy Statement) and could be settled in shares of Common Stock within 60 days of the record date as follows:date. Mr. Jastrow — 19,769 and Mr. Nicolaisen — 14,517. Directors havehas neither voting nor investment power over the shares underlying any of these units.··"Compensation“Compensation of Directors — Former Restricted Stock Plan"Plan” in our 2015 Proxy Statement). Mr. Jastrow has sole voting power and no investment power over these shares.(4) Represents share equivalents held under our Deferred Compensation Plan for Non-Employee Directors (See “Compensation of Directors — Deferred Compensation Plan and Annual Grant of Share Units” below) over which the directors have neither voting nor investment power. For all directors and executive officers as a group — 356,713. (5) Represents shares underlying stock-settled RSUs that cannot be settled in Common Stock within 60 days of the record date. For all directors and executive officers as a group — 2,035,480. (6) As of June 1, 2018, no individual director or executive officer beneficially owned more than 1% of the Common Stock outstanding, and all directors and executive officers as a group beneficially owned 1.0% of the shares of Common Stock outstanding. (4)Represents share equivalents held under our Deferred Compensation Plan for Non-Employee Directors (See "Compensation of Directors — Deferred Compensation Plan and Annual Grant of Share Units" below) over which the directors have neither voting nor investment power.(5)Includes shares underlying RSUs that cannot be settled in Common Stock within 60 days of the record date: Mr. Culver — 117,414; Mr. Sinks — 657,231; Mr. Mattke — 240,288; Mr. Chi — 79,291; Mr. Hughes — 76,587; Mr. Lane — 240,288; and all directors and executive officers as a group — 1,561,099;. For Mr. Culver, also includes 17,668 share equivalents held under our Deferred Compensation Plan for Non-Employee Directors (See "Compensation of Directors — Deferred Compensation Plan and Annual Grant of Share Units" below) over which he has neither voting nor investment power.(6)Mr. Culver served as our Chief Executive Officer until his retirement on February 28, 2015. Mr.��Culver continues to be a director of the Company.(7)Individual directors and executive officers, as well as directors and executive officers as a group, beneficially own less than 1% of the shares of Common Stock outstanding, as of March 4, 2016.Board'sBoard’s composition, leadership, meeting process, director independence, Board membership criteria, committee structure, and functions, succession planning and director compensation. Among other things, the Board meets in executive session outside the presence of any member of our management after at least two Board meetings at which directors are present in person and at any additional times determined by the Board or the Lead Director. Mr. Jastrow presides at these sessions and has served as the Board'sBoard’s Lead Director since the position was created in October 2009. See "Board Leadership"“ — Board Leadership” for information about the Lead Director'sDirector’s responsibilities and authority. The Corporate Governance Guidelines provide that a director shall not be nominated by the Board for re-electionre‑election if at the date of the Annual Meeting of Shareholders, the director is age 74 or more. The Corporate Governance Guidelines also provide that a director who retires from his principal employment or joins a new employer shall offer to resign from the Board. Unless the Board determines that a Chief Executive Officer who is Chairman of the Board should continue as Chairman of the Board after his or her tenure as Chief Executive Officer, a director who is an officer of the Company or a subsidiary and leaves the Company shall resign from the Board. In July 2014, the Board determined that Mr. Culver should become non-executive Chairman of the Board upon retirement from his position as Chief Executive Officer effective February 28,in 2015.MGIC Investment Corporation -2016 Proxy Statement| 9"Other“Other Matters —– Related Person Transactions"Transactions” below. These descriptions are subject to the actual terms of the Code."Investor Information; Corporate Governance"“Leadership & Governance; Documents” links. Written copies of these documents are available to any shareholder who submits a written request to our Secretary. We intend to disclose on our website any waivers from, or amendments to, our Code of Business Conduct that are subject to disclosure under applicable rules and regulations.("NYSE"(“NYSE”), except that our disqualification for board interlocks is more stringent than under the NYSE rules. Also, for a director to be independent under the Guidelines, the director may not have any material relationship with us. For purposes of determining whether a disqualifying or material relationship exists, we consider relationships with MGIC Investment Corporation and its consolidated subsidiaries. current directors except for Mr. Culver, our former CEO, and Mr. Sinks, our current CEO, are independent under the Guidelines and the NYSE rules. The Board made its independence determinations by considering whether any disqualifying relationships existed during the periods specified under the Guidelines and the NYSE rules. To determine that there were no material relationships, the Board applied categorical standards that it had adopted and incorporated into our Corporate Governance Guidelines. All independent directors met these standards. Under these standards, a director is not independent if payments under transactions between us and a company of which the director is an executive officer or 10% or greater owner exceeded the greater of $1 million or 1% of the other company's company’s···director'sdirector’s immediate family received compensation from us.Moody'sMoody’s Analytics (of which Dr. Zandi is an executive officer) for research and subscription services for Moody'sMoody’s Economy.com and related publications, and payments to Moody's Investor ServicesMoody’s Investors Service for credit rating services. These transactions were below the quantitative threshold contained in our Corporate Governance Guidelines and were entered into in the ordinary course of business by us, Moody'sMoody’s Analytics and Moody's Investor Services.Currently, discussesdiscussion includes strategic and business issues. The Board believes that this approach makes sense at this time because Mr. Culver, as our former CEO, is intimately10 | MGIC Investment Corporation -2016 Proxy StatementFebruary 28, 2015.Director'sDirector’s responsibilities and authority include:····Board'sBoard’s informational needs, including proposing topics for Board meeting agendas; and·Board'sBoard’s leadership.the members of the Board, the non-management members of the Board as a group or the Lead Director, by sending a written communication to our Secretary, addressed to: MGIC Investment Corporation, Secretary, P.O. Box 488, Milwaukee, WI 53201. The Secretary will pass along any such communication, other than a solicitation for a product or service, to the Lead Director.2015.2017. Each director serving in 2017 attended at least 75% of the meetings of the Board and committees of the Board on which he or she served during 2015.served. The Annual Meeting of Shareholders is scheduled in conjunction with a Board meeting and, as a result, directors are expected to attend the Annual Meeting. All of our directors with the exception of one, who had an unavoidable conflict,serving in 2017 attended the 20152017 Annual Meeting of Shareholders. That director attended, telephonically, the Board meeting held the same day.Audit,Audit; Management Development, Nominating and Governance,Governance; Risk Management and Securities Investment Committees consists entirely of independent directors and the charters for those committees are available on our website (http://mtg.mgic.com) under the "Investor Information; Corporate Governance"“Leadership & Governance; Documents” links. Written copies of these charters are available to any shareholder who submits a written request to our Secretary. The functions of the Executive Committee are established under our Bylaws and are described below.MGIC Investment Corporation -2016 Proxy Statement| 11Committee20152017 committee meetings are identifiedset forth below. Audit Executive Management
Development,
Nominating and
Governance Risk
Management Securities
Investment · · · · · · · · C · C C · · C · · C · 14 0 5 5 4 C = Chairman Audit Executive Management Development, Nominating and Governance Risk Management Securities Investment Daniel A. Arrigoni ● ● Cassandra C. Carr ● ● C. Edward Chaplin ● ● Curt S. Culver ● Timothy A. Holt ● C Kenneth M. Jastrow, II ● C Michael E. Lehman C ● Melissa B. Lora ● ● Gary A. Poliner ● C ● Patrick Sinks C Mark M. Zandi ● 2017 Meetings 15 0 7 5 6 C = Committee Chair Corporation'sCorporation’s financial statements,statements; the effectiveness of its system of internal controls,controls; the qualifications, independence and performance of its independent accountants,accountants; the performance of its internal audit function,function; and its compliance with legal, regulatory and regulatorynon-financial GSE requirements. The Committee supports the Board'sBoard’s role in overseeing the risks facing the Company, as described in more detail below under "Board“Board Oversight of Risk.""audit“audit committee financial experts"experts” as defined in SEC rules.CEO'sCEO’s annual compensation and approving compensation for our other senior executives. The Committee prepares thenamed executive officers,NEOs, the amount, if any, that our named executive officersNEOs realized in at least the previous five years pursuant to sales of shares awarded under equity grants; the total amount of stock and RSUs held by each named executive officerNEO (RSUs are sometimes referred to in this Proxy Statement as "restricted equity"“restricted equity”); and the other compensation information disclosed in this Proxy Statement under the SEC'sSEC’s rules. The Committee supports the Board'sBoard’s role in overseeing the risks facing the Company, as described in more detail below under "Board“Board Oversight of Risk.""Compensation Consultant"“Compensation Consultant”), a nationally recognized executive compensation consulting firm, to advise it. The Committee retains the Compensation Consultant to, among12 | MGIC Investment Corporation -2016 Proxy StatementConsultant'sConsultant’s services during 20152017 is described under "Role“Role of the Compensation Consultant"Consultant” in our Compensation Discussion and Analysis below. In providing its services to the Committee, the Compensation Consultant regularly interacts with our senior management. The Compensation Consultant does not provide any other services to us. The Committee has assessed the independence of the Compensation Consultant pursuant to SEC and NYSE rules and concluded that its work for the Committee does not raise any conflict of interest.Board'sBoard’s self-evaluation process. Finally, the Committee identifies new director candidates through recommendations from Committee members, other Board members and our executive officers, and will consider candidates who are recommended by shareholders.candidate'scandidate’s consent to being recommended as a candidate. If the candidate is to be considered for nomination at the next annual shareholders meeting, the submission must be received by our corporate Secretary in writing no later than December 1 of the year preceding the meeting. Information on shareholder nominations is provided under "About“About the Meeting and Proxy Materials"Materials” in response to the question"“What are the deadlines for submission of shareholder proposals for the next Annual Meeting?"”"Director Selection"“Director Selection” as well as other factors the Committee deems relevant, through background reviews, input from other members of the Board and our executive officers, and personal interviews with the candidates attended by at least the Committee Chairman.Chair. The Committee will evaluate any director candidates recommended by shareholders using the same process and criteria that apply to candidates from other sources.is responsible forassists the Board in overseeing management's operation of our mortgage insurance business, including reviewing and evaluating with management the Company's insurance programs,enterprise risk management framework, including the Company's risk appetite on an enterprise-wide basis, and in overseeing certain key risks, including mortgage credit risk. In connection with its oversight of mortgage credit risk, the Committee monitors the performance of the Company's insured books of business and the principal factors affecting their performance; it discusses the Company's products, including premium rates, returns, underwriting guidelines and quality controls, and external reinsurance programs,programs; and changes in market conditionsit reviews the insurance operating environment, including the state of local and regional housing markets, competitive forces affecting our business.the Company, the Company’s relationships with residential mortgage lenders and mortgage investors, regulatory and GSE capital requirements, and lender, GSE and government programs. The Risk ManagementBoard'sBoard’s role in overseeing theother risks facing the Company, as described in more detail below under "Board“Board Oversight of Risk."ourthe Company’s employee benefit plans for whichby those persons (employees of the plan document does not assign responsibility to other persons.Company or external asset managers) who are managing such assets on a day-to-day basis. The Committee also makes recommendations to the Board with respect to our retirement benefit plans that are available to employees generally, capital management (other than external reinsurance), including dividend policy, repurchase of common stock and debt, and external funding. Finally, the Committee supports the Board'sBoard’s role in overseeing the risks facing the Company, as described in more detail below under "Board“Board Oversight of Risk."MGIC Investment Corporation -2016 Proxy Statement| 13·risksincentives and rewardsrisks associated with our compensation philosophy and programs.programs, and oversees operational risks related to human resources.·oversees risksassists the Board in overseeing the Company's enterprise risk management framework, including the Company's risk appetite on an enterprise-wide basis, and in overseeing the following key Company risks: Mortgage Credit; Capital Risk related to our mortgage insurance business.the required amount of capital; non-Investment Portfolio Counterparty Risk; Model Risk; Operational Risks related to Underwriting, Servicing, Claims, Risk and Sales; and Macroeconomic Business Risk.·management.management, which includes Market Risk; Investment Portfolio Counterparty Risk; Capital Risk related to our capital structure, access to capital and credit rating; and Liquidity Risk.·"Board Leadership"“Board Leadership” above, supports the risk oversight function of the Board. Our former CEO serves as Chairman of the Board and has a wealth of experience with the risks of our Company and industry. Our current President and CEO is a director who keeps the Board informed about the risks we face. In addition, independent directors chair the various committees involved with risk oversight and there is open communication between senior management and directors.Board'sBoard’s membership criteria. Accordingly, the Board and the Management Development, Nominating and Governance Committee consider the qualifications of directors and director candidates individually and in the broader context of the Board'sBoard’s overall composition and our current and future needs.14 | MGIC Investment Corporation -2016 Proxy StatementCommittee'sCommittee’s and the Board'sBoard’s evaluation of the Board'sBoard’s composition enables the Board to consider the skills and experience it seeks in the Board as a whole, and in individual directors, as our needs evolve and change over time and to assess the effectiveness of the Board'sBoard’s efforts at pursuing diversity. In identifying director candidates from time to time, the Management Development, Nominating and Governance Committee may establish specific skills and experience that it believes we should seek in order to constitute a balanced and effective board. currently a director of the Company who, with the exception of Ms. Lora, was previously elected by the shareholders. Historically, the Board has consisted of 11 directors. In October 2016, an independent director left the Board to reduce his outside time commitments, which reduced the number of directors to 10. Ms. Lora was brought to the attention of the Board by an independent director. In addition to her qualifications discussed in her biography below, she further enhances the Board's gender diversity. In evaluating incumbent directors for renomination to the Board, the Management Development, Nominating and Governance Committee has considered a variety of factors. These include the Board membership criteria described under "Director Selection"“Director Selection” above and past performance on the Board based on any feedback from other Board members.whoall of whom are standing for election, appears below. The biographical information is as of March 15, 2016,June 1, 2018, and for each director includes a discussion about the skills and qualifications that the Board has determined supportviews as supporting the director'sdirector’s continued service on the Board.For One-Year Term Ending 2017
Age:67 65Committees:Audit Committee; Risk Management CommitteeJuly 2013. Prior to his retirement, Mr. Arrigoni also served as an Executive Vice President of U.S. Bank, N.A. Mr. Arrigoni led the mortgage company for U.S. Bank and its predecessor companies since January 1996. Mr. Arrigoni has over 40 years of experience in the home mortgage and banking industries.MGIC Investment Corporation -2016 Proxy Statement| 15
Age:73 71Committees:Management, Development, Nominating & Governance Committee; Risk Management Committee currently a consultant. She was Global Vice Chair of Talent at Hill+Knowlton Strategies before leaving in 2012, and spent nine years as a Senior Advisor for Public Strategies, Inc., both of which firms provide public relations services. Prior to joining Public Strategies, Ms. Carr held various senior-level positions, with SBC Communications, Inc., which during her tenure became one of the world's largest telecommunications companies, including Senior Executive Vice President – External Affairs, Senior Vice President – Human Resources, and Senior Vice President – Finance and Treasurer.Treasurer, with SBC Communications, Inc., which during her tenure became one of the world’s largest telecommunications companies. 
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Committees: Committees:Risk Management Committee; Securities Investment Committeehas beenwas President and Chief Financial Officer at MBIA Inc., a provider of financial guarantee insurance and the largest municipal bond-only insurer, since 2008. In Marchfrom 2008 until 2016, Mr. Chaplin relinquished that position and will remainremained with MBIA as an Executive Vice President until his January 1, 2017.2017 retirement. He served as a member of MBIA'sMBIA’s Board of Directors from 2003 until 2006, when he left to become Chief Financial Officer of that company. Prior to joining MBIA, Mr. Chaplin was Senior Vice President and Treasurer of Prudential Financial Inc., a firm he joined in 1983 and for which he held various senior management positions, including Regional Vice President of Prudential Mortgage Capital Company. Mr. Chaplin also serves on the Board of Brighthouse Financial, Inc., a provider of life insurance and annuity products in the U.S.
6366
Committees: Committees:Executive CommitteeJanuary 2000 and was the Chief Executive Officer of Mortgage Guaranty Insurance Corporation ("MGIC"(“MGIC”) from January 1999, in both cases until his retirement, and he held senior executive positions with us and MGIC for more than five years before he became Chief Executive Officer. He is also a director of Wisconsin Energy Corporation and its subsidiary Wisconsin Electric Power Company and Wisconsin Energy Corporation.Company. 16 | MGIC Investment Corporation -2016 Proxy Statement
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65
Committees: Committees:Audit Committee; Securities InvestmentCommittee (Chairman)
(Chair)served as a consultant to Aetna during 2008 and 2009. Mr. Holt also serves as a director of Virtus Investment Partners, Inc. andFrom January 2014 to February 2017, he served as a director of StanCorp Financial Group, Inc. (which, which was a publicpublicly-traded insurance products company until it was acquired onin March 7, 2016).2016.
68
71(Chairman)(Chair); Executive Committee currently serves as our Lead Director. He is a corporate director and private investor. During 2000 - 2007,2007-2015, he served as a non-executive Chairman of the Board of Forestar Group Inc., which engaged in various real estate and natural resource businesses. During 2000-2007, Mr. Jastrow served as Chairman and Chief Executive Officer of Temple-Inland Inc., a paper and forest products company, which during Mr. Jastrow'sJastrow’s tenure also had interests in real estate and financial services. Mr. Jastrow is also a director of KB Home and Genesis Energy, LLC, the general partner of Genesis Energy, LP, a publicly-traded master limited partnership. He served as non-executive Chairman of the Board of Forestar Group Inc., which is engaged in various real estate and natural resource businesses, from 2007 until September 2015, and was a director of that company through the end of 2015.operations,operations; experience in the real estate, mortgage banking and financial services industries,industries; and knowledge of corporate governance matters gained through his service as a non-executive chairman and on public company boards.MGIC Investment Corporation -2016 Proxy Statement| 17
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Committees: Committees:Audit Committee (Chairman)
(Chair); Management, Development, Nominating and Governance Committeeis currently the interim vice chancellor for finance and administration forhas served the University of Wisconsin — Madison, a role he assumed in various capacities since March 2016.2016, currently as Interim Vice Provost for Information Technology and Chief Information Officer (in both cases, until August 1, 2018) and Special Advisor to the Chancellor, and previously as Interim Vice Chancellor for Finance and Administration. He was the interimInterim Chief Financial Officer at Ciber Inc., a global information technology company from September 2013 until February 2014. He was(2013-2014); Chief Financial Officer of Arista Networks, a cloud networking firm from September 2012 through July 2013,(2012-2013); and Chief Financial Officer of Palo Alto Networks, a network security firm from April 2010 until February 2012. Prior to that,(2010-2012). Earlier in his career, he was the Executive Vice President and Chief Financial Officer of Sun Microsystems, Inc., a provider of computer systems and professional support services, from February 2006 to January 2010, when Sun Microsystems, Inc. was acquired by Oracle Corporation. From July 2000 until his initial retirement in September 2002, he was Executive Vice President of Sun Microsystems; he was its Chief Financial Officer from February 1994 to July 2002, and held senior executive positions with Sun Microsystems for more than five years before then.services. During the past five years, Mr. Lehman also served as a director of Solera Holdings, Inc., until it was acquired by a private company.company,company; skills in addressing the range of financial issues facing a large company with complex operations,operations; senior executive and operational experience,experience; and leadership skills.
DONALD T. NICOLAISEN 2006
201871
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Committees: Committees: Management Development, Nominating & GovernanceAudit Committee; Risk Management Committee (Chairman); Executive CommitteeDonald T. Nicolaisen was the Chief AccountantUnited States Securitiesworld’s largest restaurant companies. Ms. Lora will be retiring from Taco Bell Corp. in the summer of 2018. Ms. Lora served in various roles at Taco Bell Corp., including Global Chief Financial and Exchange Commission from September 2003 to November 2005, when he retired from full time employment. Prior to joining the SEC, he was a Senior Partner at PricewaterhouseCoopers LLP, an accounting firm that he joined in 1967. He isDevelopment Officer (2012-2013), Chief Financial and Development Officer (2006-2012) and Chief Financial Officer (2001-2006). Ms. Lora also a director of Verizon Communications Inc., Morgan Stanley and Zurich Insurance Group.serves as Lead Independent Director for KB Home. Mr. Nicolaisenaccounting expertise acquired from his 36 years of service with a major public accounting firm and his tenure as Chief Accountant at the SEC, as well as an understanding of the range of issues facing large financial services companies gained through his service on the boards of public companies operating in the insurance and financial services industries.marketing matters.18 | MGIC Investment Corporation -2016 Proxy Statement
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Committees: Committees:Risk Management Committee (Chair);Audit Committee; Securities Investment Committee Poliner is currently a consultant. Mr. Poliner was President of The Northwestern Mutual Life Insurance Company ("(“Northwestern Mutual"Mutual”), the nation'snation’s largest direct provider of individual life insurance, and a member of its Board of Trustees, until his retirement from that company in June 2013, after more than 35 years of service. He was named President of Northwestern Mutual in 2010. Mr. Poliner also held various other senior-level positions at Northwestern Mutual, including Chief Financial Officer (2001-2008) and Chief Risk Officer (2009-2012). During a portion of 2016, Mr. Poliner served as a consultant for the Janus Funds, and since June 2016 he has served as an Independent Trustee of the Janus Funds (58 funds).
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Committees: Committees:Executive Committee (Chairman)
(Chair) March 1, 2015. He has served as our President and Chief Operating Officer since 2006 and held senior executive positions with MGIC for more than five years before then.operations,operations; a long-term perspective on our strategystrategy; and the ability to lead our Company as the mortgage finance system and the mortgage insurance industry evolve.
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Committees: Committees:Risk Management CommitteeMoody'sMoody’s Analytics, Inc., where he directs economic research. Moody'sMoody’s Analytics is a leading provider of economic research, data and analytical tools. It is a subsidiary of Moody'sMoody’s Corporation that is separately managed from Moody's Investor Services,Moody’s Investors Service, the rating agency subsidiary of Moody'sMoody’s Corporation. Dr. Zandi is a trusted adviser to policymakers and an influential source of economic analysis for businesses, journalists and the public, and he frequently testifies before Congress on economic matters.MGIC Investment Corporation -2016 Proxy Statement| 19—– ELECTION OF DIRECTORSdirectors at this Annual Meeting.directors. The Board, upon the recommendation of the Management Development, Nominating and Governance Committee, (with Ms. Carr and Messrs. Jastrow and Nicolaisen abstaining on their own nominations), has nominated Daniel A. Arrigoni, Cassandra C. Carr, C. Edward Chaplin, Curt S. Culver, Timothy A. Holt, Kenneth M. Jastrow, II, Michael E. Lehman, Donald T. Nicolaisen,Melissa B. Lora, Gary A. Poliner, Patrick Sinks and Mark M. Zandi for re-election to the Board to serve for one year, until our 20172019 Annual Meeting of Shareholders. If any nominee is not available for election, proxies will be voted for another person nominated by the Board or the size of the Board will be reduced."majority vote"“majority vote” at the meeting to be elected a director. A "majority vote"“majority vote” means that when there is a quorum present, more than 50% of the votes cast in the election of the director are cast "for"“for” the director, with votes cast being equal to the total of the votes "for"“for” the election of the director plus the votes "withheld"“withheld” from the election of the director. Therefore, under our Articles of Incorporation, a "withheld"“withheld” vote is effectively a vote "against"“against” a nominee. Broker non-votes will be disregarded in the calculation of a "majority“majority vote."” Any incumbent director who does not receive a majority vote (but whose term as a director nevertheless would continue under Wisconsin law until his successor is elected) is required to send our Board a resignation. The effectiveness of any such resignation is contingent upon Board acceptance. The Board will accept or reject a resignation in its discretion after receiving a recommendation made by our Management Development, Nominating and Governance Committee and will promptly publicly disclose its decision regarding the director'sdirector’s resignation (including the reason(s) for rejecting the resignation, if applicable).YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OFTHE ELEVEN NOMINEES. SIGNED PROXY CARDS AND VOTING INSTRUCTION FORMSWILL BE VOTED FOR THE NOMINEES UNLESS A SHAREHOLDER GIVES OTHERINSTRUCTIONS ON THE PROXY CARD OR VOTING INSTRUCTION FORM.YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE ELEVEN NOMINEES. SIGNED PROXY CARDS AND VOTING INSTRUCTION FORMS WILL BE VOTED FOR THE NOMINEES UNLESS A SHAREHOLDER GIVES OTHER INSTRUCTIONS ON THE PROXY CARD OR VOTING INSTRUCTION FORM. non-managementnon-employee directors is reviewed periodically by the Management Development, Nominating and Governance Committee. Mr. Sinks is our CEO and receives no additional compensation for service as a director, and he is not eligible to participate in any of the following programs or plans.In 2014, the Management Development, Nominating and Governance Committee engaged its independent compensation consultant, Frederic W. Cook & Co., to review the existing director compensation program, which had last been evaluated in 2009. Based on that review, the Committee recommended to the Board, and the full Board approved, changes to the compensation program for non-employee directors which became effective on January 1, 2015. The changes to this program were intended to bring the compensation of the non-employee directors in line with market practice.20 | MGIC Investment Corporation -2016 Proxy Statement2014 and the revised compensation program that became effective January 1, 2015:2017.Compensation Component 2014 Compensation Program2015 Compensation Program Compensationn/a $250,000, Annual Retainer – Non-Chairman Directors$100,000, which may be elected to be deferred and either converted into cash-settled share units or credited to an interest-bearing account.Annual Retainer – Non-Chairman Directors an interest-bearing account.Annual – Equity Retainer $100,000$100,000 in cash-settled restricted stock units that vest after approximately one year and for which settlement may be deferred at the option of the director. $100,000 in cash-settled restricted stock unitsRSUs that vest immediately but are not settled for approximately one year. Such settlement may be deferred at the option of the director. No Change $20,000$25,000 for the Audit Committee $25,000 for the Audit Committee $10,000
$25,000 for the Management Development, Nominating and Governance Committee $25,000
$15,000 for the Management Development, Nominating and Governance Committeeother committees $10,000 for all other committees(1) $15,000 for all other committees(1) $5,000 for Audit Committee
$5,000 for other committees(1) $3,000 for Board meetings
$2,000 for Committee meetingsStock Ownership Guidelines Board $3,000 No Change Committee $2,000 No ChangeStock Ownership Guideline (1) Excludes the Executive Committee. Other than the Executive Committee, directors who are members of management do not serve on any committees but may attend committee meetings.(1)Excludes the Executive Committee. Other than the Executive Committee, directors who are members of management do not serve on any committees.(2)(2) After the fifth Board meeting attended, or the fifth committee meeting attended for a particular committee, our non-management directors receive $3,000 for each Board meeting attended, and the committee members receive $2,000 for all committee meetings attended, in each case, on any one day. Meetings of the Board of MGIC (or Committees of its Board) that are not held in conjunction with meetings of the Board of the Company (or Committees of its Board) are counted to determine meeting fees. (3) Each of our non-employee directors satisfies this guideline. attended, or the fifth committeefees were increased by $2,000 and Committee meeting attended for a particular committee, our non-management directors receive $3,000 for each Board meeting attended, and the committee members receive $2,000 for all committee meetings attended on any one day. Meetings of the Board of MGIC (or Committees of its Board) that are not held in conjunction with meetings of the Board of the Company (or Committees of its Board) are counted to determine meeting fees.fees were increased by $1,000.(3)Each of our non-employee Directors satisfies this guideline."Deferred“Deferred Compensation Plan"Plan”), our non-managementnon-employee directors can elect to defer payment of all or part ofdirector'sdirector’s death, disability, termination of service as a director or to another date specified by the director. A director who electedelects to defer retainer or fees in recent years wouldpayments may have his or her deferred compensation bookkeeping account credited quarterly with interest accrued at an annual rate equal to the six-month U.S. Treasury Bill rate determined at the closest preceding January 1 and July 1 of each year. Beginning in 2015 (similar to 2008 and prior years), our non-management directorsyear, or may as an alternative, elect to have the retainer and feespayments deferred during a quarter translated into share units. Each share unit is equal in value to one share of our Common Stock and is ultimately paid only in cash. Such payment will be based on the stock'sstock’s closing price over aMGIC Investment Corporation -2016 Proxy Statement| 21feespayments into share units, dividend equivalents in the form of additional share units are credited to the director'sdirector’s account as of the date of payment of cash dividends on our Common Stock. We have not paid dividends since 2008.Grants made in 2014 and prior years vested at least twelve months after they were awarded. Share units that had not vested when a director left the Board were forfeited, except in the case of the director's death or certain events specified in the Deferred Compensation Plan, such as not standing for re-election due to an age-related retirement policy. The Management Development, Nominating and Governance Committee could waive the forfeiture. Dividend equivalents in the form of additional share units are credited to the director's account as of the date of payment of cash dividends on our Common Stock.2015,2017, each of our non-management directors was granted share units valued at $100,000, which vested immediately and were settled on February 16, 2016,15, 2018, unless the director elected a later settlement date. Effective March 1, 2015, Mr. Culver was granted 9,949 share units valued at $90,836, representing his pro rata share of the annual grant made to each of the Company's non-management directors, based on the time in the settlement period that he served as a non-management director. The directors could elect to receive payment for vested units in up to 10ten annual installments beginning shortly after departure from the Board, or on another date specified by the director that was after February 16, 2016.15, 2018. In all cases, the payment was or will be based on the stock'sstock’s closing price over a relatively brief period in advance of the payment date(s).2015 Dividend equivalents in the form of additional share units are credited to the director’s account as of the date of payment of cash dividends on our Common Stock.2015, other than Mr. Culver. Mr. Culver served as our CEO until February 28, 2015, and during his tenure as CEO, received no compensation for service as a director. The compensation he earned as a non-management director beginning March 1, 2015 is included in the Summary Compensation Table.2017. Mr. Sinks, our CEO, beginning March 1, 2015, was also a director in 20152017 but received no compensation for service as a director.Name Fees Earned or
Paid in Cash
($)(1) Total Stock Awards
($)(2) Total
($) 165,000 100,000 265,000 135,000 100,000 235,000 135,000 100,000 235,000 171,000 100,000 271,000 175,000 (3) 100,000 275,000 (3) 166,000 100,000 266,000 145,000 100,000 245,000 161,000 100,000 261,000 130,000 100,000 230,000 (1)The following directors elected to defer all the fees shown in this column into share units as described under "Compensation of Directors — Non-Management Director Compensation Plan — Deferred Compensation Plan and Annual Grant of Share Units" above: Mr. Chaplin received 13,937 share units; Mr. Holt received 17,681 share units; Mr. Poliner received 16,657 share units; and Dr. Zandi received 13,421 share units.(2)The amount shown in this column for each director represents the grant date fair value of the annual share unit award granted to non-management directors in 2015 under our Deferred Compensation Plan, computed in accordance with FASB Accounting Standard Codification ("ASC") Topic 718. The value of each share unit is equal to the value of our Common Stock on the grant date. See "Compensation of Directors — Deferred Compensation Plan and Annual Grant of Share Units" above for more information about these grants.Name
Paid in Cash
($)(1)
($)(2) Total
($)Daniel A. Arrigoni 165,000 100,000 265,000 Cassandra C. Carr 141,000 100,000 241,000 C. Edward Chaplin 139,000 100,000 239,000 Curt S. Culver 250,000 100,000 350,000 Timothy A. Holt 179,000 100,000 279,000 Kenneth M. Jastrow, II 179,000 100,000 279,000 Michael E. Lehman 181,000 100,000 281,000 Gary A. Poliner 186,000 100,000 286,000 Mark M. Zandi 130,000 100,000 230,000 22 | MGIC Investment Corporation -2016 Proxy Statement(1) The following directors elected to defer certain fees shown in this column into share units as described under " — Non-Employee Director Compensation Plan — Deferred Compensation Plan and Annual Grant of Share Units" above: Mr. Chaplin deferred $136,500 of the fees and received 11,467 share units; and Mr. Poliner deferred $26,000 of the fees and received 2,098 share units.(2) The amount shown in this column for each director represents the grant date fair value of the annual share unit award granted to non-employee directors in 2017 under our Deferred Compensation Plan, computed in accordance with FASB Accounting Standard Codification (“ASC”) Topic 718. The value of each share unit is equal to the value of our Common Stock on the grant date. See “— Non-Employee Director Compensation Plan — Deferred Compensation Plan and Annual Grant of Share Units” above for more information about these grants. The aggregate number ofMr. Jastrow had 2,000 unvested stock awards outstanding as of December 31, 2015, for each director other than Mr. Culver, was as follows: Mr. Jastrow — 2,000,2017, which represents shares held under our 1993 Restricted Stock Plan for Non-Employee Directors. Mr. Culver's unvested stock awards outstanding as of December 31, 2015 are reported in the Outstanding Equity Awards at 2015 Fiscal Year-End Table below.March 4, 2016,June 1, 2018, for each director, is described under "Stock Ownership"“Stock Ownership” above.(3)Includes $25,000 retainer paid for services as Lead Director.MGIC Investment Corporation -2016 Proxy Statement| 23—– ADVISORY VOTE TO APPROVE OUR EXECUTIVE COMPENSATION20112017 Annual Meeting, we held a non-binding, advisory shareholder vote on the frequency of future advisory shareholder votes on the compensation of our named executive officers.NEOs. Our shareholders expressed a preference that advisory shareholder votes on the compensation of our named executive officersNEOs be held on an annual basis and, as previously disclosed, the Company adopted acontinued the policy to hold such votes annually. Accordingly, as required by Section 14A of the Securities Exchange Act of 1934, we are asking shareholders to approve, on an advisory basis, the compensation of our named executive officersNEOs as disclosed under the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis,CD&A, the compensation tables and any related material contained in this Proxy Statement.ofto the Compensation Discussion and Analysis. Management Development, Nominating and Governance Committee will review and consider the voting results when making future decisions regarding compensation of named executive officers.our NEOs. See "Investor“Investor Outreach and Consideration of Last Year's 'SayYear’s ‘Say on Pay' Vote"Pay’ Vote” in the Executive Summary.After this vote, under the Company's policy, the next advisory voteSummary to approve the compensation of our named executive officers is scheduled to occur at our 2017 Annual Meeting. At that meeting, as required by SEC rules, we will again hold a non-binding, advisory shareholder vote on the frequency of future advisory shareholder votes on the compensation of our named executive officers.named executive officersNEOs requires the affirmative vote of a majority of the votes cast on this matter. Abstentions and broker non-votes will not be counted as votes cast.YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THEAPPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS. SIGNEDPROXY CARDS AND VOTING INSTRUCTION FORMS WILL BE VOTED FOR THEAPPROVAL OF THE EXECUTIVE COMPENSATION UNLESS A SHAREHOLDER GIVESOTHER INSTRUCTIONS ON THE PROXY CARD OR VOTING INSTRUCTION FORM.24 | MGIC Investment Corporation -2016 Proxy StatementCompensation Discussion and Analysis ("CD&A"),&A, we describe the materialobjectives and components of our executive compensation program for our currentNEOs, and former chief executive officers,how we make compensation decisions. Please refer to our chief financial officerGlossary of Terms and our three other most highly compensated executive officers (our "named executive officers" or "NEOs"), whose compensation is set forthAcronyms in the 2015 Summary Compensation Table and other compensation tables contained inAppendix A to this Proxy Statement. We also set forth the objectivesStatement for definitions of our executive compensation programcertain capitalized terms.explain how and why the Management Development, Nominating and Governance Committee of our Board (the "Committee") arrived at compensation decisions involving the NEOs for 2015. Mr. Patrick Sinks assumed the position of Chief Executive Officer of our Company on March 1, 2015, following the retirement from that position of Mr. Curt Culver. In this CD&A, when we discuss our CEO's 2015 compensation, we are referring to Mr. Sinks' 2015 compensation, and when we discuss our CEO's 2014 compensation, we are referring to Mr. Culver's 2014 compensation. Mr. Sinks' 2015 compensation generally represents a full year of compensation as CEO, with the exception of his January and February 2015 base salary, which he earned at a lower rate while President and Chief Operating Officer of our Company.Our BusinessThrough our wholly-owned subsidiary Mortgage Guaranty Insurance Corporation ("MGIC") we are a leading provider of mortgage insurance to lenders throughout the United States and to Fannie Mae and Freddie Mac (the "GSEs") to protect against loss from defaults on low down payment residential mortgage loans. In 2015, our net premiums written were $1.0 billion and as of December 31, 2015, our primary insurance in force was $174.5 billion.2015 Business HighlightsDuring 2015, we transitioned from a company recovering from the financial crisis to one achieving profitability and positioned for continued success. Our financial performance in 2015 was strong, reflecting our high quality business mix, industry-leading expense structure, and our capital and liquidity position. We believe our non-financial performance was also strong, reflecting our regulatory and GSE relationships and our recognition in Washington, D.C. as a respected voice in the discussion of reform of the housing finance system. However, our industry remains subject to significant challenges including intense price competition within the industry; enhanced competition from the Federal Housing Administration, the Veterans Administration, and recently established private mortgage insurers; continuing losses from loans insured in 2005-2008; and uncertainty about the role of private capital, including private mortgage insurance, in a post-reform residential housing finance system. Despite the challenging environment, we were able to deliver strong results as shown below.MGIC Investment Corporation -2016 Proxy Statement| 25In 2015, as in 2014, the Company delivered strong results for its shareholders as shown by the financial and operational metrics below. Each of these metrics is included in either the formula used to determine the 2015 bonuses of our NEOs (see "Components of Our Executive Compensation Program – Incentive Programs – Annual Bonus") or the formula used to determine March 2016 vesting of long-term equity awards granted in 2015 (see "Components of Our Executive Compensation Program – Incentive Programs – Long-Term Equity Awards – 2015 Program").• Pre-taxAdjusted net operating income per diluted earnings per share for 2017 was $1.36, up 37% from 2016 ($0.99), with adjusted net operating income of $517.7 million, up 31% from 2016 ($396.3 million).(1)• Aided in part by our new insurance written, our book of flow insurance in force, the principal source of our future revenue, grew by more than 8% in 2017. 
book valuenet operating income and adjusted net operating income per diluted share are non-GAAP measures of performance. For a description of how we calculate these measures and for a reconciliation of these measures to their nearest comparable GAAP measures, see Appendix B(1).Pre-tax return on beginning shareholders' equity
(2) New insurance written(2)
refers to direct new insurance written (before the effects of reinsurance).(1)Adjusted book value per share, for purposes of determining vesting of 80% of our CEO's long-term equity awards granted in 2015, is calculated excluding the effects on shareholders' equity of deferred tax assets and accumulated other comprehensive income.(2)New insurance written refers to direct new insurance written (before the effects of reinsurance).26 | MGIC Investment Corporation -2016 Proxy Statement Financial Performance (continued)Loss•Capital transactions contributed to the decrease in our long-term debt to shareholders' equity ratio, (1)Expense ratio(2)
to 26.5% as of December 31, 2017, from 46.7% as of December 31, 2016.(1)Our loss ratio, for purposes of determining 2015 bonuses and vesting of 20% of our CEO's long-term equity awards granted in 2015, is the ratio of direct (before the effects of reinsurance) losses incurred to direct premiums earned from the particular policy year. Incurred losses exclude the effect of losses incurred on notices of default that have not yet been reported to us, which is commonly known as "IBNR."(2)Our expense ratio, for purposes of determining 2015 bonuses and vesting of 20% of our CEO's long-term equity awards granted in 2015, is the ratio of combined insurance operations underwriting expenses divided by net premiums written. Although the 2015 expense ratio of 14.9% is slightly higher than 2014's ratio of 14.7%, it remains lower than the expense ratio of each of our competitors who disclose this information.MGIC Investment Corporation -2016 Proxy Statement| 27In 2015, the Company also achieved favorable results against the business metrics listed below. Each of these metrics is included in the formula used to determine the 2015 bonuses of our NEOs (see "Components of Our Executive Compensation Program – Incentive Programs – Annual Bonus").Capital Position·Successfully renegotiated•Our NEOs' 2017 bonuses depended on performance against ten performance metrics, with over 40% dependent on the extent to which we achieved EPS and ROE goals. ° As noted above, our reinsurance agreement, which2017 adjusted net operating income per diluted share was 37% more than 2016 ($1.36 vs. $0.99). The Tax Act resulted in it receiving 100% credit undera $133 million charge to earnings in 2017 due to our remeasuring our deferred tax assets to reflect the private mortgage insurer eligibility requirements ("PMIERs")lower rates. Adjusted net operating income excludes the effect of the GSEs (providing $650 million of PMIERs capital)remeasurement, as do the EPS and state insurance regulations, all atROE metrics for our bonus plan. We present comparisons on an attractive after-tax cost of capital.·Met final PMIERsadjusted net operating income per diluted share basis to highlight the increase in our core financial requirements with a cushion of approximately $500 million at December 31, 2015.·Obtained first dividends from regulated insurance subsidiaries since 2008.Succession Planning·After conducting a thorough search process, replaced the retiring Chief Risk Officer and retiring Chief Information Security Officer with highly qualified individuals.·Successfully integrated four new CEO direct reports into the CEO's staff of senior officers. Regulatory/Legislative·Worked with°Our 2017 ROE of 12.5%, as calculated by Bloomberg, was at the industry to influence changes to draft PMIERs that resulted81st percentile of our Benchmarking Peer Group. (Bloomberg calculates ROE by dividing GAAP net income by average equity outstanding). Our 2017 ROE, calculated using our definition of adjusted net operating income for us and each company in lower capital requirements on delinquent loans.·Worked with Congress,our Benchmarking Peer Group, was at the Administration, regulators and trade groups to enhance opportunities92nd percentile.• the broader use of private mortgage insurance within the current GSE framework and to include favorable language in proposed housing finance legislation.Business Mix·Despite competitive pricing pressures, we increased market share while writing high quality new business.·New insurance written is expected to produce mid-teens returns on PMIERs capital, after considering the effects of reinsurance.·More than 80%all of the new insurance written in 2015 was on loans whose borrowers had FICO scores greater than 700. Senior Executive Compensation as a Percentage of Net Income 2014 versus 2015The table below shows the total direct compensation (salary, bonus and equity awards) of the CEO and his direct reports as a percentage of our net income for each of 2014 and 2015. For 2015, net income has been adjusted to eliminate the positive effect of the reversal of the deferred tax valuation allowance. We use this non-GAAP financial measure, "adjusted net income," to allow comparability between periods of our financial results. 2014 2015(1) 7.7 % 4.3 % (1)Includes our current CEO for the full year and our former CEO for the two months of his service in that position. Includes both our current Chief Risk Officer for his 7 months with the Company during 2015 and his predecessor for the 9 months of his service in that position. Until Mr. Sinks became our CEO in March 2015, the group also includes his direct reports as Chief Operating Officer. Investor Outreach and Consideration of Last Year's "Say on Pay" VoteDuring 2015, we reached out to shareholders owning approximately 55% of our outstanding shares to discuss executive compensation and other corporate governance matters. We held meetings with, or received informal feedback from, shareholders owning approximately 27% of the outstanding shares. This outreach was a continuation of28 | MGIC Investment Corporation -2016 Proxy Statementour prior outreach efforts. During 2014, we reached out to shareholders owning approximately 70% of our outstanding shares to discuss our executive compensation program. We held meetings with, or received informal feedback from, shareholders owning almost 50% of the outstanding shares. As a result of feedback received from shareholders and others, the Committee changed our executive compensation program in the respects described below.What we heardHow we responded Shareholders want more transparency into how the annual bonuses for our NEOs are determined and how they are aligned with Company performance.For bonuses paid for 2014 and 2015 performance, we modified the bonus plan to be more formulaic; the bonuses were based on specific financial and business goals which align the bonus payouts with Company performance. We continued this formulaic approach for the 2016 bonus plan.Shareholders prefer goals to determine vesting of grants oflong-term equity awards that are largely different from the goals usedgranted to determine theour CEO and EVPs in 2017 requires 13.5% compound annual bonus.For the equity grants made in January 2015 and 2016, vesting of performance-based equity awards is based on growth in adjusted book value per share. Adjusted book value per share whichwill be computed as if the Tax Act had not reduced the corporate tax rate from 35% to 21%. Adjusted book value per share is a differentnon-GAAP financial goal than is used in determining annual bonuses.measure. For a description of how we calculate this measure and for a reconciliation of this measure to its nearest comparable GAAP measure, see Appendix B to this Proxy Statement.Shareholders prefer that•Incentive compensation for our CEO was 84.5% of his TDC in 2017 and averaged 79.3% for all NEOs. • Our 2017 equity awards vest based on performance against multi-year goals, not annual goals.to our CEO and EVPs were changed to:
°ForEstablish three-year cliff vesting,° Reduce by 12% the equity grants madenumber of underlying shares due to a sustained increase in January 2015our stock price, and 2016, full° Tie vesting of performance-based equity awards requiressolely to achievement of a three-year cumulativeperformance goal relating to increased book value growth goal.per share.The Company should adopt a "double trigger" mechanismFor more information about these changes, see "— Components of our Executive Compensation Program — 2017 Long-Term Equity Awards," page 39. These vesting features were unchanged for our 2018 awards, which also had the same number of underlying shares as in order for equity awards to vest upon a change in control and should eliminate excise tax gross-ups from all change in control agreements.2017.We modified our change in control agreements to eliminate both "single trigger" vesting of equity awards and excise tax gross-ups (gross-ups were previously only available for executives younger than 62). In addition, we implemented "double trigger" change in control vesting in our equity grants made in January 2015 and in our 2015 Omnibus Incentive Plan, which governs equity grants made after its adoption in April 2015.The Company should adopt a more robust "clawback" policy.•extended the scopeincreased our stock ownership guidelines in 2017. See "— Other Aspects of our clawback policyExecutive Compensation Program — Stock Ownership Guidelines," page 41.• We reduced the number of metrics to applydetermine the 2018 bonuses, to cash compensationfive from the ten used in addition2017. Feedback from an advisor to several of our shareholders suggested that ten metrics was a relatively large number that added complexity to the previously covered compensationprogram and had the possibility of insulating pay from equity awards.The Company should incorporate certain "best practice" provisionspoor performance in its Omnibus Incentive Plan.We added a minimum vesting period for all except 5% of shares to be issued under the plan, and we removed from the plan: (1) automaticany single trigger vesting of equity awards upon a change in control; (2) share recycling for shares withheld for tax purposes; and (3) the ability of the Committee to accelerate vesting, except under certain specified instances (such as death or retirement). metric.Following2015chart below. Important topics of the 2017 / 2018 shareholder outreach meetings were our executive compensation program, our shareholder rights agreement and governance matters. Important topics of our 2016 / 2017 shareholder outreach meetings were our executive compensation program and governance matters. Nearly all of the changes made to our executive compensation program in 2017 and 2018 and described immediately above, were in response to feedback received from our investors and their advisors. We value the views of our shareholders and intend to continue to engage and solicit their feedback.
Meeting, the Committee reviewed the resultsMeetings, 99% of the Say on Pay vote. More than 99% of the votes cast on the proposal were in support of the compensation of our NEOs. The Committee viewedviews this voting result as confirmation that shareholders were inof overwhelming shareholder support of the overallour executive compensation program.In addition to giving consideration to the Say on Pay vote, we intend to continue to engage with and solicit feedback from shareholders on executive compensation and other corporate governance matters.MGIC Investment Corporation -2016 Proxy Statement| 29"best practices"best practices that we believe align our executive compensation with long-term shareholder interests:Ownership:Ownership. StockIn early 2017, the Committee changed the stock ownership guidelines expressed as a fixed number of shares, are in placefor NEOs to be stock valued at six times base salary for our CEO and three times base salary for the other NEOs. At the time the Committee changed our stock ownership guidelines, our Benchmarking Peers had guidelines for their CEOs ranging from five to seven times base salary.officers. Asofficers are required to hold, for one year after vesting, the lower of December 31, 2015, our CEO, Mr. Sinks, had shares under the guidelines that had a value of more than 10 times his year-end base salary.Equity Holding Post-Vesting: 25% of shares that vest under equity awards grantedand 50% of the shares that were received by the officer after taking account of shares withheld to our NEOs, other executive officers and our chief accounting officer, must not be sold for one year after vesting.cover taxes. Apart from what is required, we have had a culture of stock retention by senior executives. Excluding shares withheld from equity awards for income tax withholding, nonethe last time any of our current or past NEOs had sold any of our stock while an NEO since April 2006.was more than 12 years ago.and Pledging: or 10b5-1 Plans. Our policies prohibit directors, NEOs and other executive officers and the chief accounting officer from entering into hedging transactions designed to hedge or offset a decrease inreferencing the value of the Company'sCompany’s equity securities, holding Company securities in a margin account, or pledging Company securities as collateral for a loan. They also prohibit the use by those individuals of plans created pursuant to Rule 10b5-1 of the Securities Exchange Act which, for example, may otherwise have allowed such persons to sell our stock while in possession of material undisclosed unfavorable information about us.Compensation:Compensation. More than 87%85% of our CEO's 2015 total direct compensationCEO’s 2017 TDC is performance-based.tied to achievement of pre‑set performance goals.Perquisites:Perquisites. Our NEO perks are very modest. In 2015, other than the payment of relocation expenses, our NEOs' perks rangedmodest, ranging between approximately $400$800 and $2,600. Although we are required by SEC rules to disclose payment$4,800 in 2017.relocation expenses as a perk, we do not view such payment as an executive perk because our relocation program is a broad-based benefit plan available to a majority of employees and because the employee does not receive a personal benefit for the relocation expenses in the way he or she may for other perks.Dilution:Dilution. The total equity awards granted to all participants in theunder our 2015 Omnibus Incentive PlansPlan in each of January 20152017 and January 20162018 were aboutless than 0.5% of our outstanding shares at the prior December 31. UsingIn October 2017, the "burn rate"Compensation Consultant provided a report indicating that the Company had the lowest dilution from outstanding awards among all companies in the Benchmarking Peer Group (calculated as average of 2014-2016 shares granted as a percentage of weighted average total shares outstanding). Based on a “burn rate” methodology of a leading proxy advisory firm, whichthat uses the average of the total awards granted (adjusted depending on the volatility of the price of the underlying stock) during each ofstock, which for us increases the last three completed yearscalculated "burn rate") and the weighted average number of shares outstanding during each such year,of the last three completed years, our "burn rate"three-year average annual “burn rate” for 2015-2017 would be approximately 1.1%1.2%.Benefits:·"Benefits:trigger"trigger” is required for any benefits to be paid;·Automatic "single trigger" vesting ofpaid — equity awards has been eliminated;· payable does not exceed 2x2 times base salary plus bonus plus retirement plan accrual; and·gross-up.Agreements:Agreements. None,None; only the limited provisions referred to above that becomeare effective after a change in control."Clawback" Policy:“Clawback” Policy. The "clawback"Our “clawback” policy applies to cash incentive compensation as well as equity award compensation from equity awards.received by our NEOs and other executive officers.Independent Compensation Consultant: Performs No Services for Us. The Committee's independent compensation consultant, Frederic W. Cook & Co.,Compensation Consultant is retained by the Committee and performs no other services for the Company.30 | MGIC Investment Corporation -2016 Proxy StatementEvaluation:Evaluation. Annually, the Committee reviews an executive compensation risk evaluation by management designed to ensure that has concluded our compensation programs do not motivate excessive risk-taking and that they are not reasonably likely to have a material adverse effect on the Company.Plan:Plan. In furtherance of our commitment to good compensation governance practices, the MGIC Investment CorporationOur 2015 Omnibus Incentive Plan, whichapproved by shareholders, approved atcontains the 2015 Annual Meeting,following provisions:does not allow the following:✗GrantingCompany'sCompany’s common stock on the date of grant✗Re-pricinggrant;options✗Cashoptions;options✗Inclusionoptions;grant✗Paymentgrant;vested✗Singlevested;replaced✗Sharereplaced;forof shares withheld for tax purposes upon vesting✗Grantingvesting;year✗disability"total direct compensation," which we define as the total of base salary, bonus and equity awards. Unless otherwise noted, the value of equity awards is their grant date value reported in the Summary Compensation Table (the "SCT").·executives:executives. We want a competitive pay opportunity in the sense that:◦ our base salaries are on average around the median of our Benchmarking Peers over a several year time horizon, and ◦ our bonus and long-term equity awards, when performance is strong, move TDC above the market median to reflect that strong performance. oour base salaries are on average around the market median of a group of peers over a several year time horizon, andoour bonus and long-term equity awards, when performance is strong, move total direct compensation above the market median to reflect that strong performance.·interests:interests. We aim to achieve a strongclose alignment between compensation and long-term shareholder interests by:◦ linking compensation to Company and executive performance; and ◦ paying a substantial portion of TDC in: § bonuses based on specific goals that align payouts with Company performance, and § long-term equity awards whose vesting is based on three-year goals that align payouts with Company performance and whose value directly reflects our stock price. olinking compensation to Company and executive performance; andopaying a substantial portion of total direct compensation in:§bonuses that are based on specific goals that align payouts with Company performance, and§long-term equity awards whose vesting is based on goals that align payouts with Company performance and whose value reflects total shareholder value.·perquisites:perquisites. PerksWe provide only minimal perks for our executive officers should be minimal.officers.MGIC Investment Corporation -2016 Proxy Statement| 31 to our Board for overseeing the development and administration of our executive compensation program. The Committee approves the compensation of our CEO and our other senior executives, and in connection with such approval performs other tasks including:···each NEO'sthe CEO’s total compensation package.Board'sBoard’s role in overseeing the risks facing the Company, as described in more detail above under "Committee“Committee Membership and Meetings — Board Oversight of Risk."Committee's independent compensation consultant,Committee’s Compensation Consultant, as described below. (the "Compensation Consultant"), a nationally recognized executive compensation consulting firm, to advise it. While our Chief Human Resources Officer coordinates its assignments, the Compensation Consultant reports directly to the Committee; the Committee retains sole authority to approve the compensation of the Compensation Consultant, determine the nature and scope of its services and evaluate its performance. The Compensation Consultant provides Aside from its role as the Committee's independent compensation consultant, the Compensation Consultant provides no other services to the Company.inits relationship to performance.During 20152016, the Compensation Consultant performed the following services:·Provided2018 included:peers.·ProvidedBenchmarking Peers;payouts.·Providedpayouts;provisions.·Providedprovisions;"best practice"“best practice” compensation practices, such as stock retention guidelines.·Reviewedguidelines;for competitive analyses.·Reviewedto evaluate our 2016 executive compensation and providing advice regarding the addition of four peers to the group in 2017;commentedcommenting on the CD&A and related compensation tables for the Proxy Statement.32 | MGIC Investment Corporation -2016 Proxy StatementContentsThe total amount of fees paidcompensation for the non-employee directors compared to market, and providing advice about possible revisions to the Compensation Consultant for services to the Committee in 2015 was $132,280. The Compensation Consultant provided no other services and received no other fees ordirector compensation from us. program.underlying process because the Committee views his input as necessary given his close day-to-day association with the other NEOs enables him to provide feedback to the Committee on their performance and his knowledge of our operations. Among other things, our CEO makes recommendations regarding all ofon the components of compensation described above for all of the NEOs, other than himself. Our CEO does not participate in the portionportions of the Committee meetingmeetings regarding the review of his own performance or the determination of the actual amounts of his compensation.Committee'sCommittee’s compensation process. Specifically, ourOur Chief Human Resources Officer is responsible for coordinating the work of the Compensation Consultant for the Committee and the annual preparation of an executive compensation risk evaluation, and is expected to maintainevaluation. He maintains knowledge of executive compensation trends, practices, rules and regulations and he works with our General Counsel on related legal and tax compliance matters.matters as well as on other matters related to executive compensation. The Committee receives information from management that includes: detailed breakdowns of the compensation of the NEOs; the amount, if any, that our NEOs realized in at leastduring the previous five yearsperiod they were NEOs from sales of stock received upon vesting of equity awards; the total amount of stock and RSUs held by each NEO (RSUs are sometimes referred to in this Proxy Statement as "restricted equity");NEO; and the other compensation information disclosed in this Proxy Statement. underSEC's rules.BENCHMARKING – MGIC-SELECTED PEER GROUPTo provideCommittee with a framework for evaluating compensation levels for our NEOs against market practices, the Compensation Consultant has periodically preparedprepares reports analyzing available compensation data. This data is typically gathered from SEC filings for a peer group of publicly traded companies.our Benchmarking Peers. In addition, each year we provide the Committee with information regarding market trends inand expected executive compensation base salary changes for the coming year. The compensation surveys that we reviewed and, with the concurrence of the Compensation Consultant, summarized in the aggregate for the Committee in connection with establishing base salaries for 20152017 were published by: Compensation Resources,by AON Hewitt, Mercer Consulting, Willis Towers Watson and World at Work.wethe selected peers are appropriate for benchmarking purposesparticular peers against which we benchmarkcompanies added for 2017, is shown below. We believe these companies are appropriate for benchmarking our executive compensationOur peer group consists of for the following ten companies: Direct Exposure to Residential Real Estate Market Industry in which we Compete for Talent Chose us as a Peer Business MGIC 2017 Peer Group Ambac Financial Group, Inc.Arch Capital Group Ltd.Assured Guaranty Ltd.Essent Group Ltd.Fidelity National Financial Inc.First American Financial Corp.Genworth Financial Inc.MBIA Inc.NMI Holdings Inc.Radian Group Inc. MGIC 2016 Peer Group Ambac Financial Group, Inc. X X X Financial Guaranty Insurer Arch Capital Group Ltd. X X X Includes Mortgage Insurer Assured Guaranty Ltd. X X X Financial Guaranty Insurer Essent Group Ltd. X X X X Mortgage Insurer Fidelity National Financial Inc. X X Title Ins & Other R.E. Services First American Fin'l Corp. X X Title Ins & Other R.E. Services Genworth Financial Inc. X X X X Includes Mortgage Insurer MBIA Inc. X X X Financial Guaranty Insurer NMI Holdings Inc. X X X X Mortgage Insurer Radian Group Inc. X X X X Mortgage Insurer Flagstar Bancorp Inc. X X Mortgage Orig & Svg; Banking Ocwen Financial Corp. X X X Mortgage Svg & Lending PennyMac Fin'l Services Inc. X X X Mortgage Svg & Lending PHH Corporation X X X Mortgage Svg & Lending (1) MGIC Investment Corporation -2016 Proxy Statement| 33Parent companies of direct competitors whose overall results are principally or significantly impacted by these competitors.We believe this peer group is appropriate for benchmarking our executive compensation because:·These companies areindustries with whichtable below, we currently compete for executive talent.·Five of the companies are parent companies of direct competitors whose overall results are principally or significantly impacted by these competitors.·Three of the companies are financial guaranty insurers having significant exposure to residential mortgage credit risk.·All of the companies had significant insurance businesses, not lending businesses, and therefore, relevant size comparisons are possible.·Six of the companies also named us a peer.·One of the companies (Fidelity National Financial Inc.) also has an operating unit that provides technology and transaction services to the real estate and mortgage industries.·We do not believe that adding general insurance or other financial services companies beyond the surety and financial guaranty niches would provide meaningful information to the Committee in evaluating executive compensation pay and performance.We arereasonably comparable in sizeterms of revenues, market capitalization and CEO compensation to the companies in our peer group, however, our 2014 and 2015 CEO compensation is lower than median. In January 2016, the Compensation Consultant provided the following comparative data for our peer group, from which we calculated the percentile rank shown for MGIC. MGIC Percentile Rank Among Ten-CompanyBenchmarking Peer GroupGroup. Revenue(1)
($ millions) Market Capitalization(1)
($ millions) 2014 CEO
Total Direct
Compensation
($ thousands)(2) 2015 CEO
Total Direct
Compensation
($ thousands)(2) 4,817 3,862 8,623 8,623 1,680 2,399 7,686 7,686 713 1,207 4,971 4,971 1,053 2,999 6,283 6,112 39th 58th 39th 38th MGIC Percentile Rank Versus Peer Group 2017 Revenue 41st 12/31/17 Market Capitalization 80th 2017 CEO TDC 44th 1-Year TSR (Period ended 12/31/17) 76th 3-Year TSR (Period ended 12/31/17) 61st 5-Year TSR (Period ended 12/31/17) 100th (1)Revenues are for twelve months ended September 30, 2015, and market capitalization is as of December 31, 2015.(2)Peer company compensation is for 2014 because in January 2016, that was the latest compensation data available for our peer group.The following table shows the Company's absolute Total Shareholder Return ("TSR") and its ranking relative to the ten companies in our peer group over the last one and three year time periods. We believe our above-average TSR performance reflects our improved capital position, our increased market share beginning in mid-2013 and lower losses from our books of business written in 2005-2008. Total Shareholder Return (TSR) 1-Year 3-Year -5.3% 49.2% 62nd 100th Source: Standard and Poor'sCapital IQ34 | MGIC Investment Corporation -2016 Proxy StatementDuring our 2014 and 2015 shareholder outreach efforts, our shareholders did not raise concerns about our peer group selection process. Why we do not select our peer group primarily from companies within our GICS codeWe are in the "Thrifts and Mortgage Finance Companies" eight-digit Global Industry Classification Standard code ("GICS code"). We do not select our peers primarily from the companies within this GICS code because, with few exceptions, those companies: (1) have substantially different business models from that of our Company, (2) are not subject to residential mortgage risk to the same extent that our Company and our peers are and (3) are not the companies with which we compete for executive talent. The U.S. mortgage insurance industry has only seven active companies and it does not have a unique GICS code. While four mortgage insurers, including our Company, are included in the "Thrifts and Mortgage Finance Companies" GICS code, substantially all of the other companies in our GICS code are community banks and other smaller lending institutions, not insurers. Two mortgage insurers are in the "Multi-line Insurance" GICS code and one is in the "Property and Casualty Insurance" GICS code.In January 2016, the Compensation Consultant simulated a 24 company peer group employing the published peer group selection methodology used by a leading proxy advisory firm, which is expected to be similar to the peer group that firm will use when analyzing our 2016 Proxy Statement. We refer to this peer group as the "Expected Proxy Advisory Firm Peer Group." The Expected Proxy Advisory Firm Peer Group consisted of 22 companies in the Thrifts and Mortgage Finance Companies GICS code, one company in the Property and Casualty Insurance GICS code and one company in the Specialized Finance GICS Code. It included only two companies we had chosen as peers. We do not believe that comparisons to the Expected Proxy Advisory Firm Peer Group are appropriate for us because, according to the Compensation Consultant's analysis, we are not similar in size or market capitalization to the companies in that peer group: our revenues were in the 90th percentile of the Expected Proxy Advisory Firm Peer Group and our market capitalization was in the 96th percentile. In addition, we are not in a similar industry to most of the companies in the Expected Proxy Advisory Firm Peer Group. The 24 companies in the Expected Proxy Advisory Firm Peer Group include 19 community and regional banks. Our business is very different from community and regional banking.The published material of the proxy advisory firm referred to above says the firm applies size constraints to select peer groups. We understand that companies in our GICS code are generally selected by the proxy advisory firm if they have total assets between 0.4 and 2.5 times our assets; companies in the Property and Casualty Insurance GICS code (which includes six of the companies we had chosen as peers) and companies in the Multi-line Insurance GICS code (which includes one company we had chosen as a peer) are selected if they have revenues between 0.4 and 2.5 times our revenues. Even if our GICS code were used to select a peer group, because we are an insurance company, revenues are a better metric for selection of a peer group than balance sheet assets. Unlike community and regional banks whose revenues are largely a function of assets on their balance sheets, our revenues are largely a function of our insurance in force, which is not on our balance sheet.The Compensation Consultant also simulated a peer group using the published peer selection methodology of the proxy advisory firm, but using revenues rather than assets as the size constraint yardstick. The resulting peer group consisted of 24 companies, eight of which are in the Thrifts and Mortgage Finance Companies GICS code and 16 of which are in the Property and Casualty Insurance GICS code. While many of these companies are not in an industry similar to ours (this peer group included only four companies we had chosen as peers), we are much more similar in size to the companies in this simulated peer group: our revenues are in the 49th percentile and our assets are in the 53rd percentile of this simulated peer group. Our market capitalization is in the 91st percentile. Our CEO's 2015 SCT compensation had a much lower multiple of the median of the most recent available SCT compensation of the CEOs of this peer group than his compensation's multiple of the median CEO compensation of the Expected Proxy Advisory Firm Peer Group, which consisted primarily of community and regional banks that are much smaller than us.MGIC Investment Corporation -2016 Proxy Statement| 35The database from which the Compensation Consultant drew the information to perform the simulations referred to above contained revenues for the twelve months ended September 30, 2015, assets as of September 30, 2015 and market capitalization as of November 30, 2015, and our percentile rankings are based on that information.The following discussion describeselementscomponents of our executive compensation is discussed below. To meet our objective of aligning compensation and shareholder interests, our executive compensation program includes an annual bonus program that is tied to Company performance, and contains information regarding certainlong-term equity awards whose vesting is based on Company performance measures and goals.
Base salaries provide NEOs with a fixed, minimum level of cash compensation. counterparts in the peer group of companies discussed above under "Benchmarking – MGIC-SelectedBenchmarking Peer Group."Group counterparts. In addition to reviewing market competitiveness, in considering any change to our CEO'sCEO’s compensation, including base salary, the Committee takes into account its evaluation of his performance, based in part on a CEO evaluation survey completed by each non-management director. The subjectsSubjects covered by the evaluation include financial results, leadership, strategic planning, succession planning, external relationships and communications and relations with the Board. Base salary changes for our other NEOs are recommended to the Committee by the CEO. Historically, these recommendations have been the product of anCEO based on his evaluation of each executive officer'sNEO’s performance including contributions to the Company, and the base salary surveys referred to under "Benchmarking – MGIC-Selected Peer Group"“Benchmarking” above. The Committee approves changes in salaries for these officersNEOs after taking into account the CEO'sCEO’s recommendations and anythe Committee's independent judgment regarding the officer that the Committee has gained through the Committee's and the Board'sCommittee’s general contact with them.Mr. Sinks became our Chief Executive Officer effective March 1, 2015 and, at that time,them, including contact through Board meetings.an increase in base salary in connection with his promotion. Effective in late March 2015, each of our other NEOs received a 3% merit salary increase of approximately 3%. (The portion of Mr. Lane's base salary attributable to a 2010 retention arrangement is not considered in determining his increase.)Mr. Mattke received2016, we experienced large one-time expenses, including an additional increase$133 million tax provision in 2017 as a result of the enactment of the Tax Act. Because of the non-recurring nature of these items, we believe a benchmark of adjusted net operating income (including per diluted share) should be used to better align his base salary with his responsibilitiesanalyze our 2017 and 2016 actual results. Adjusted net operating income excludes this additional tax provision and other items that are generally viewed by securities analysts that follow us as Chief Financial Officer. Effectivenot relevant to their analysis of our performance. Our adjusted net operating income per diluted share was $1.36 in late March2017, compared to $0.99 in 2016, each NEO will receive between a 2 and 3% merit salary37% increase; our adjusted net operating income was $517.7 million in 2017, compared to $396.3 million in 2016, a 31% increase. Incentive Programs2018 Proxy Statement │ 33To ensure that it meets the objectiveAnnual Bonus — COMPENSATION DISCUSSION & ANALYSISaligning compensation and shareholder interests, our executive compensation program includes an annualcurrent bonus program, whose payout is tied to Company performance,which has financial goals and long-term equity awards whose vesting is based on Company performancebusiness objectives, was initially adopted for our 2015 fiscal year and whose ultimate value is based on our stock price. Annual Bonus. The Committee left unchanged. Unchanged from 2016, the NEOs'NEOs’ maximum bonus opportunities for 2015 (32017 are 3 times base salary infor the case of the CEO and 2.25 times base salary infor the caseother NEOs. (The portion of the NEOs who are Executive Vice Presidents, and 1.80 timesMr. Lane's base salary in the caseattributable to a 2010 retention arrangement is not considered as part of the NEOs who are Senior Vice Presidents).his base salary for these purposes.) Bonus opportunity represents a multiple of the base salary amount approved by the Committee in January that becomes effective in March or April of the year for which the bonuses are awarded. Such base salary amounts will not be the same as the base salary amounts disclosed in the SCT due to the effects of the March or April pay increases and variability in the number of pay periods in each calendar year. Based on our periodic assessment of peer compensation,our Benchmarking Peer Group, we have determined that these maximum bonus opportunities are appropriate to meet our objective that, when performance is strong, our bonus and long-term equity awards should move total direct compensationTDC above the market median to reflect that higher performance. In addition, in determining the total direct compensationTDC opportunity, the Committee has weighted bonus potentials more heavily than base salaries because bonuses are more directly linked to Company performance. For 2015, annual36 | MGIC Investment Corporation -2016 Proxy Statementbonuses represented, on average, approximately 38% of the total direct compensation of our NEOs employed by the Company at year-end; annual bonuses and long-term equity awards represented 82% of that total direct compensation.The following table shows how our 2014 maximum bonus opportunity andis in line with our Benchmarking Peers' practices. In January 2018, the Compensation Consultant provided a report including the following comparative data showing how our CEO’s 2016 maximum bonus in each caseopportunity, as a percentage of base salary, compares to those of the CEOs in our ten-company peer group. 2014 comparisonsBenchmarking Peer Group. Comparisons for 2016 are shown because this compensation data iswas the latest compensation data available from our peer group's proxy statements when this CD&Athe report was finalized.Ten-CompanyBenchmarking Peer Groupand Actual Bonus Paid for 20142016 as a Percent of Base Salary Bonus Opportunity(1)
(% of Base Salary) 2014 Bonus(2)
(% of Base Salary) 300% 110% 325% 223% 420% 351% 300% 298% 2016 Peer Group MGIC 25th percentile Median 75th percentile 300% 240% 306% 438% (1) Of the fourteen peer companies, twelve disclose a maximum bonus opportunity. For the two companies that do not disclose a maximum bonus opportunity, we used the highest percentage paid for 2014, 2015 or 2016 as the maximum opportunity. (1)Of the ten peer companies, eight disclose a maximum bonus opportunity.(2)Represents bonus and annual short-term cash incentive reported in the SCT.20152017 Bonus. Our Omnibus Incentive Plan, approved by shareholders, contains a list of performance goals for an annual bonus plan for our NEOs that condition the payment. Payment of bonuses for NEOs is conditioned on meeting one or more of the goals listed goals as selected byin our shareholder-approved 2015 Omnibus Incentive Plan. Prior to the Committee each year. CompensationTax Act, compensation paid under a bonus plan of this type (which we refer to as a "162(m) bonus plan") iswas intended to qualify as deductible compensation, as discussed in more detail under "Other“Other Aspects of Our Executive Compensation Program – Tax Deductibility Limit"Limit” in this CD&A. Under the 20152017 bonus plan, if the sum of the ExpenseCombined Ratio and MGIC's Loss Ratio (the "Combined Ratio") on new business written is less than 40%, then the maximum bonus ismay be paid, unless the bonus formula described below results in a lower amount. For 2017, our Combined Ratio was 20.5%, which is the sum of our Expense Ratio of 16.0% and our Loss Ratio of 4.5%. For more information about these metrics, see the table titled "Calculation of 2017 Preliminary Bonus Percentage" below.The20152017 had five financial performance goals and four business performance goals. Each goal was assigned(with a weight. The financial performance goals had a collectivetotal weight of 75% in the bonus formula) and thefive business performance goals hadobjectives (with a collectivetotal weight of 25%). Threshold, target and maximum performance levels were established for each financial performance goal. Actual performance at such levels would result in 0%, 60%50% and 100% achievement, respectively, for that goal, with actual achievement between these levels calculated based onby interpolation.Company'spercentages determined by the Company’s actual 20152017 performance was compared to the threshold, target and maximum values and the resulting percentage wasfor each financial performance goal were multiplied by the weightassigned weights to determine a weighted score for each financial performancethat goal. For each business performance goal,objective, the Committee reviewed management'smanagement’s written report of the Company'sCompany’s activities with respect to each goalobjective and the related score, which was accepted by the Committee. In accordance with the bonus formula, the sum of theCalculation of 2017 Preliminary Bonus Percentage Maximum Possible 2017 Performance Levels Actual Score Weighted Threshold Target Maximum 2017 (Weight) Score Score Financial Performance Goals: Diluted EPS, before effects of tax law changes $0.43 $0.86 $1.08 $1.28 30 % 30.0 Return on Equity, before effects of tax law changes 6.0 % 12.4 % 15.0 % 19.2 % 25 25.0 Flow New Insurance Written (billions) $40.0 $48.0 $56.0 $49.1 15 8.5 Expense Ratio 20.4 % 17.4 % 15.0 % 16.0 % 15 11.9 Loss Ratio 6.2 % 3.1 % 2.1 % 4.5 % 15 4.1 Total 100 % 79.5 Times: Total Weight of Financial Performance Goals X 75% 59.6 % Business Objectives: Capital Position For a discussion of performance against these business objectives, see "Performance Against Business Objectives" below 20 % 20.0 Grow Insurance in Force 20 20.0 Manage Role of MI in Housing Policy 20 18.0 Pursue Business Opportunities 20 10.0 Develop Co-Workers 20 20.0 Total 100 % 88.0 Times: Total Weight of Business Objectives X 25% 22.0 % 2017 Preliminary Bonus Percentage 81.6 % performance goal scores was weighted 75% and the sum of the weighted business performance goal scores was weighted 25%.Rigor of Our Bonus Targets. The table on page 39 shows the individual components of the bonus formula and how they were used in the bonus calculation. It also shows how the threshold, target and maximum performance levels for each financial performance goal compared to actual performance in each of 2013, 2014 and 2015. As discussed above and as shown in the table, 75% of our NEOs' bonuses are determined by comparing actual performance to the financial performance goals.Pre-tax diluted earnings per share. The target performance level of $0.78 for pre-tax diluted earnings per share was $0.13 (20%) higher than the actual result for 2014 of $0.65. However, we think the rigor of the 2015 target performance level should be evaluated by considering that it was $0.38 (95%) higher than the 2014 actual result of $0.40, calculated after excluding the effects of favorable "reserve development" in our year-end 2013 loss reserves (explained immediately below).MGIC Investment Corporation -2016 Proxy Statement| 37Our loss reserves at the end of a period are our best estimate of what we will pay in claims and related expenses for loans we have insured that are in default at the end of the period. The factors that principally affect loss reserves are the percentage of loans in default that we estimate will eventually become claims, and the amount we estimate we will pay on such claims. Estimation of losses is inherently judgmental. The actual amount of the claim payments may be substantially different than our loss reserve estimates.At year-end 2015 and 2014, loss reserves were 32% and 46%, respectively, of our total liabilities plus shareholders' equity. Because our loss reserves are such a large portion of our balance sheet, small differences in our estimates at a period-end compared to our estimates on the same loans in default at the prior period-end (we refer to this comparison as "reserve development") can materially affect our results.The impact on pre-tax income from reserve development during the last five years is indicated in the table below.Impact on pre-tax income (thousands) 2011 2012 2013 2014 2015 $99,000 ($573,000) $60,000 $100,000 $110,000 Our 2015 forecast (which generally determined our target performance level) for pre-tax diluted earnings per share did not assume there would be any favorable reserve development in 2015 because our loss reserves at the prior year-end were our best estimate of how the loans in default will ultimately resolve. While during the last three years the reserves have developed better than we had estimated (which we refer to as "positive reserve development"), in 2012 they developed materially worse (which we refer to as "negative reserve development").As noted above, our 2015 pre-tax diluted EPS target performance level was set at $0.78, which was 95% above our 2014 pre-tax diluted EPS of $0.40, calculated after excluding the effects of favorable reserve development in our year-end 2013 loss reserves. When the positive reserve development that occurred in 2013 is eliminated in the same way, our 2014 pre-tax diluted EPS target performance level of $0.00 shown in our 2015 Proxy Statement was $0.34 better than our 2013 pre-tax diluted EPS of ($0.34).Pre-tax diluted earnings per share calculated after excluding the effects of favorable reserve development is a non-GAAP financial measure. We present this non-GAAP financial measure as supplemental information to aid in understanding how we developed the forecast that became the basis for our target performance level in 2015. Following is a reconciliation for 2013 and 2014 of the GAAP financial measure, diluted income (loss) per share, to the non-GAAP financial measure, pre-tax diluted earnings per share calculated after excluding the effects of favorable reserve development. 2013 2014 $ (0.16 ) $ 0.64 0.01 0.01 (0.15 ) 0.65 (0.19 ) (0.25 ) $ (0.34 ) $ 0.40 Pre-tax return on beginning equity. Our 2015 pre-tax return on beginning equity target performance level was set at 30%, which is 9.2 percentage points above our 2014 pre-tax return on equity of 20.8%, calculated after excluding the effects of positive reserve development in 2014. The rigor of a 9.2 percentage point increase in this target performance level compared to 2014 results should also be evaluated by considering the much greater beginning equity on which the return must be earned: our equity at the beginning of 2015 of $1.0 billion was 39% greater than the equity at the beginning of 2014.38 | MGIC Investment Corporation -2016 Proxy StatementNew insurance written. Our 2015 new insurance written target performance level was set at $36.0 billion, which reflected our 2015 forecast and was 7.8% above our 2014 actual new insurance written of $33.4 billion. Calculation of 2015 Percent of Maximum Bonus Performance Levels Maximum
Possible
Score
(Weight) Actual
2013 Actual
2014 Actual
2015 Weighted
Score Threshold Target Maximum Score
-$0.15
$0.65
$0.28
$0.78
$0.94
$1.18
30
%
30 23.4% 34.2% 15.0% 30.0% 36.0% 47.0% 25 25 $29.8 $33.4 $32.0 $36.0 $40.0 $43.0 15 15 1.2% 2.2% 18.0% 10.0% 3.0% 1.5% 15 15 18.6% 14.7% 21.0% 18.0% 16.0% 14.9% 15 15 100 % 100 X 75% 75.0%
25
%
25 against these business performance 25 20 goals, see "Executive Summary – 25 25 Business Highlights – Business 25 20 Performance" above 100 % 90 X 25% 22.5% 97.5% (1)Pre-tax net income adjusted for interest expense on dilutive common stock equivalents related to our convertible debt divided by weighted average shares of common stock outstanding plus dilutive common stock equivalents.(2)Pre-tax net income for the year divided by beginning of the year equity.(3)Flow new insurance written for the year.(4)Direct (before reinsurance) incurred losses divided by direct earned premiums, in both cases for MGIC's primary new insurance written for the year; incurred losses exclude the effect of losses incurred on notices of default that have not yet been reported to us, which is commonly known as "IBNR."(5)Combined insurance operations underwriting expenses divided by net premiums written for the year.(6)Manage capital position considering state requirements, the GSEs, and dilution, earnings and market impact.(7)Manage 2015 new insurance written by product, geography and customer to produce a short and longer-term desirable mix.(8)Develop and nurture a respected management organization with a clear path of succession throughout using best practice talent management efforts.(9)Manage the company's business franchise through dealings with federal and state regulatory agencies as well as the GSEs.As a result of our outstanding performance for 2015, the bonus formula resulted in a preliminary bonus amount of 97.5% of the bonus opportunity for each NEO. The percentage of an executive's maximum possible bonus that was awarded was based primarily on that preliminary bonus amount, however, the81.6%. The Committee has discretion to decreaseadjust the preliminary bonus percentage down by as much as 20%20 percentage points or increaseup by as much as 10%10 percentage points, but did not do so. The adjusted percentage was multiplied by the percentage awardedaggregate maximum bonuses of the NEOs to a particular executive, subjectdetermine the amount of the total bonus pool, which the Committee is not required to allocate in full; it allocated the pool such that the CEO received 81% of his or her maximum bonus opportunity. The Committee exercised its discretion to reduce the bonus of the CEO by 5.5 percentage points to 92% so that it would align with the weighted average bonus percentage of the senior officer group, which is a broader group than the NEOs.MGIC Investment Corporation -2016 Proxy Statement| 39The following table illustrates how our CEO's bonus payout for the past five years has aligned with our income (loss) before tax and the Company's year-end stock price. We show income (loss) before tax, and not net income, for comparability purposes because our 2015 net income included a one-time benefitother NEOs received an average of $687 million associated with the reversal80.5% of the valuation allowance that had previously offset our deferred tax assets. 2011 2012 2013 2014 2015 28% 17% 75% 99% 92% $ (484 ) $ (929 ) $ (46 ) $ 255 $ 488 $ 3.73 $ 2.66 $ 8.44 $ 9.32 $ 8.83 presentsrecommends to the Committee a recommended bonus for each of the other NEOs, which takes account of the bonus formula and the CEO'sCEO’s evaluation of the NEO's jobNEO’s performance. The Committee, which generally has regular contact with the NEOs through their interaction with the Board, accepted the CEO'sCEO’s recommendation and approved bonuses for the other NEOs that on a weighted average basis were 95%NEOs.theirthe maximum possible bonus opportunity. Mr. Lane's bonus opportunity eliminatesreceived by our CEO for the portion of his base salary attributable to a March 2010 increase that was part of an arrangement with him to continuepast three years. 2015 2016 2017 CEO Bonus Received as a Percentage of Maximum Possible Bonus 92% 89% 81% employmenttable below, in 2017, the Company achieved favorable results against the business objectives used to determine the 2017 bonuses of our NEOs.Business Objective Results » » » » • Positioned a credit insurance subsidiary to participate in future GSE credit risk transfer deals if acceptable returns can be achieved, considering strategic benefits. (In the first quarter of 2018, this subsidiary participated in two such deals.) » • Continued to build a robust talent review and succession mechanism for all management and key contributor positions. 2016 2017 Performance Levels Actual Target Maximum $0.86 $0.86 $1.08 2016 2017 Performance Levels Actual Target Maximum 15.3% 12.4% 15.0% Company.2016 2017 Performance Levels Actual Target Maximum $47.9 $48.0 $56.0 2016 2017 Performance Levels Actual Target Maximum 15.3% 17.4% 15.0% 2016 2017 Performance Levels Actual Target Maximum 3.1% 3.1% 2.1% (1) Our 2015 Omnibus Incentive Plan provides for performance to be calculated by excluding items determined to be extraordinary, unusual or non-recurring, which for 2017 were losses incurred associated with hurricane activity in Florida, Puerto Rico and Texas. 
are intended to beprovide one of theour most significant total direct compensation opportunities, along with annual bonuses.TDC opportunities. We emphasize this component of our executive compensation program because it aligns executives'executives’ interests with those of shareholders by linking compensation to both company performance and stock price. For 2015,price, while fostering a long-term planning horizon and supporting the retention of our leadership team. Long-term equity awards at their grant date value represented 51%47% of the total direct compensation2017 TDC of our CEO and on average, 37%averaged 38% of the total direct compensation2017 TDC of our other NEOs employed by the Company at year-end.Despite having outstanding operating results for 2015, our stock price has experienced significant declines since the 2015 awards were granted. Based on the closing price of our stock of $5.66 on January 25, 2016 (the date on which the Committee met to grant long-term equity awards and approve bonuses), ourNEOs.valued at $3.1 million onare in line with our Benchmarking Peers' practices. The following table shows how the Company's grant date in 2015 had decreased in value by $1.2 million, or 19% of his total direct compensation. While the price of our stock had recovered some of this decline at the time this CD&A was finalized, in our view, this decrease nevertheless demonstrates the linkage between our CEO's compensation and shareholder return.We have awarded approximately the same number of shares to our CEO and other NEOs during 2011-2016. The price of our stock was extremely volatile during this period; its closing price on the award dates in 2011, 2012, 2013, 2014, 2015 and 2016 was $8.94, $3.95, $2.75, $8.43, $8.98 and $5.66, respectively. Given the bounds of this price range, the Committee believed that reducing the number of shares when the price went up and increasing it when the price went down would not foster proper alignment with shareholders. Data provided to the Committee by the Compensation Consultant in January 2016 indicated that the long-term equity awards to our CEO compares to the awards to the CEOs of our Benchmarking Peer Group. MGIC's percentile rank in January 2014 and January 2015 were at approximately2016 was low due to the 5th and 22nd percentiles, respectively, of the equity awards by our peer group to their CEOs in 2014; 2014 comparisons were used because in January 2016, this compensation data was the latest compensation data available from our peer group's proxy statements. To the extent ourlow stock price changes materially inon the future, the Committee will review the appropriateness of maintaining the current award levels.As a result of feedback received from shareholders and others (see "Investor Outreach and Consideration of Last Year's 'Say on Pay' Vote"), and the Committee's view that our long-term incentive program should reflect our expectation of future profitable operations, we restructured the vesting goals for the long-term equity awards wegrant date. (Awards are granted in January 2015. of each year.) Target # of Shares Granted Grant Date Value MGIC Grant Date Stock Price MGIC Percentile Rank 2016 Long-Term Equity Awards 294,000 $1,664,040 $5.66 30th 2017 Long-Term Equity Awards 243,320 $2,532,961 $10.41 44th 2018 Long-Term Equity Awards (2017 awards for peers) 264,880 $4,187,753 $15.81 60th the 2015 Long-Term Equity Award Program, followed byour 2017 long-term equity awards and a discussion of the 2014our 2016 and 2013 Long-Term Equity Award Programs,2015 long-term equity awards, which has beenis provided for comparison purposes and because a portion of the long-term equity awards granted in 20142016 and 20132015 vested in 2015.40 | MGIC Investment Corporation -2016 Proxy Statement
2017.Table of ContentsChange Explanation 100% Cliff Vesting » The 2016 Book Value (BV) Awards, discussed below, were subject to partial vesting each year, while the 2017 Book Value (BV) Awards only cliff vest after three years based on compound achievement of an adjusted book value per share growth goal. 100% BV Awards » While 2016 BV Awards represented 80% of the equity awards granted to our CEO and EVPs in 2016, BV Awards represent 100% of the equity awards to these officers in 2017. Reduced Number of Units Awarded » We awarded approximately the same number of RSUs to our CEO and other NEOs each year during 2012-2016. The price of our stock was extremely volatile during this period; its closing price on the award dates in each of those years was $3.95, $2.75, $8.43, $8.98, and $5.66. Given the bounds of this price range, the Committee believed that reducing the number of shares when the price went up and increasing it when the price went down would not foster proper alignment with shareholders. Given the increase in our stock price from the 2016 grant date, a general sustained increase in its price since mid-2012, and our return to sustained profitability, the Committee reduced the number of shares awarded in 2017 by 12% compared to the number granted in 2016. 2015 Program2018 Proxy Statement │ 393-year Cumulative Goal 2017 Actual Growth $3.56 $1.34 . The vesting goals for performance-based equity awards granted to NEOs beginning in 2015 were changed in response to feedback that our three-year awards granted in 2014 and earlier used annual (not cumulative) measurements to determine vesting and that our long-term performance-based equity awards used vesting goals similar to those used by the 2013 and earlier annual bonus programs to determine payouts. In addition, the changes reflect the progress made in the mortgage insurance industry since the financial crisis began and the Company's return to profitability as well as an effort to simplify the program.. representrepresented 80% of the long-term equity awards granted in each of January 2016 and 2015 to the CEO and NEOs who were Executive Vice Presidents ("EVPs"), and 60% of the awards to NEOs who were Senior Vice Presidents. Subject to the Company having a Combined Ratio of less than 40% in the applicable measurement year, vestingPresidents ("SVPs"). Vesting for these awards will occur over a three-year period, based on achievement of a three-year cumulative goal for growth in adjusted book valueABV per share. Partial vesting may occur annually (up to a maximum of1/ 1/3 for the first year and2/ 2/3 for the first and second years combined) based on progress against the three-year cumulative goal. The vesting structure of the BV Awards will motivate executive officers to improve our multi-year financial performance. Adjusted book valueABV per share is calculated excluding the effects on shareholders' equitya non-GAAP financial measure. For a description of deferred tax assetshow we calculate this measure and accumulated other comprehensive income ("AOCI"). Adjusted book value was chosen as the vesting goal in part becausefor a reconciliation of this measure to its simplicity and relevancenearest comparable GAAP measure, see Appendix B to management and investors. this Proxy Statement.Committee believes it is important to adjust book value per share by eliminating the effects of (1) the large increase in shareholders' equity that was expected to (and did) accompany the reversal of the valuation allowance that offsets deferred tax assets, and (2) items in AOCI because they do not and may never flow through the income statement, such as unrealized amounts associated with mark-to-market adjustments on investments, benefit plan adjustments and foreign currency translation income and loss.The following table shows the recent growth in adjusted book value per share, tables below show:percentage for the awards that vested in March 2016. percentages.3-yearthree-year cumulative goal for 2016 and 2015 equity awards was 51% higher than three times therepresented a compound annual growth achieved in 2014.Growth in Book Value per Share 2015 Equity Awards
3-year Cumulative 2013 Actual(1) 2014 Actual Goal 2015 Actual Vesting % $(0.28) $0.75 $3.39 $1.21 33.3% (1)2013 Growth in Adjusted Book Value per Share excludes the effect of the public offering of the Company's common stockfor 2016 Equity Awards3-year Cumulative Goal 2016 Actual Growth 2016 Vesting % 2017 Actual Growth 2017 Vesting % $3.49 $0.94 26.9% $1.44 39.8% March 2013.Adjusted Book Value per Share for 2015 Equity AwardsFor long-term equity awards granted in January 3-year Cumulative Goal 2015 Actual Growth 2015 Vesting % 2016 Actual Growth 2016 Vesting % 2017 Actual Growth 2017 Vesting % $3.39 $1.21 33.3% $1.40 33.4% $2.05 33.3% the Committee determined that the three-year cumulative goal for growth in book value per share should reflect 10% annual growth in net income during this period (assuming a 35% tax rate applied to 2015 pre-tax income).–- CR (Combined Ratio) Awards.. The remaining 20% of the long-term equity awards granted in January 2016 and January 2015 to the CEO and NEOs who were Executive Vice Presidents,EVPs, and 40% of the awards to NEOs who were Senior Vice Presidents,SVPs, vest through continued service during a three-year performance period, if the Combined Ratio is less than 40%. The Committee adopted a performance goalsgoal for these awards to further align the interests of our NEOs with shareholders and to permitqualify the awards to qualify for the performance-based compensation exception under Section 162(m)"Other“Other Aspects of Our Executive Compensation Program – Tax Deductibility Limit"Limit” in this CD&A. One-third of the CR Awards are scheduled to vest in each of the three years after they are granted. However, if anyIf the performance goal is not met for a particular year, the awards that were scheduled to vest that year will be forfeited.CR Awards2016 and 2015 awards that arewere scheduled to vest in any year do not vest because we fail to meet the applicable performance goal, the award will remain eligible for vesting if we meet the applicable performance goal in a future year, except that any of the award that has not vested after five years will be forfeited. February 2017 did vest.For 2015, the Expense Ratio was 14.9% and MGIC's Loss Ratio was 1.5%. Therefore, we met our Combined Ratio performance goal because the Combined Ratio was 16.4%, which is less than the Combined Ratio performance goal and as a result, the portions of the 2015 awards that were scheduled to vest in February 2016 did vest.MGIC Investment Corporation -2016 Proxy Statement| 41 Long-Term Equity Awards – 2014 and 2013 Programs2014 and 2013 Performance-Based Long-Term Equity Awards – LEM (Loss Ratio, Expense Ratio, Market Share) Awards. Vesting for 80% of our 2014 and 2013 long-term equity awards to our then-NEOs depended on actual performance for each year in the three-year performance period beginning with the year of the grant against goals for MGIC's Loss Ratio, our Expense Ratio, and MGIC's Market Share of flow new insurance written. The Committee adopted those performance goals because it believed that more typical earnings goals were inappropriate during the financial crisis and that the goals chosen were appropriate because they are the building blocks of our results of operations. That is, the Loss Ratio measures the quality of the business we write; the Expense Ratio measures how efficiently we use our resources; and the Market Share measures not only our success at generating revenues, but also the extent to which we are successful in leading our industry. The three performance goals were equally weighted for vesting purposes and each was assigned a Threshold, Target and Maximum performance level.Vesting for awards granted in 2014 was determined in February 2015 and February 2016 and will be determined in February 2017 based on performance during the prior year. Vesting for awards granted in 2013 was determined in February of each of 2014, 2015 and 2016.For 2015, MGIC's Loss Ratio was 1.5% (which was better than the Maximum performance level for the 2013 and 2014 grants), the Expense Ratio was 14.9% (which was also better than the Maximum performance level for the 2013 and 2014 grants), and Market Share was 20.0% (which was between the Target and Maximum performance levels for the 2013 grants and at maximum for the 2014 grants). As a result, in March 2016, 31.5% of the performance-based equity awards granted in 2013 to the then-NEOs vested and 33.3% of the performance-based equity awards granted in 2014 to the then-NEOs vested. Of the equity awards granted to the then-NEOs in 2013 (for which the three-year performance period ended December 31, 2015), 12.6% were forfeited.2014 and 2013 Other Long-Term Equity Awards – CR (Combined Ratio) Awards. Except as described below, 20% of our 2014 and 2013 long-term equity awards to our then-NEOs were CR Awards similar to those granted in 2015 and described above. For equity awards granted in 2014 and 2013, vesting was contingent on the sum of the Expense Ratio and MGIC's Loss Ratio (the "combined ratio performance goal") being less than 40% and 50%, respectively. Mr. Mattke was not an NEO in 2013 and Messrs. Chi and Hughes were not NEOs in 2013 or 2014, therefore, this performance goal did not apply to the awards granted to them in those years.For 2015, the Expense Ratio was 14.9% and MGIC's Loss Ratio was 1.5%. Therefore, we met our combined ratio performance goal for each of the 2014 and 2013 CR Awards because the combined ratio was 16.4%, which is less than the combined ratio performance goal for each of those CR Awards and as a result, the portions of such awards that were scheduled to vest in February 2016 did vest. of this type are an important element of a competitive compensation program. These plans compute retirement benefits based only on current cash compensation (salary and annual bonus) and therefore do not include longer-term incentives that can result in substantial increases in pension value. We also offer a broad-based 401(k) plan to which we make contributions in cash. A description of our pension plan and the changes made to the pension plan effective January 2014, can be found following the table titled "Pension“Pension Benefits at 20152017 Fiscal Year-End"Year-End” in "Compensation“Compensation and Related Tables"Tables” below.As with prior years, 2015 perks we providedprovide to our NEOs were a small part of each officer's total compensation,are minimal, ranging between approximately $400 and $2,600 (excluding relocation expenses).from $800 to $4,800. The 20152017 perks included club dues and expenses, the costs associated with a medical examination that are not covered by our medical plan, a covered42 | MGIC Investment Corporation -2016 Proxy Statementrelocation expenses. We believespouse travel in connection with conferences attended by our perks are very modest and consistent with our desire to avoid an entitlement mentality.Although we are required by SEC rules to disclose payment of relocation expenses as a perk, we do not view such payment as an executive perk because our relocation program is a broad-based benefit plan available to a majority of employees and because the employee does not receive a personal benefit for the relocation expenses in the way he or she may for other perks.named executive officers, including our CEO and other NEOs do not have employment agreements other than those discussed below that become effective upon a change in control.restricted stock unitsRSUs scheduled to vest within one year (assuming ratable vesting over the performance period).meets his individualis in compliance with our stock ownership guideline.policy. The table below shows the revised guidelines, shares considered owned as of December 31, 20152017 for purposes of the revised guidelines, and the multiple of base salary represented by that ownership for Mr. Sinksour CEO and the average for all other NEOs. Actual Ownership as a Multiple of Base Salary Guideline
(# of shares) Actual
Ownership
(# of shares) As of 12/31/15 and at
12/31/15 closing price
per share As of 1/25/16 and at
1/25/16 closing price
per share 100,000 941,750 10.8 × salary 6.9 × salary 50,000 238,408 4.6 (wtd avg) × salary 3.0 (wtd avg) × salary Guideline
(value of shares)Actual Ownership
(value at 12/31/17)CEO $5,100,000 $17,125,632 20.1 x Total Other NEOs $6,650,700 $16,511,889 7.4 x and our chief accounting officer, must not be sold for one year after vesting. The number of shares that must not be sold is the lower of 25% of the shares that vested and 50% of the shares that were received by the officer after taking account of shares withheld to cover taxes. The holding period may end before one year if the officer is no longer required to report their equity transactions to the SEC. The holding period does not apply to involuntary transactions, such as would occur in a merger, and for certain other dispositions.nonethe last time any of our current or past NEOs had sold any of our stock while an NEO since April 2006.Pledging10b5-1 Plan Prohibitions and chief accounting officer may not enter into hedging transactions designed to hedge or offset a decrease inreferencing the value of the Company'sCompany’s equity securities. Forsecurities, which for these purposes the Company's equity securities include, but are not limited to, vested and unvested restricted stock unitsRSUs and company stock held directly or indirectly. Under our pledging policy, our directors, NEOs, other executive officers and chief accounting officerthose same individuals may not hold Company securities in a margin account or pledge Company securities as collateral for a loan.MGIC Investment Corporation -2016 Proxy Statement| 43Table Our insider trading policy prohibits the use by those individuals of Contents "Clawback"plans created pursuant to Rule 10b5-1 of the Securities Exchange Act which, for example, may otherwise have allowed such persons to sell our stock while in possession of material undisclosed unfavorable information about us."clawback"“clawback” policy, the Company will seek to recover from any NEO or other executive officer, to the extent the Committee deems appropriate, from any executive officer and the chief accounting officer, amounts associated with cash incentive compensation that was earned and equity awards that vested based on achievement of a performance goal if a subsequent financial restatement shows that such compensation should not have been paid.Retention considerations affected the Committee's decisions regarding the 2015 compensation we paid to our NEOs who were employed as of December 31, 2015. Our industry has undergone a fundamental shift following the mortgage crisis: long-standing competitors have gone out of business and the industry has three recent entrants, including two recently capitalized start-ups that are not encumbered with a portfolio of pre-financial crisis mortgages and one mortgage insurer where customer focus was significantly expanded following its acquisition by a worldwide insurer and reinsurer. Former executives from other mortgage insurers have joined the recent entrants. Our success depends, in large part, on the skills, working relationships and continued services of our management team and other key personnel. The unexpected loss of key personnel, whether to competitors or retirement, could adversely affect the conduct of our business. (Our reinsurance transactions recognize the importance of our NEOs by giving the reinsurers the right under certain circumstances to terminate the transactions if during any six month period two or more officers with positions of Executive Vice President or higher leave and their replacements are objected to by the reinsurers.) If we were to unexpectedly lose our key personnel, we may be required to search for and recruit other personnel to manage and operate the Company, and there can be no assurance that we would be able to employ a suitable replacement for the departing individuals, or that a replacement could be hired on terms that are favorable to us. Long-term equity award vesting over a three year period also serves as a meaningful retention tool. The Company currently has not entered into any employment agreements with our officers or key personnel other than those that become effective upon a change in control."KEESA"“KEESA”), as described in the section titled "Potential“Potential Payments Upon Termination or Change-in-Control – Change in Control Agreements"Agreements” below. No executive officer has an employment or severance agreement, other than these agreements.a KEESA. The period for which our KEESAs provide employment protection ends on the third anniversary of the date of a change in control. Our KEESAs provide for a cash termination payment in two lump sums (or one lump sum if neither the Company nor any affiliate'saffiliate’s stock is publicly traded) only after both a change in control and a specified employment termination (a “double trigger”). Our KEESAs provide for "double trigger"). Until we changed our KEESAs in 2014, they provided for vesting of all equity awards uponawards: there must be a change in control regardless of anyand an employment termination (a "single trigger"). In 2014, we adopted a double trigger for such vesting because we believe that double trigger agreements avoid payment of change in control vesting compensation to an executive whose employment circumstances have not materially changed despite the change in control. made in January 2016 under our new 2015 Omnibus Incentive Plan provide that the equity will not vest upon a change in control if the Committee reasonably determines in good faith prior to the occurrence of the change in control that the awards will be assumed or replaced by the employee'semployee’s employer immediately following the change in control with an alternative award meeting specified requirements. Our 2015 equity award agreements for awards made under our prior Plan provided that outstanding equity awards will automatically vest only upon a double trigger event and our prior equity award agreements provided that outstanding equity awards would become fully vested at the date of a change in control.were also modified in 2014 to remove thedo not contain a gross-up by the Company for any excise tax payments resulting from payments upon a change in control. For participants with KEESAs effective on or after October 23, 2014, and/or who have reached age 62, payments under the KEESAs, or under any other agreement with or plan of the Company, are capped by reducing such payments to an amount that will not trigger payment of federal excise taxes on such payment.44 | MGIC Investment Corporation -2016 Proxy Statement"Compensation“Compensation and Related Tables – Potential Payments Upon Termination or Change-in-Control – Change in Control Agreements"Agreements” below.Under certaingenerally disallows a tax deduction to public corporations for compensation in excess of $1 million paid during a year to anycertain covered executives. For 2017, our covered executives were Messrs. Sinks, Hughes, Lane and Mackey. For 2017, Section 162(m) generally exempted qualifying performance-based compensation from the $1 million annual deduction limit. The Committee considered the impact of the NEOs (other than the CFO)this Internal Revenue Code rule in developing, implementing and administering our compensation program for that year is not deductible.2017. Although the rules governing these requirementsallowing this exemption are complex, we believe that all of our compensation for 20152017 qualifies as tax-deductible.tax-deductible, with the exception of approximately 13% of our NEOs' 2017 bonuses. However, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and related regulations, and the fact that such regulations and interpretations may change from time to time (with potentially retroactive effect), there is no certainty that compensation intended by the Committee to satisfy the requirements for deductibility under Section 162(m) will be deductible. In addition,Committee may determinechanges made to administerCode Section 162(m) by the Tax Act, our number of covered executives will increase to include the four executives listed above, plus any executive who serves as our Chief Executive Officer or Chief Financial Officer at any time on or after January 1, 2018, or who is among our three most highly compensated officers other than the Chief Executive Officer and Chief Financial Officer for any year beginning with 2018. Also beginning in 2018, only qualifying performance-based compensation programsthat is paid pursuant to a binding contract in effect on November 2, 2017 will be exempt from the deduction limit. Accordingly, any compensation paid in the future pursuant to new compensation arrangements entered into after November 2, 2017, even if performance-based, will count toward the $1 million deduction limit if paid to a covered executive. The Committee will continue to consider the deductibility of compensation in a manner that does not satisfylight of the requirements ofrevisions to Code Section 162(m) by the Tax Act; however, the primary goals of the Internal Revenue Code in orderexecutive compensation program are to achieveattract and retain high-quality executives and to align compensation with long-term shareholder interests. As a result of the changes to Code Section 162(m), we expect the portion of 2018 compensation exceeding $1 million for income tax purposes that the Committee determineswe provide to our executive officers subject to such Section 162(m) will not be appropriate. if any, at its meeting in late January, which normally follows our announcement of earnings for the prior year. The Committee also may approve changes in compensation at other times throughout the year. Management Development, Nominating and Governance Committee assists the oversight by the Board of Directors of MGIC Investment Corporation'sCorporation’s executive compensation program, including approving corporate goals relating to compensation for the CEO and senior officers, evaluating the performance of the CEO and determining the CEO'sCEO’s annual compensation and approving compensation for MGIC Investment Corporation'sCorporation’s other senior executives.Corporation'sCorporation’s Proxy Statement for its 20162018 Annual Meeting of Shareholders and its Annual Report on Form 10-K for the year ending December 31, 2015.:
:Chairman
ChairDonald T. Nicolaisen
2018 Proxy StatementMGIC Investment Corporation -2016 Proxy Statement| 45named executive officersNEOs in 20132015 through 2015.2017. Other tables that follow provide more detail about the specific types of compensation.Name and
Principal Position Year Salary
($) Bonus(1)
($) Stock
Awards(2)
($) Non-Equity
Incentive Plan
Compensation(1)
($) Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings(3)
($) All Other
Compensation(4)
($) Total
($)
2015
769,331
-
3,143,000
2,200,000
455,612
14,600
6,582,543 2014 618,623 - 1,519,288 1,360,000 949,765 14,350 4,462,026 2013 600,639 1,025,000 556,600 - - 9,100 2,191,339
2015
464,231
-
1,077,600
1,096,900
101,070
14,600
2,754,401 2014 327,697 - 828,703 755,000 130,869 14,350 2,056,619
Senior Vice President – Info. Services
2015
303,923
-
395,120
440,600
147,744
14,600
1,301,987
Senior Vice President – Sales & Bus. Development
2015
257,381
-
395,120
448,700
88,843
46,139
1,236,183
2015
797,600
-
1,077,600
1,129,800
238,920
14,600
3,258,520 2014 774,362 - 828,703 1,200,000 717,037 14,350 3,534,452 2013 751,823 925,000 303,600 - - 9,100 1,989,523
2015
168,404
-
-
-
-
320,819
489,223 2014 966,354 - 2,417,050 2,900,000 1,733,450 14,350 8,031,204 2013 937,854 2,125,000 885,500 - 64,665 9,100 4,022,119 Name and
Principal PositionYear Salary
($)
($)
($)
($)
($)Total ($) 2017 843,000 2,532,961 2,065,500 1,577,483 14,850 7,033,794 President and Chief 2016 818,462 1,664,040 2,200,000 1,100,922 14,850 5,798,274 Executive Officer 2015 769,331 3,143,000 2,200,000 455,612 14,600 6,582,543 Timothy Mattke 2017 526,327 868,444 966,800 396,358 14,850 2,772,779 Executive Vice 2016 511,539 570,528 1,093,900 246,002 14,850 2,436,819 President and 2015 464,231 1,077,600 1,096,900 101,070 14,600 2,754,401 Chief Financial Officer 2017 365,081 868,444 729,000 469,507 14,850 2,446,882 Executive Vice 2016 268,477 219,155 460,000 289,428 16,128 1,253,188 President - Sales & 2015 257,381 395,120 448,700 88,843 46,139 1,236,183 Bus. Development Jeffrey Lane 2017 831,085 868,444 997,800 731,088 14,850 3,443,267 Executive Vice 2016 815,385 570,528 1,128,000 455,896 14,850 2,984,659 President and 2015 797,600 1,077,600 1,129,800 238,920 14,600 3,258,520 General Counsel 2017 447,373 868,444 801,500 52,884 24,050 2,194,251 Executive Vice 2016 434,846 570,528 837,000 30,094 10,600 1,883,068 President and Chief Risk Officer (1)Our 2015 bonus program is described in "Compensation Discussion and Analysis — Our 2015 Executive Compensation — Annual Bonus" above. The percentage of the maximum bonuses paid was calculated based on a formula which compares actual financial performance to threshold, target and maximum performance achievement levels for five different performance goals (each with specific weights and in total weighted 75%) and a subjective assessment of performance against four different business goals (each with the same weight and in total weighted 25%). Our 2014 bonus program was structurally similar to the 2015 bonus program. All goals for the 2015 and 2014 bonus programs were considered and approved by the Management Development, Nominating and Governance Committee. Because the 2015 and 2014 bonus programs were principally based on objective performance goals, the amounts earned are shown in the Non-Equity Incentive Plan Compensation column above.Our 2013 bonus program provided that if a performance target was met, then the Committee could exercise discretion to make a subjective determination of bonuses based on an assessment of several performance criteria. No specific targets or weightings were established for any of the bonus criteria for 2013, and the amounts earned are accordingly shown in the Bonus column above.(2)Our stock awards are granted under programs described in "Compensation Discussion and Analysis — Long-Term Equity Awards" above. The amounts shown in this column represent the grant date fair value of the restricted equity awards granted to named executive officers in the years shown, computed in accordance with FASB ASC Topic 718. The fair value of restricted equity is based on the closing price of our Common Stock on the New York Stock Exchange on the date of grant. The vesting of all of the awards represented in this column is subject to our meeting certain performance conditions. In accordance with the rules of the(1) 46 Our stock awards are granted under programs described in "Components of our Executive Compensation Program — 2017 Long-Term Equity Awards| MGIC Investment Corporation -” in our CD&A. The amounts shown in this column represent the grant date fair value of the restricted equity awards granted to named executive officers in the years shown, computed in accordance with FASB ASC Topic 718. The fair value of restricted equity is based on the closing price of our Common Stock on the New York Stock Exchange on the date of grant. The vesting of all of the awards represented in this column is subject to our meeting certain performance conditions. In accordance with the rules of the SEC, all of the figures in this column represent the value at the grant date based upon the probable outcome of the applicable performance conditions as of the grant date. If the full value of the applicable awards for 2017, 2016 Proxy Statementand 2015 were shown, assuming the highest levels of the applicable performance conditions were achieved, rather than an amount based upon the probable outcome of the applicable performance conditions, then the amounts shown would have been:SEC, all of the figures in this column represent the value at the grant date based upon the probable outcome of the applicable performance conditions as of the grant date. If the full value of the applicable awards for 2015, 2014 and 2013 were shown, assuming the highest levels of the applicable performance conditions were achieved, rather than an amount based upon the probable outcome of the applicable performance conditions, then the amounts shown would have been: Name 2015 2014 2013 $ 3,143,000 $ 1,854,600 $ 605,000 1,077,600 1,011,600 See Note (5) 395,120 See Note (5) See Note (5) 395,120 See Note (5) See Note (5) 1,077,600 1,011,600 330,000 - 2,950,500 962,500 Name 2017 2016 2015 Patrick Sinks $ 3,206,280 $ 1,981,000 $ 3,143,000 Timothy Mattke 1,099,296 679,200 1,077,600 James Hughes 1,099,296 249,040 395,120 Jeffrey Lane 1,099,296 679,200 1,077,600 Stephen Mackey 1,099,296 679,200 (3)The Company does not maintain a nonqualified deferred compensation plan for its employees. The amounts shown in this column reflect, if positive, the sum of (a) the aggregate change in present value of accumulated pension benefits during such year pursuant to our Pension Plan and our Supplemental Executive Retirement Plan ("SERP") when retirement benefits are also provided under the SERP, and (b) in-service distributions the named executive officer received from our SERP during the year. For 2015, such sum was negative $8,635,783 for Mr. Culver, as post-retirement distributions he received more than offset increases in the present value of accumulated pension benefits. For 2013, such sum was negative for: Mr. Sinks$38,279; and Mr. Lane — $69,159. COMPENSATION AND RELATED TABLES(2) (3) The Company does not maintain a nonqualified deferred compensation plan for its employees. The amounts shown in this column reflect, if positive, the sum of (a) the aggregate change in present value of accumulated pension benefits during the year pursuant to our Pension Plan and our Supplemental Executive Retirement Plan (“SERP”) when retirement benefits are also provided under the SERP, and (b) in-service distributions the named executive officer received from our SERP during the year. isrepresents:officer'sofficer’s employment with us ended on the last day of thatthe year shown, and (b) the same calculation done as if the officer'sofficer’s employment had ended one year earlier.• (in the retirement year of Mr. Culver, a partial year) of employment; (b) except for Mr. Culver in 2015, a change in actuarial assumptions used to calculate the benefit, primarily changes in the discount rate used to calculate the present value at the end of each of those years; (c) a decrease for the effect of distributions that the named executive officers received;NEOs received from our SERP; and (d) an increase for in-service distributions the named executive officer received from our SERP;SERP to pay their portion of social security taxes and (e) for Mr. Culver, the effects of the actual benefit elections made upon retirement.related income tax from such distributions. For each named executive officer,NEO, the change for 2015, 20142017, 2016 and 20132015 consists of: 2015 2014 2013 Name Change in
Actuarial
Assumptions Change Due
to Other
Factors Change in
Actuarial
Assumptions Change Due
to Other
Factors Change in
Actuarial
Assumptions Change Due
to Other
Factors $ (200,769 ) $ 656,381 $ 482,826 $ 466,939 $ (324,117 ) $ 285,838 (47,985 ) 149,055 71,878 59,291 See Note (5) See Note (5) (29,433 ) 177,177 See Note (5) See Note (5) See Note (5) See Note (5) (96,255 ) 185,098 See Note (5) See Note (5) See Note (5) See Note (5) (138,269 ) 377,189 405,696 311,341 (227,958 ) 158,799 - (8,635,783 ) 918,204 815,246 (608,358 ) $ 673,023 2017 2016 2015 Name Change in
Actuarial
AssumptionsChange Due to Other Factors Change in
Actuarial
AssumptionsChange Due to Other Factors Change in
Actuarial
AssumptionsChange Due to Other Factors Patrick Sinks $ 570,271 $ 1,007,212 $ 176,166 $ 924,756 $ (200,769 ) $ 656,381 Timothy Mattke 173,042 223,316 56,713 189,289 (47,985 ) 149,055 James Hughes 222,500 247,007 76,065 213,363 (96,255 ) 185,098 Jeffrey Lane 418,569 312,519 96,390 359,506 (138,269 ) 377,189 Stephen Mackey 6,401 46,483 (426 ) 30,520 1311 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ending December 31, 20152017 for additional information regarding the assumptions made in arriving at these amounts."Pension“Pension Benefits at 20152017 Fiscal Year-End"Year-End” below for a summary of our Pension Plan and our SERP.(4)Amounts in this column for 2015, other than for Messrs. Hughes and Culver, consist of matching 401(k) contributions and discretionary retirement plan contributions.Amounts in this column for 2015 for Mr. Hughes include the following: matching 401(k) contributions and discretionary retirement plan contributions — $14,600; parking subsidy; executive physical; relocation expenses in the amount of $26,767 and associated tax gross-up of $3,812 for taxable relocation amounts.Amounts in this column for 2015 for Mr. Culver include the following: matching 401(k) contributions and discretionary retirement plan contributions — $14,600; continued group health coverage to be provided until Mr. Culver reaches age 65 — $7,050; and(4) MGIC Investment Corporation -2016 Proxy Statement| 47Amounts in this column for 2017 consist of matching 401(k) contributions and discretionary retirement plan contributions.(5) Mr. Sinks assumed the position of Chief Executive Officer on March 1, 2015. His 2015 compensation generally represents a full year of compensation as CEO, with the exception of his January and February 2015 base salary, which he earned at a lower rate while President and Chief Operating Officer. (6) No compensation data is provided for the year prior to Mr. Mackey becoming an NEO. Mr. Hughes was an NEO in each of 2015 and 2017. compensation received for service as a director after he retired from his position as our CEO $299,169, which is composed of fees earned or paid in cash of $208,333 and stock awards of $90,836. The amount of the stock awards represents the grant date fair value, computed in accordance with FASB ASC Topic 718, of the pro rata share of the annual share unit award granted to non-management directors in 2015 under our Deferred Compensation Plan for Non-Employee Directors, such pro rata share based on the time in the settlement period that Mr. Culver served as a non-management director. The value of each share unit is equal to the value of our Common Stock on the grant date. See "Compensation of Directors — Deferred Compensation Plan and Annual Grant of Share Units" above for more information about these grants. In recognition of Mr. Culver's long-time service as our Chairman and Chief Executive Officer, we made a contribution of $100,000 to a charity that he designated. This contribution was not solicited by Mr. Culver, was not made under any agreement with Mr. Culver and is not included in the table.(5)No compensation data is provided for years prior to Messrs. Mattke, Chi and Hughes becoming a "named executive officer."(6)Mr. Culver retired in 2015.named executive officersNEOs in 2015.2017. Estimated Future
Payouts Under
Equity Incentive
Plan Awards Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1) Grant Date
Fair Value of
Stock and
Option Awards(2)
($) Name Type of Award Grant
Date Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#)
Other(3)
1/26/15
0
70,000
70,000
628,600 Performance Based(4) 1/26/15 0 1,440,000 2,400,000 0 280,000 280,000 2,514,400
Other(3)
1/26/15
0
24,000
24,000
215,520 Performance Based(4) 1/26/15 0 675,000 1,125,000 0 96,000 96,000 862,080
Other(3)
1/26/15
0
17,600
17,600
158,048 Performance Based(4) 1/26/15 0 330,480 550,800 0 26,400 26,400 237,072
Other(3)
1/26/15
0
17,600
17,600
158,048 Performance Based(4) 1/26/15 0 283,380 472,300 0 26,400 26,400 237,072
Other(3)
1/26/15
0
24,000
24,000
215,520 Performance Based(4) 1/26/15 0 679,050 1,131,750 0 96,000 96,000 862,080
Under Non-Equity Incentive
Plan Awards (1)
Under Equity Incentive
Plan Awards (2)
Fair Value
of
Stock Option Awards (3)
($)Name Grant Date Threshold
($)Target
($)Maximum
($)Threshold
(#)Target
(#)Maximum
(#)Patrick Sinks 1/23/2017 0 1,275,000 2,550,000 0 243,320 308,000 2,532,961 Timothy Mattke 1/23/2017 0 596,813 1,193,625 0 83,424 105,600 868,444 James Hughes 1/23/2017 0 450,000 900,000 0 83,424 105,600 868,444 Jeffrey Lane 1/23/2017 0 615,938 1,231,875 0 83,424 105,600 868,444 Stephen Mackey 1/23/2017 0 507,263 1,014,525 0 83,424 105,600 868,444 (1)Our Non-Equity Incentive Awards are described in "Annual Bonus" in our Compensation Discussion and Analysis above.(1) (2)All of the figures in this column represent the value of stock unit awards at the grant date based upon the probable outcome of the applicable performance conditions as of the grant date. The grant date fair value is based on the New York Stock Exchange closing price on the day the award was granted.(2) (3) All of the figures in this column represent the value of stock unit awards at the grant date based upon the probable outcome of the applicable performance conditions as of the grant date. The grant date fair value is based on the New York Stock Exchange closing price on the day the award was granted. (3)These are the CR Awards described in "2015 Other Long-Term– CR (Combined Ratio) Awards" in our Compensation Discussion and Analysis above.— COMPENSATION AND RELATED TABLES(4)For Equity Incentive Plan Awards, these are the BV Awards described in "2015 Other Long-Term Equity Awards – BV (Book Value) Awards" in our Compensation Discussion and Analysis above.48 | MGIC Investment Corporation -2016 Proxy Statement20152017 Fiscal Year-Endnamed executive officers'NEOs’ equity awards outstanding on December 31, 2015.2017. Equity Incentive Plan Awards Equity Incentive Plan Awards Name Number of Shares
or Units of Stock
That Have Not
Vested(1)
(#) Market Value of
Shares or Units of
Stock That Have
Not Vested(2)
($) Number of
Unearned Shares,
Units or
Other Rights That
Have Not Vested(3)
(#) Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested(2)
($) - - 570,002 5,033,118 675,921 9,537,245 5,868 51,814 204,283 1,803,819 231,744 3,269,908 17,602 155,426 61,531 543,319 9,600 84,768 53,563 472,961 151,293 2,134,744 - - 240,000 2,119,200 231,744 3,269,908 - - 350,001 3,090,509 Stephen Mackey 201,776 2,847,059 (1)Consists of restricted equity granted to Mr. Mattke in 2013 and to Messrs. Chi and Hughes in 2013 and 2014, prior to each of them becoming a named executive officer. The 2013 awards were granted on January 28, 2013, and the 2014 awards were granted on January 27, 2014. These awards vest in February in each of the first three years following the grant dates and are not subject to performance targets.(1) Consists of: (2)Based on the closing price of the Common Stock on the New York Stock Exchange at 2015 year-end, which was $8.83.(a) (b) Performance-based restricted equity granted January 26, 2015 (other than to Mr. Mackey); and January 25, 2016 that will vest in February or March in each of the first three years following the grant dates if we meet certain performance targets (with the vesting amounts, if any, dependent upon our performance). (3)Consists of:(a)Performance-based restricted equity granted January 28, 2013; January 27, 2014; and January 26, 2015 (other than to Mr. Culver) that will vest in February or March in each of the first three years following the grant dates if we meet certain performance targets (with the vesting amounts, if any, dependent upon our performance)."2015“Components of our Executive Compensation Program — 2016 and 2015 Performance-Based Long-Term Equity Awards – BV (Book Value) Awards"Awards” in our Compensation Discussion and Analysis above. The 2015 awards are reported in the table titled "2015 Grants of Plan-Based Awards" above. Vesting for the awards granted in 2014 and 2013 will occur based on achievement of three performance goals. The 2014 awards were similar to the 2013 awards, except that the threshold, target and maximum performance levels for each goal were changed for the 2014 awards. For more information, see "2014 and 2013 Performance-Based Long-Term Equity Awards – LEM (Loss Ratio, Expense Ratio, Market Share) Awards" in our Compensation Discussion and Analysis above.(b)Other restricted equity granted January 28, 2013 (other than to Messrs. Mattke, Chi and Hughes), January 27, 2014 (other than to Messrs. Chi and Hughes); and January 26, 2015 (other than to Mr. Culver); in each case, one-third of the units awarded will vest in February in each of the first three years following the grant dates if we meet certain performance targets.CD&A.The awards that do not vest in a particular year because actual performance is less than target performance in that year may vest in following years. See "2015 Other Long-Term Equity Awards – CR (Combined Ratio) Awards" and "2014 and 2013 Other Long-Term Equity Awards – CR (Combined Ratio) Awards" in our Compensation Discussion and Analysis above for information about vesting of these awards.(c) Other restricted equity granted January 26, 2015 (other than to Mr. Mackey); and January 25, 2016; in each case, one-third of the units awarded will vest in February in each of the first three years following the grant dates if we meet certain performance targets. (d) Other restricted equity granted July 22, 2015 to Mr. Mackey, one-third of which will vest in July in each of the first three years following the grant date if we meet certain performance targets. (2015)(2017), or if the payout is based on performance to occur over more than one year, the last completed fiscal years over which performance is measured.(4)Mr. Culver retired and was not granted restricted equity in 2015.(2) MGIC Investment Corporation -2016 Proxy Statement| 49Based on the closing price of the Common Stock on the New York Stock Exchange at 2017 year-end, which was $14.11.named executive officersNEOs in 2015.2017. There were no options exercised in 2015.2017. Stock Awards Name Number of Shares
Acquired on Vesting
(#) Value Realized
on Vesting(1)
($) Number of Shares Acquired on Vesting (#)
($) 208,247 1,900,102 282,094 3,040,242 64,843 591,911 110,208 1,187,777 63,954 585,309 27,105 247,595 30,894 337,393 113,234 1,033,178 110,208 1,187,777 331,899 3,028,337 Stephen Mackey 43,824 483,984 (1)Value realized is the market value at the close of business on the vesting date. None of our named executive officers sold any shares in 2015, though some shares that vested were withheld to pay taxes due as a result of the vesting of the shares.(1) Value realized is the market value at the close of business on the vesting date. None of our named executive officers sold any shares in 2017 though some shares that vested were withheld to pay taxes due as a result of the vesting of the shares. (2)Mr. Culver retired in 2015.20152017 Fiscal Year-Endnamed executive officersNEOs as of December 31, 2015.2017.Name Plan Name(1) Number of
Years Credited
Service
(#) Present Value of
Accumulated
Benefit(2)
($) Payments
During Last
Fiscal Year(3)
($) Qualified Pension Plan 37.4 2,512,094 - Supplemental Executive Retirement Plan 37.4 1,362,893 18,840 Qualified Pension Plan 9.6 269,635 - Supplemental Executive Retirement Plan 9.6 94,812 - Qualified Pension Plan 3.9 365,896 - Supplemental Executive Retirement Plan 3.9 97,098 - Qualified Pension Plan 28.3 1,220,379 - Supplemental Executive Retirement Plan 28.3 74,304 - Qualified Pension Plan 19.3 2,550,875 (4) - Supplemental Executive Retirement Plan 19.3 1,347,221 18,632 Qualified Pension Plan 32.4 - 2,548,365 Supplemental Executive Retirement Plan 32.4 - 7,305,162 Name Number of Years Credited Service
(#)
($)
($)Patrick Sinks Qualified Pension Plan 39.4 3,181,979 — Supplemental Executive Retirement Plan 39.4 3,371,413 26,392 Timothy Mattke Qualified Pension Plan 11.6 808,705 — Supplemental Executive Retirement Plan 11.6 198,102 — Jay Hughes Qualified Pension Plan 30.3 1,918,509 — Supplemental Executive Retirement Plan 30.3 135,109 — Qualified Pension Plan 21.3 2,743,986 — Supplemental Executive Retirement Plan 21.3 2,341,094 14,703 Stephen Mackey Qualified Pension Plan 2.5 52,063 — Supplemental Executive Retirement Plan 2.5 38,118 — (1)See below for a summary of these plans.(2)For all except Mr. Culver, the amount shown is the present value of the annual pension payments that the named executive officer would be entitled to receive beginning at age 62 (which is the earliest age that unreduced benefits under the Qualified Pension Plan and SERP may be received), or current age if older than 62, and continuing for his life expectancy determined at the end of 2015 and by assuming that the officer's employment with us ended on the last day of that year. See Note 13 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ending December 31, 2015 for the discount rate used to calculate the present value of benefits under these plans.(3)For Messrs. Sinks and Lane, the amounts shown in this column represent distribution amounts received from the MGIC SERP during the fiscal year ended December 31, 2015, to pay the employee portion of the Social Security tax attributable to benefits50 |(1) See below for a summary of these plans. (2) The amount shown in this column, for other than Mr. Mackey, is the present value of the annual pension payments that the named executive officer would be entitled to receive beginning at age 62 (which is the earliest age that unreduced benefits under the Qualified Pension Plan and SERP may be received), or current age if older than 62, and continuing for his life expectancy determined at the end of 2017 and by assuming that the officer’s employment with us ended on the last day of that year. See Note 11 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ending December 31, 2017 for the discount rate used to calculate the present value of benefits under these plans. The amount shown in this column for Mr. Mackey is the present value as of December 31, 2017 of the accumulated benefit under the "Cash Component" (described below) of our Pension Plan, assuming retirement at age 65 (the earliest age at which unreduced benefits may be received under the Cash Component of the Pension Plan). The amounts shown assume that each executive is 100% vested in his pension benefit; however, Mr. Mackey is 0% vested. (3) For Messrs. Sinks and Lane, the amounts shown in this column represent distribution amounts received from the MGIC Investment Corporation -2016 Proxy StatementSERP during the fiscal year ended December 31, 2017, to pay the employee portion of the Social Security tax attributable to benefits earned under the plan during fiscal year 2017, as well as amounts distributed to cover the income tax thereon.earned under the plan during fiscal year 2015, as well as amounts distributed to cover the income tax thereon. For Mr. Culver, the payment amounts represent the lump-sum payments paid during 2015 due to his retirement in 2015.(4)Includes an annual benefit of $34,000 credited to Mr. Lane as part of his initial employment. This amount represents $427,955 of the present value of Mr. Lane's benefits.(4) Includes an annual benefit of $34,000 credited to Mr. Lane as part of his initial employment. This amount represents $429,570 of the present value of Mr. Lane’s benefits. UnderAs described below, under the redesigned Pension Plan and SERP, employees hired after December 31, 2013 accrue retirement benefits under a cash balance formula (the "Cash“Cash Balance Component"Component”). Employees hired prior to January 1, 2014 continue to accrue benefits under the current Pension Plan design through December 31, 2018 (the "Prior“Prior Plan Component"Component”). Effective January 1, 2019, all participants will accrue benefits under the Cash Balance Component.2015,2017, the named executive officersNEOs (other than Mr. Mackey, who was hired in 2015) continued to accrue benefits under the Prior Plan Component. Under the Pension Plan and the SERP taken together within the Prior Plan Component, those executive officers each executive officer earnsearn an annual pension credit for each year of employment equal to 2% of the officer'sofficer’s eligible compensation for that year. Eligible compensation is limited to salaries, wages, cash bonuses (which for this purpose also includes payments listed in the Non-Equity Incentive Compensation Plan column in the Summary Compensation Table), and the portion of cash bonuses deferred and converted to restricted equity bonuses (applicable for bonuses for 1999 through 2006 performance). At retirement, the annual pension credits are added together to determine the employee'semployee’s accrued pension benefit. However, the annual pension credits for service prior to 1998 for each employee with at least five years of vested service on January 1, 1998 will generally be equal to 2% of the employee'semployee’s average eligible compensation for the five years ended December 31, 1997. Eligible employees with credited service for employment prior to October 31,named executive officersNEOs (other than Mr. Mackey) terminated effective December 31, 2015,2017, the annual amounts payable to them at age 62 (or current age if older than 62) under the Pension Plan and the SERP would have been Mr. Sinks – $210,000;$215,000; Mr. Mattke – $53,660; Mr. Chi – $6,958;$110,316; Mr. Hughes – $130,003;$157,752; and Mr. Lane – $210,000;$215,000 and the lump-sum payment for supplemental executive retirement benefits would have been: Mr. Sinks – $1,665,047;$3,413,423; Mr. Mattke – $275,752; Mr. Chi – $26,983;$404,924; Mr. Hughes – $115,677;$166,469; and Mr. Lane – $1,447,678.$2,295,086. As of December 31, 2015,2017, Mr. Lane was eligible to receive this level of benefit because he was over the age of 62 and had more than seven years'years’ tenure. As of December 31, 2015,2017, Messrs. Sinks, Mattke Chi and Hughes were each eligible to receive reduced benefits under these plans upon termination of employment. If their employment had been terminated effective December 31, 2015,2017, the annual amounts payable under these plans had each one elected to begin receiving annual payments immediately would have been: Mr. Sinks – $173,250;$203,175; Mr. Mattke – $6,156; Mr. Chi – $3,305;$14,784; and Mr. Hughes – $46,428; $98,592; and the lump-sum payment for supplemental executive retirement benefits would have been: Mr. Sinks – $1,459,247;$3,293,692; Mr. Mattke – $66,887; Mr. Chi – $15,920;$121,917; and Mr. Hughes – $59,917. Mr. Chi's benefits reflect that he was 20% vested in his pension benefits as of December 31, 2015.‑ $99,773. The discount rate and post-retirement mortality assumptions used to calculate the lump-sum payments differ from the factors used in our financial statements.MGIC Investment Corporation -2016 Proxy Statement| 51Change-in-ControlChange in Controlnamed executive officersNEOs assuming the triggering event or events indicated occurred on December 31, 2015.2017.Name Termination Scenario Total
($) Cash
Payment(1)
($) Value of
Restricted Equity
and Stock Options
that will Vest on
an Accelerated
Basis(2)
($) Value of
Restricted Equity
and Stock
Options Eligible
for Continued
Vesting(2)
($) Value of
Other
Benefits(3)
($) Change in control with qualifying termination 10,670,749 5,294,445 5,204,066 - 172,238 Change in control without qualifying termination 2,113,566 - 2,113,566 - - Death 5,204,066 - 5,204,066 - - Change in control with qualifying termination 4,743,883 2,742,668 1,857,329 - 143,886 Change in control without qualifying termination 797,729 - 797,729 - - Death 1,857,329 - 1,857,329 - - Change in control with qualifying termination 2,009,368 1,204,367 698,744 - 106,257 Change in control without qualifying termination 310,224 - 310,224 - - Death 698,744 - 698,744 - - Change in control with qualifying termination 1,521,882 845,492 557,729 - 118,661 Change in control without qualifying termination 169,209 - 169,209 - - Death 557,729 - 557,729 - - Change in control with qualifying termination 5,268,285 2,901,878 2,212,445 - 153,962 Change in control without qualifying termination 1,152,845 - 1,152,845 - - Retirement 1,152,845 - - 1,152,845 - Death 2,212,445 - 2,212,445 - - Name Termination Scenario Patrick Sinks Change in control with qualifying termination 15,369,790 5,675,439 9,537,245 — 157,106 Change in control without qualifying termination — — — — — Death 9,537,245 — 9,537,245 — — Timothy
MattkeChange in control with qualifying termination 6,364,803 2,945,476 3,269,908 — 149,419 Change in control without qualifying termination — — — — — Death 3,269,908 — 3,269,908 — — James Hughes Change in control with qualifying termination 1,948,711 — 1,948,704 — 7 Change in control without qualifying termination — — — — — Death 2,134,744 — 2,134,744 — — Jeffrey Lane Change in control with qualifying termination 6,595,240 3,170,012 3,269,908 — 155,320 Change in control without qualifying termination — — — — — Retirement 1,779,892 — — 1,779,892 — Death 3,269,908 — 3,269,908 — — Stephen Mackey Change in control in qualifying termination 1,977,727 — 1,977,714 — 13 Change in control without qualifying termination — — — — — Death 2,847,059 — 2,847,059 — — (1)As described further in "Change in Control Agreements" below, each of our current named executive officers is a party to a Key Executive Employment and Severance Agreement ("KEESA") that may provide for payments after a change in control. A qualifying termination is a termination within three years after the change in control by the Company other than for cause, death or disability or by the executive for good reason. Amounts are payable in one or two lump sums, depending on limits on amounts that may be paid within six months under applicable tax rules and regulations. The first lump sum is payable within 10 business days after the termination date and the second lump sum, if required by applicable tax rules and regulations, is payable six months thereafter.(1) cash payments under the KEESAs were capped by reducing such payments to an amount that will not trigger payment of federal excise taxes on such payment. For KEESA participants who are younger than age 62 and or whose KEESAs are dated on or before October 22, 2014, cash payments under the KEESAs are similarly reduced only if the resulting after-tax value to the participant of the total payments52 | MGIC Investment Corporation -2016 Proxy StatementThe reductionsCash payments were reduced as follows: Mr. ChiHughes — $290,934;$2,208,388; Mr. Lane — $1,428,309; and Mr. Mackey — $2,514,000. Other benefits were reduced as follows: Mr. Hughes — $438,001;$136,363; and Mr. LaneMackey — $1,510,921.$130,647. The value of equity that would vest on an accelerated basis was reduced as follows: Mr. Hughes — $186,040 (or 13,185 restricted stock units); and Mr. Mackey — $869,345 (or 61,612 restricted stock units). No reduction has been made for Mr. Sinks or Mr. Mattke.(2)The value attributed to restricted stock that accelerates or is eligible for continued vesting is calculated using the closing price on the New York Stock Exchange on December 31, 2015 (which is a higher valuation than that specified by IRS regulations for tax purposes). The accelerated vesting occurs as a result of the terms of the restricted stock award, not under the KEESA.(3)In connection with Upon a change in control otherwith a qualifying termination, Mr. Mackey, because he is not fully vested in all accrued benefits include three yearsunder our defined contribution retirement plan, would be entitled to a lump sum payment in an amount equal to the difference between the fully vested amount of healthhis account balance under such plan at the termination date and the vested amount of such balance at such time. A portion of that payment would be subject to the reduction described above.(2) The value attributed to restricted stock that accelerates or is eligible for continued vesting is calculated using the closing price on the New York Stock Exchange on December 31, 2017 (which is a higher valuation than that specified by IRS regulations for tax purposes). The accelerated vesting occurs as a result of the terms of the restricted stock award, not under the KEESA. (3) In connection with a change in control, other benefits include three years of health and welfare benefits, outplacement costs, and an allowance for tax, legal and accounting fees. outplacement costs, andfor an allowance for tax, legal and accounting fees.NEO upon retirement, please see the Pension Benefits Table.Key Executive Employment and Severance Agreement: Each of our named executive officers is a party to a Key Executive Employment and Severance Agreement with us (a "KEESA").: Each of our NEOs is a party to a KEESA. If a change in control occurs and the executive'sexecutive’s employment is terminated within three years after the change in control (this period is referred to as the employment period), other than for cause, death or disability, or if the executive terminates his employment for good reason, the executive is entitled to receive a termination payment of twice the sum of his annual base salary, his maximum bonus award and an amount for pension accruals and profit sharing and matching contributions to our tax-qualifiedtax‑qualified defined contribution plan, subject to reduction as described below. This termination payment is payable in one or two lump sums, depending on limits on amounts that may be paid within six months under applicable tax rules and regulations. The first lump sum is payable within 10 business days after the termination date and the second lump sum, if required by applicable tax rules and regulations, is payable six months thereafter."cause"“cause” to terminate an executive under a KEESA if the executive were intentionally to engage in certain bad faith conduct causing demonstrable and serious financial injury to us; to be convicted of certain felonies; or to willfully, unreasonably and continuously refuse to perform his or her existing duties or responsibilities. An executive would have "good reason"“good reason” under his or her KEESA if we were to breach the terms of the KEESA or make certain changes to the executive'sexecutive’s position or working conditions.stock-basedstock‑based compensation to executives of its U.S. companies of comparable rank, this type of benefit need not be provided and the 75% minimum for other benefits is raised to 100%. If the executive experiences a qualified termination, he is entitled to continued life and health insurance for the remainder of the employment period or, if earlier, the time he obtains similar coverage from a new employer, outplacement services and up to a total of $10,000 to cover tax preparation, legal and accounting services relating to the KEESA termination payment.MGIC Investment Corporation -2016 Proxy Statement| 53:: In general, our restricted equity awards are forfeited upon a termination of employment, other than as a result of the award recipient'srecipient’s death (in which case the entire award vests). In general, if employment termination occurs after age 62 for a recipient who has been employed by us for at least seven years, awards granted at least one year prior to the date of the employment termination will continue to vest if the recipient enters into a non-competition agreement with us. One of our current NEOs is 62 or older.beforein January 2015 providedprovide for accelerated vesting only upon a double trigger event. Our equity awards granted after January 2015 provide that the equity will not vest upon a change in control.:: Although we do not have a written severance policy for terminations of employment unrelated to a change in control, we have historically negotiated severance arrangements with officers whose employment we terminate without cause. The amount that we have paid has varied based upon the officer'sofficer’s tenure and position.$ 139,118 $ 7,052,026 1:51 "Senior“Senior Financial Officers,"” executive officers, or their respective immediate family members have a material personal financial interest (either directly or through a company with which the officer has a relationship) unless all of the following conditions are satisfied:·arm'sarm’s length and are not detrimental to our interests;··officer'sofficer’s immediate family has a financial interest in such counterparty that has a value of at least 10% of the value of such counterparty. Our Audit Committee does not consider payments and benefits arising in the ordinary course of employment with us, or through services as a director, to be "transactions"“transactions” subject to its approval.director'sdirector’s immediate family, other than transactions involving the provision of goods or services in the ordinary course of business of both parties. The Code contemplates that our non-management directors will disclose all transactions between us and parties related to the director, even if they are in the ordinary course of business.2015,2017, Foley & Lardner was paid $506,671$299,773 by us and our consolidated subsidiaries for legal services and in the first twothree months of 2016,2018, it was paid an additional $55,705.$72,218. Our Audit Committee has been advised by our General Counsel that his wife does not have a material interest in Foley & Lardner.2015.
2017.54 | MGIC Investment Corporation -2016 Proxy Statement—– APPROVAL OF OUR AMENDED AND RESTATED RIGHTS AGREEMENTwill ask ourare asking shareholders to approve the Amended and Restated2018 Rights Agreement, by and between the Company and Wells Fargo Bank, National Association, dated July 23, 2015 (the "Rights Agreement"). The Rights Agreementwhich is attached to this Proxy Statement as Appendix A.C. our shareholders do not approve the 2018 Rights Agreement at the Annual Meeting, our Board of Directors intends to redeem the 2015 Rights or otherwise render them ineffective promptly after the certification of the vote.Prior to the Board of Directors' approval of the Rights Agreement on July 23, 2015, the Company had in place a rights agreement dated July 25, 2012, as amended through March 11, 2013 (the "2012 Rights Agreement"). The 2012 Rights Agreement was approved by shareholders in 2013. The 2012 Rights Agreement was scheduled to expire by its terms on August 1, 2015. On July 23, 2015, theOur Board of Directors approved amendments to the 20122018 Rights Agreement by approving the Rights Agreement.Our Board of Directors adopted the Rights Agreement in an effort to continue to protect shareholder value by preservingdiminishing the Company'srisk that the Company’s ability to use its net operating losses ("NOLs"(“NOLs”) from limitation or lossto reduce potential future federal income taxes will become substantially limited and by deterring certain abusive takeover practices.and 2015; however,through 2017, but we still have a substantial amount of NOLs remaining. The amount of NOLs remaining at the end of the 2015 year, after taking into account all currently available carrybacks of2017 was approximately $742.1 million. Our NOLs into prior years, is approximately $1.9 billion. Weare a substantial benefit to us because we can use these NOLs in certain circumstancesgenerally carry them forward to offset any current and futurepost-2017 taxable income, and, thus reducereducing our federal income tax liability. Applicable tax law, subjectshowever, limits our ability to take advantage ofcarryforward these NOLs to certain requirements and restrictions. Toif we experience the extent that the NOLs are not otherwise limited, we believe that we will be able to carry forward a significant amount of NOLs and that these NOLs could be a substantial asset to us. substantially limited, and the timing of the usage of the NOLs could be substantially delayed, if we were to experience an "ownership change" as defined in Section 382 of the Internal Revenue Code ("Section 382"). If an "ownership change" were to occur, the amount of the Company's income in a subsequent year that could be offset by carryforwards of NOLs that arose before the "ownership change," or by losses that are recognized after the ownership change but that were economically accrued prior to the "ownership change," would be subject to limitation. In general, the annual limit is obtained by multiplying (i) the aggregate value of our outstanding equity immediately prior to the "ownership change" (reduced by certain capital contributions made during the immediately preceding two years and certain other items) by (ii) the federal long-term tax-exempt interest rate applicable to the month of the "ownership change." In applying this annual limit, numerous special rules and limitations apply. If we were to experience an "ownership change" at our current stock price levels, we believe we would be subject to an annual NOL limitation that couldwould accelerate payment of federal income tax that would have otherwise been offset by the NOL and result in a material amount of NOLs expiring unused and that could result in a significantan impairment to any NOL assets the Company maywould have at that time.Although any NOL carryforwards that are not used in a given taxable year as a result of a Section 382 limitation would remain available to offset income in future years (again, subject to the Section 382 limitation) until the NOL carryforwards expire, any "ownership change" could significantly defer the utilization of the NOL carryforwards and cause some of the NOL carryforwards to expire unused, and could accelerate payment of federal income tax. Because the aggregate value of our outstanding stock and the federal long-term tax-exempt interest rate fluctuate, it is impossible to predict with any accuracy the annual limitation upon the amount of our taxable income that could be offset by such NOL carryforwards were an "ownership change" to occur during the term of the 2018 Rights Agreement, but we believe such limitation would be material.MGIC Investment Corporation -2016 Proxy Statement| 55····· that we have experienced an "ownership change," but calculating whether an "ownership change" has occurred is subject to inherent uncertainty. This uncertainty results from the complexity and ambiguity of the Section 382 provisions, as well as limitations on the knowledge that any publicly traded company can have about the ownership of, and transactions in, its securities.56 | MGIC Investment Corporation -2016 Proxy Statementundesirableunfair takeover tactics, such as:·acquiring stock for the purpose of forcing a sale of the Company at a price that is more than the average cost of the investor's position, but less than a fair price to shareholders;···because it:·Diminishesbecause:tax obligations maytaxes would become substantially limited if the Company were to experience an "ownership change," with the result that its utilization of loss carryforwards couldwould be deferred, and its payment of federal income tax couldwould be accelerated and some of the NOLs may expire unused.accelerated.·Encourages·Does pursuant to a previous rights agreement, the Board declared a dividend of one common share purchase right (a "Right") for each outstanding share of common stock, $1.00 par value (the "Common Shares"), of the Company.Company and adopted our initial shareholder rights agreement. The dividend was payable on August 9, 1999 to the shareholders of record on that date (the "Record Date"). On July 7, 2009, our Board amended the previousthis rights agreement and adopted an amended and restated rights agreement (the "2009 Rights Agreement") in an effort to protect shareholder value by attempting to diminishdiminishing the risk that the Company's ability to use its NOLs to reduce potential future federal income tax obligations may become substantially limited and by deterring certain abusive takeover practices. The 2009 Rights Agreement was subsequently amended, including by the adoption of the 20122015 Rights Agreement. The only material amendmentsamendment made to the 20122015 RightsMGIC Investment Corporation -2016 Proxy Statement| 57extendedwas an extension of the expiration date untilfrom August 1, 2018 from Augustto March 1, 2015, and increased the exercise price from $14 to $45.Rights.Rights. The Rights will initially trade with, and will be inseparable from, the Common Shares. The Rights are evidenced only by certificates that represent Common Shares (or by notations in book entry accounts). New Rights will accompany any new Common Shares we issue until the Distribution Date described below or until the Rights are redeemed or the 2018 Rights Agreement expires.Price.Price. Each Right will allow its holder to purchase from our Company one-tenth of one Common Share for $45.00 per full Common Share (equivalent to $4.50 for each one-tenth of a Common Share), once the Rights become exercisable. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.Exercisability.58 │ MGIC Investment Corporation – 2018 Proxy Statementi.the Company, its subsidiaries and certain benefit plans of the Company and its subsidiaries;ii.any of certain "grandfathered" persons ("Grandfathered Persons") that would have otherwise been Acquiring Persons as of the close of business on July 7, 2009;iii.an "Exempt Person," which is any person who delivers to the Company a letter that, as determined by the Company in its sole discretion, is substantially in the form as specified in the Rights Agreement or is an affiliate or associate of another person who delivers such a letter to the Company and whose beneficial ownership of 5.0% or more of the outstanding Common Shares would not, as determined either (1) prior to the person becoming the beneficial owner of 5.0% or more of the Common Shares or (2) if the Company determines that such Person (by itself or together with its affiliates and associates) had inadvertently become a beneficial owner of 5.0% or more of the Common Shares, then after the time such person becomes the beneficial owner of 5.0% or more of the Common Shares), by the Company in its sole discretion, jeopardize or endanger the availability to the Company of the net operating loss carryovers, other tax carryovers and tax benefits of the Company and its subsidiaries within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the "Tax Benefits");provided that such person shall not qualify for this exception unless and until it, or its affiliate or associate who delivers the aforementioned letter, has received written notice of such determination by the Company;provided, further, that such person will lose this exemption from being an Acquiring Person from such time (if any) as (A) in respect of the aforementioned letter that such person, or its affiliate or associate, delivered, a representation or warranty of such person, or its affiliate or associate, in such letter was not true and correct when made, a representation or warranty of such person, or its affiliate or associate, in such letter that was to remain true and correct after the date of the letter as contemplated therein ceases to remain true and correct or such person, or its affiliate or associate, ceases to comply with a covenant contained in such letter or (B) such person becomes the beneficial owner of 10.0% or more of the Common Shares then outstanding;iv.any person who or which the Company determines, in its sole discretion, has inadvertently become a beneficial owner of 5.0% or more of the Common Shares then outstanding (or has inadvertently failed to continue to qualify as a Grandfathered Person or Exempt Person), provided such person promptly enters into, and delivers to the Company, an irrevocable commitment to divest or cause its affiliates and associates to divest promptly (A) if the Person delivers the required representation letter and requests a determination that it is an Exempt Person, then the time, if any, upon which the Company informs the58 | MGIC Investment Corporation -2016 Proxy Statementi. the Company, its subsidiaries and certain benefit plans of the Company and its subsidiaries;Person of its adverse determination with respect to such a request (with no divestiture being required if the Person is determined to be an Exempt Person), or (B) if the Person does not both deliver the required representation letter and request a determination that it is an Exempt Person, then the time of such commitment, and thereafter such person or its affiliates and associates promptly divest to the extent and promptly after the time specified by clause (A) or (B) above (without exercising or retaining any power, including voting, with respect to such Common Stock), sufficient Common Shares so that the percentage stock ownership of such person and its affiliates and associates is less than 5.0% (or, in the case of any person who or which has inadvertently failed to continue to qualify as a Grandfathered Person or an Exempt Person, the Common Shares that caused such person to so fail to qualify as a Grandfathered Person or an Exempt Person, as the case may be); andv.ii. any of certain "grandfathered" persons ("Grandfathered Persons") that would have otherwise been Acquiring Persons as of the close of business on July 7, 2009; iii. an "Exempt Person," which is any person who delivers to the Company a letter that, as determined by the Company in its sole discretion, is substantially in the form as specified in the 2018 Rights Agreement or is an affiliate or associate of another person who delivers such a letter to the Company and whose beneficial ownership of 5.0% or more of the outstanding Common Shares would not, as determined either (1) prior to the person becoming the beneficial owner of 5.0% or more of the Common Shares or (2) if the Company determines that such Person (by itself or together with its affiliates and associates) had inadvertently become a beneficial owner of 5.0% or more of the Common Shares, then after the time such person becomes the beneficial owner of 5.0% or more of the Common Shares), by the Company in its sole discretion, jeopardize or endanger the availability to the Company of the net operating loss carryovers, other tax carryovers and tax benefits of the Company and its subsidiaries within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the "Tax Benefits"); provided that such person shall not qualify for this exception unless and until it, or its affiliate or associate who delivers the aforementioned letter, has received written notice of such determination by the Company; provided, further, that such person will lose this exemption from being an Acquiring Person from such time (if any) as (A) in respect of the aforementioned letter that such person, or its affiliate or associate, delivered, a representation or warranty of such person, or its affiliate or associate, in such letter was not true and correct when made, a representation or warranty of such person, or its affiliate or associate, in such letter that was to remain true and correct after the date of the letter as contemplated therein ceases to remain true and correct or such person, or its affiliate or associate, ceases to comply with a covenant contained in such letter or (B) such person becomes the beneficial owner of 10.0% or more of the Common Shares then outstanding; iv. any person who or which the Company determines, in its sole discretion, has inadvertently become a beneficial owner of 5.0% or more of the Common Shares then outstanding (or has inadvertently failed to continue to qualify as a Grandfathered Person or Exempt Person), provided such person promptly enters into, and delivers to the Company, an irrevocable commitment to divest or cause its affiliates and associates to divest promptly (A) if the Person delivers the required representation letter and requests a determination that it is an Exempt Person, then the time, if any, upon which the Company informs the Person of its adverse determination with respect to such a request (with no divestiture being required if the Person is determined to be an Exempt Person), or (B) if the Person does not both deliver the required representation letter and request a determination that it is an Exempt Person, then the time of such commitment, and thereafter such person or its affiliates and associates promptly divest to the extent and promptly after the time specified by clause (A) or (B) above (without exercising or retaining any power, including voting, with respect to such Common Stock), sufficient Common Shares so that the percentage stock ownership of such person and its affiliates and associates is less than 5.0% (or, in the case of any person who or which has inadvertently failed to continue to qualify as a Grandfathered Person or an Exempt Person, the Common Shares that caused such person to so fail to qualify as a Grandfathered Person or an Exempt Person, as the case may be); and v. any person who becomes a beneficial owner of 5.0% or more of the Common Shares then outstanding (or has failed to continue to qualify as a Grandfathered Person or an Exempt Person) as a result of one or more transactions that the Board determines, in its sole discretion and on such terms and conditions as the Board determines, in its sole discretion and on such terms and conditions as the BoardIn.In. If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person may, for $45.00, purchase Common Shares with a market value of $90.00, based on the market price of the Common Shares prior to such acquisition.Expiration.Expiration Subject to extension as provided under. If the 2018 Rights Agreement is approved by shareholders, the Rights will expire on the earliest to occur of (i) AugustMarch 1, 20182020 (the "Final Expiration Date"); (ii) the time at which the Rights are redeemed as provided in the 2018 Rights Agreement; (iii) the time at which the Rights are exchanged as provided in the 2018 Rights Agreement; (iv) the repeal of Section 382 if the Board determines that the 2018 Rights Agreement is no longer necessary for the preservation of the Tax Benefits that would have been affected by such section; and (v) the beginning of a taxable year of the Company to which the Board determines that no Tax Benefits may be carried forward.Redemption.Redemption. Our Board may redeem the Rights for $0.001 per Right at any time before any person or group becomes an Acquiring Person. If our Board redeems any Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of Rights will be to receive the redemption price of $0.001 per Right. The redemption price will be adjusted if we have a stock split or stock dividends of our Common Shares.Exchange.Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of our outstanding Common Shares, our Board may extinguish the Rights by exchanging one Common Share or an equivalent security for each Right, other than Rights held by the Acquiring Person.Shares.Shares. No fractional Common Shares will be issued in connection with the exercise or exchange of Rights. In lieu of issuing fractional Common Shares equal to one-half of a Common Share or less upon the exercise of Rights, the Company will pay cash with an equivalent value based on the market price of the Common Shares on the last trading day prior to the date of exercise. No Rights may be exercised that would entitle the holder thereof to any fractional Common Share greater than one-half of a Common Share unless concurrently therewith such holder purchases an additional fraction of a Common Share which when added to the number of Common Shares to beMGIC Investment Corporation -2016 Proxy Statement| 59Provisions.Provisions. The Purchase Price payable, and the number of Common Shares or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Common Shares, (ii) upon the grant to holders of the Common Shares of certain rights or warrants to subscribe for or purchase Common Shares at a price, or securities convertible into Common Shares with a conversion price, less than the then current market price of the Common Shares or (iii) upon the distribution to holders of the Common Shares of evidences of indebtedness or assets (excluding regular quarterly cash dividends or dividends payable in Common Shares) or of subscription rights or warrants (other than those referred to above).Amendments.60 │ MGIC Investment Corporation – 2018 Proxy Statementexcept that frombut the Board may not extend the Final Expiration Date or make certain related amendments without the approval of a majority of the votes of our Common Shares cast on such matter at a meeting of shareholders. From and after the Distribution Date no such amendment may reduce the Redemption Price, move to an earlier date the Final Expiration Date or adversely affect the interests of the holders of the Rights.A.Uncertain.Uncertain. Our use of our NOL carryforwards depends on our ability to generate taxable income in the future. Although we have earned taxable income in each of 2014 through 2017, and 2015,the first quarter of 2018, we cannot assure you that we will have taxable income in any applicable period or, if we do, whether such income or the NOL carryforwards at such time will exceed any potential Section 382 limitation.Carryforwards.Carryforwards. We have been audited by the Internal Revenue Service ("IRS") for 2009 through 2012. The amount of our NOL carryforward arising after 2012 has not been audited or otherwise validated by the IRS. The IRS could challenge the amount of the NOLs, which could result in an increase in our liability in the future for income taxes. In addition, determining whether an "ownership change" has occurred is subject to uncertainty, as discussed above under "Section 382 Ownership Calculations." Therefore, we cannot assure you that the IRS or other taxing authority will not claim that we experienced an "ownership change" and attempt to reduce the benefit of the NOL carryforwards even if the 2018 Rights Agreement is in place.Change.Change. Although the 2018 Rights Agreement is intended to diminish the likelihood of an "ownership change," we cannot assure you that it will be effective. The amount by which our ownership may change in the future could, for example, be affected by purchases and sales of stock by 5-percent shareholders and the conversion of our outstanding convertible subordinated debentures and convertible notes, over which we have no control, and new issuances of stock by us, should we choose to do so.Liquidity.Liquidity. The 2018 Rights Agreement is intended to deter persons or groups of persons from acquiring beneficial ownership of shares of our stock in excess of the specified limitations. A shareholder's ability to dispose of our stock may be limited if the 2018 Rights Agreement reduces the number of persons willing to acquire our stock or the amount they are willing to acquire.60 | MGIC Investment Corporation -2016 Proxy StatementValue.Value. The 2018 Rights Agreement could negatively impact the value of our stock by deterring persons or groups of persons from acquiring shares of our stock, including in acquisitions for which some shareholders might receive a premium above market value.Effect.Effect. The 2018 Rights Agreement has an "anti-takeover effect" because it will deter a person or group of persons from acquiring beneficial ownership of 5% or more of our stock or, in the case of persons that already own 5% or more of our stock, from acquiring any additional shares of our stock, unless such person or group becomes an Exempt Person, in which case the beneficial ownership deterrence threshold will be 10%. The 2018 Rights Agreement could discourage or prevent a merger, tender offer, proxy contest or accumulations of substantial blocks of shares.Amended and Restated2018 Rights Agreement will be approved by the affirmative vote of a majority of the votes cast on this matter. Abstentions and broker non-votes will not be counted as "votes cast."YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDEDAND RESTATED RIGHTS AGREEMENT. SIGNED PROXY CARDS AND VOTING INSTRUCTIONFORMS WILL BE VOTED FOR APPROVAL UNLESS A SHAREHOLDER GIVES OTHERINSTRUCTIONS ON THE PROXY CARD OR VOTING INSTRUCTION FORM.Corporation'sCorporation’s financial statements, the effectiveness of its system of internal controls, the qualifications, independence and performance of its independent accountants, the performance of its internal audit function, and its compliance with legal and regulatory requirements.("PwC"(“PwC”), MGIC Investment Corporation'sCorporation’s independent registered public accounting firm, its audited financial statements for the year ended December 31, 2015.2017. The Audit Committee discussed with PwC the matters required to be discussed by applicable requirements of the Public Company Accounting Oversight Board ("PCAOB"(“PCAOB”). The Audit Committee also received the written disclosures and the letter from PwC required by applicable requirements of the PCAOB regarding auditor-audit committee communications about independence and discussed with PwC their independence from MGIC Investment Corporation and its management.Corporation'sCorporation’s audited financial statements be included in its Annual Report on Form 10-K for the year ended December 31, 2015,2017, which has been filed with the SEC. These are the same financial statements that appear in MGIC Investment Corporation'sCorporation’s Annual Report to Shareholders.Committee:
Committee:Chairman
Chair
2018 Proxy StatementMGIC Investment Corporation -2016 Proxy Statement| 61Table of Contents—– RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM("PwC"(“PwC”) as our independent registered public accounting firm for the year ending December 31, 2015.2018. As a matter of good corporate governance, the Board is seeking shareholder ratification of the appointment even though ratification is not legally required. If shareholders do not ratify this appointment, the Audit Committee will take this into consideration in its future selection of an independent registered public accounting firm. A representative of PwC is expected to attend the Annual Meeting and will be given an opportunity to make a statement and respond to appropriate questions.In PwC's engagement letter, we expect that we and PwC will agree not to demand a trial by jury in any action, proceeding or counterclaim arising out of or relating to PwC's services and fees for the engagement. We also expect that we will agree that we will not, directly or indirectly, agree to assign or transfer any rights, obligations, claims or proceeds from claims against PwC arising under the engagement letter to anyone. We further expect that the engagement letter will not contain a requirement that we arbitrate any disputes with PwC nor any limitation on our right to damages from PwC.20152017 and 2014,2016, PwC billed us fees for services of the following types: 2015 2014 2017 2016 2,206,264 $ 2,200,000 2,200,000 2,135,000 35,500 9,505 — 149,838 37,000 33,839 35,784 36,074 2,970 3,010 104,945 89,970
2,281,734
$
2,246,354
2,340,729 2,410,882 PwC'sPwC’s review of our quarterly financial statements and audit of our year-end financial statements and internal controls over financial reporting. Audit-Related Fees for 20152016 represent fees related to Puerto Rico tax filing assistance and for 2014 represent fees related to an external peer review of the actuarial calculations done with respect to our Australian operations.debt issuance procedures performed. Tax Fees include a review of our tax returns. All Other Fees arefor 2017 and 2016 include a SOC 2 report (SOC is an abbreviation for Service Organization Controls) and subscription fees for an online library of financial reporting and assurance literature.Committee'sCommittee’s policy regarding pre-approval of audit and allowable non-audit services to be provided by the independent auditor includes a list of services that are pre-approved as they become necessary and the Committee'sCommittee’s approving of a schedule of other services expected to be performed during the ensuing year prior to the start of the annual audit engagement. If we desire the auditor to provide a service that is not in either category, the service may be presented for pre-approval by the Committee at its next meeting or may be pre-approved by the Chairperson (or another Committee member designated by the Chairperson)Committee). The Committee member approving the service will be given detail regarding the service equivalent to the detail that would be given to the Committee, and the Committee will be notified of the approved service at its next regularly scheduled meeting. We periodically provide the Committee with information about fees paid for services that have been approved and pre-approved. The Audit Committee pre-approved all of the services that PwC provided in 2015.62 | MGIC Investment Corporation -2016 Proxy Statement
2017.YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FORRATIFICATION OF THE APPOINTMENT OF PWC AS OUR INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRM. PROXY CARDS AND VOTING INSTRUCTION FORMS WILLBE VOTED FOR RATIFICATION UNLESS A SHAREHOLDER GIVES OTHER INSTRUCTIONSON THE PROXY CARD OR VOTING INSTRUCTION FORM."street name"“street name” and is not a shareholder of record may deliver only one copy of this Proxy Statement and the Annual Report to Shareholders to multiple shareholders who share the same address, unless that broker, bank or other nominee has received contrary instructions from one or more of the shareholders. We will deliver promptly, upon written or oral request, a separate copy of this Proxy Statement and the Annual Report to Shareholders to a shareholder at a shared address to which a single copy of the document was delivered. A shareholder who wishes to receive a separate copy of the Proxy Statement and Annual Report to Shareholders, now or in the future, should submit a request to MGIC by telephone at (414) 347-6480 or by submitting a written request to Investor Relations, MGIC Investment Corporation, P.O. Box 488, MGIC Plaza, Milwaukee, WI 53201. Beneficial owners sharing an address who are receiving multiple copies of the Proxy Statement and Annual Report to Shareholders and wish to receive a single copy of such materials in the future will need to contact their broker, bank or other nominee to request that only a single copy be mailed to all shareholders at the shared address in the future.Term DescriptionBenchmarking Peer Group / Benchmarking Peers 14-company peer group used by the Committee to benchmark 2017 executive compensation. CD&A Compensation Discussion & Analysis. Combined Ratio The sum of the Loss Ratio and Expense Ratio. Committee The Management Development, Nominating and Governance Committee of our Board. Compensation Consultant Frederic W. Cook & Co., the Committee’s independent compensation consultant. DTA Deferred tax assets. EVP Executive Vice President. Expense Ratio Combined insurance operations underwriting expenses divided by net premiums written for the year. Loss Ratio Direct (before reinsurance) incurred losses divided by direct earned premiums, in both cases for our MGIC Investment Corporation -subsidiary's primary new insurance written for the year; incurred losses exclude the effect of losses incurred on notices of default that have not yet been reported to us, which is commonly known as "IBNR."MGIC Our wholly-owned subsidiary, Mortgage Guaranty Insurance Corporation. Named Executive Officers Our chief executive officer, our chief financial officer and our three other most highly compensated executive officers. The NEOs are the officers listed in the SCT. NEOs Named Executive Officers. ROE Return on Equity. Unless otherwise indicated, ROE is calculated as GAAP after-tax net income divided by beginning of the year shareholders' equity. RSUs Restricted Stock Units. SCT Tax Act The U.S. tax reform enacted on December 22, 2017 and commonly referred to as the "Tax Cuts and Jobs Act." TDC Total direct compensation, which consists of base salary, bonus (or non-equity incentive compensation) and equity awards (valued at their grant date value reported in the SCT). TSR Total shareholder return. (1) 2016 Proxy StatementThe recognition of net realized investment gains or losses can vary significantly across periods as the timing of individual securities sales is highly discretionary and is influenced by such factors as market opportunities, our tax and capital profile, and overall market cycles.(2) |Gains and losses on debt extinguishment. 63Gains and losses on debt extinguishment result from discretionary activities that are undertaken to enhance our capital position, improve our debt profile, and/or reduce potential dilution from our outstanding convertible debt.(3) (4) Table Years Ended December 31, 2017 2016 2015 (In thousands) Pre-tax Tax provision (benefit) Net (after-tax) Pre-tax Tax provision (benefit) Net (after-tax) Pre-tax Tax provision (benefit) Net (after-tax) Income before tax / Net income $ 784,496 $ 428,735 $ 355,761 514,714 172,197 342,517 487,687 (684,313 ) 1,172,000 Adjustments: Additional income tax provision related to the rate decrease included in the Tax Act — (132,999 ) 132,999 — — — — — — Additional income tax provision related to IRS litigation — (29,039 ) 29,039 — (731 ) 731 — (580 ) 580 Net realized investment gains (249 ) (87 ) (162 ) (8,932 ) (3,126 ) (5,806 ) (28,361 ) (9,926 ) (18,435 ) Loss on debt extinguishment 65 23 42 90,531 31,686 58,845 507 177 330 Effect of change in deferred tax asset valuation allowance — — — — — — — 847,810 (847,810 ) Adjusted pre-tax operating income / Adjusted net operating income $ 784,312 $ 266,633 $ 517,679 $ 596,313 $ 200,026 $ 396,287 $ 459,833 $ 153,168 $ 306,665 Years Ended December 31, 2017 2,016 2015 Weighted average diluted shares outstanding 394,766 431,992 468,039 Net income per diluted share $ 0.95 $ 0.86 $ 2.60 Additional income tax provision related to the rate decrease included in the Tax Act 0.34 — — Additional income tax provision related to IRS litigation 0.07 — — Net realized investment gains — (0.01 ) (0.04 ) Loss on debt extinguishment — 0.14 — Effect of change in deferred tax asset valuation allowance — — (1.81 ) Adjusted net operating income per diluted share $ 1.36 $ 0.99 $ 0.75 Contents (In thousands, except per share amounts) 2017 2016 Shareholders' Equity (Book Value) $ 3,154,526 $ 2,548,842 Divided by Shares Outstanding 370,567 340,663 Book Value per Share $ 8.51 $ 7.48 Adjusted Book Value for 2017 Equity Awards (from below) $ 3,349,765 $ 2,623,942 Divided by Shares Outstanding 370,567 340,663 Adjusted Book Value per Share for 2017 Equity Awards $ 9.04 $ 7.70 Shareholders' Equity (Book Value) $ 3,154,526 $ 2,548,842 Impact of Conversion of 2020 Convertible Debt 42 — Litigation Accruals 29,039 Accumulated Other Comprehensive Loss ("AOCL") 43,783 75,100 Effects of Tax Law and Change in Accounting Principle 122,375 — Adjusted Book Value for 2017 Equity Awards $ 3,349,765 $ 2,623,942 (In thousands, except per share amounts) 2017 2016 2015 Shareholders' Equity (Book Value) $ 3,154,526 $ 2,548,842 $ 2,236,140 Divided by Shares Outstanding 370,567 340,663 339,657 Book Value per Share $ 8.51 $ 7.48 $ 6.58 Adjusted Book Value for 2016 Equity Awards (from below) $ 3,120,776 $ 2,623,942 $ 2,297,020 Divided by Adjusted Shares Outstanding (from below) 341,444 340,663 339,657 Adjusted Book Value per Share for 2016 Equity Awards $ 9.14 $ 7.70 $ 6.76 Shares Outstanding 370,567 340,663 339,657 Impact of Conversion of 2020 Convertible Debt (29,123 ) — — Adjusted Shares Outstanding 341,444 340,663 339,657 Shareholders' Equity (Book Value) $ 3,154,526 $ 2,548,842 $ 2,236,140 Impact of Conversion of 2020 Convertible Debt (199,908 ) — — Accumulated Other Comprehensive Loss ("AOCL") 43,783 75,100 60,880 Effects of Tax Law and Change in Accounting Principle 122,375 — — Adjusted Book Value for 2016 Equity Awards $ 3,120,776 $ 2,623,942 $ 2,297,020 (In thousands, except per share amounts) 2017 2016 2015 Shareholders' Equity (Book Value) $ 3,154,526 $ 2,548,842 $ 2,236,140 Divided by Shares Outstanding 370,567 340,663 339,657 Book Value per Share $ 8.51 $ 7.48 $ 6.58 Adjusted Book Value for 2015 Equity Awards (from below) $ 2,953,304 $ 2,016,287 $ 1,534,940 Divided by Shares Outstanding 370,567 340,663 339,657 Adjusted Book Value per Share for 2015 Equity Awards $ 7.97 $ 5.92 $ 4.52 Shareholders' Equity (Book Value) $ 3,154,526 $ 2,548,842 $ 2,236,140 Accumulated Other Comprehensive Loss ("AOCL") 43,783 75,100 60,880 Effects of Tax Law and Change in Accounting Principle 122,375 — — DTA (367,380 ) (607,655 ) (762,080 ) Adjusted Book Value for 2015 Equity Awards $ 2,953,304 $ 2,016,287 $ 1,534,940 AMGIC INVESTMENT CORPORATIONandWELLS FARGO BANK, NATIONAL ASSOCIATIONRights Agent79101111121216 [Reserved]17171718181819192021 Redemption21 Exchange2223 Notices23Appendix A-i24 Successors2424 Severability2424 Counterparts242425 Book-Entry2525 - - Exhibit C Appendix A-ii("Agreement"(“Agreement”), is dated as of July23, 2015,April 26, 2018 and effective as of August 1, 2018, betweenMGIC INVESTMENT CORPORATION, a Wisconsin corporation (the "Company"“Company”), andEQUINITI TRUST COMPANY, organized under New York law, as successor rights agent (the “Rights Agent”) to WELLS FARGO BANK, NATIONAL ASSOCIATION,, a national banking association (the "Rights"Original Rights Agent")."Original“Original Rights Agreement"Agreement”), declared a dividend of one common share purchase right (a "Right"“Right”) for each Common Share (as hereinafter defined) outstanding upon the close of business on August 9, 1999 (the "Record Date"“Record Date”) payable on such date, and authorized the issuance of one Right for each Common Share issued between the Record Date and the earliest of certain dates specified in the Original Rights Agreement, each Right, as of March 4, 2013, representing the right to purchase one-tenth of one Common Share, upon the terms and subject to the conditions set forth in the Original Rights Agreement; and"2009“2009 Rights Agreement"Agreement”); and"2012“2012 Rights Agreement"Agreement”); and��the Company and the Original Rights Agent amended and restated the 2012 Rights Agreement by entering into an Amended and Restated Rights Agreement dated as of July 23, 2015 (the “2015 Rights Agreement”); and"ownership“ownership change,"” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"“Code”), then its ability to use its Tax Benefits (as hereinafter defined) for U.S. federal income tax purposes could be substantially limited; andCompany'sCompany’s Tax Benefits on the terms and conditions set forth herein.20122015 Rights Agreement effective as of August 1, 2018 to provide as follows:.. For purposes of this Agreement, the following terms have the meanings indicated: "2009“2009 Amendment Effective Time"Time” means the close of business on July 7, 2009. "2017 Note Adjustment Events" means an increase pursuant to the terms of the 2017 Notes in the number of Common Shares that are deliverable on conversion of the 2017 Notes. Changes in the average price per Common Share that affect the number of Common Shares deliverable on conversion of the 2017 Notes shall be considered adjustments under the immediately preceding sentence. (c) "2017 Notes" means the Company's 5% Convertible Senior Notes due 2017. (d) "2020 Note Adjustment Events" means an increase pursuant to the terms of the 2020 Notes in the number of Common Shares that are deliverable on conversion of the 2020 Notes. Changes in the average price per Common Share that affect the number of Common Shares deliverable on conversion of the 2020 Notes shall be considered adjustments under the immediately preceding sentence. (e) "2020 Notes" means the Company's 2% Convertible Senior Notes due 2020.Appendix A-1 (f) "2063“2063 Debenture Adjustment Events"Events” means each of (i) effective as of each date on which the interest so deferred would have been due and payable in the absence of such deferral, the Company deferring the payment of interest on the 2063 Debentures, (ii) effective as of each date on which such compounded interest accrues, the accrual of compounded interest on account of such a deferral, and (iii) an increase pursuant to the terms of the 2063 Debentures in the number of Common Shares that are deliverable on conversion of the 2063 Debentures. Changes in the average price per Common Share that affect the number of Common Shares deliverable on conversion of the 2063 Debentures shall be considered adjustments under the immediately preceding clause (iii). (g) Debentures"Debentures” means the Company'sCompany’s 9% Convertible Junior Subordinated Debentures due 2063. (h) "Acquiring Person"1(h)1(d), (C) as a Grandfathered Person pursuant to subsection (u)(q)(ii) of this Section 1, or (D) in the case of any Person who was a Grandfathered Person pursuant to subsection (u)(q)(i) of this Section 1, as a Grandfathered Person pursuant to subsection (u)(q)(ii) of this Section 1, which shall be applied to such Person as if the Percentage Stock Ownership of such Person at the 2009 Amendment Effective Time had been less than 5.0%;1(q)1(m) and requests a determination of the Company pursuant to clause (ii) of Section 1(q)1(m), then the time, if any, upon which the Company informs the Person of its adverse determination with respect to such a request (with no divestiture being required if the Person is determined to be an Exempt Person), or (B) if the Person does not both deliver a representation letter pursuant to clause (i) of Section 1(q)1(m) and request a determination of the Company pursuant to clause (ii) of Section 1(q)1(m), then the time of such commitment, and thereafter such Person or its Affiliates and Associates divest to the extent and promptly after the time specified by the foregoing clause (A) or (B) (without exercising or retaining any power, including voting power, with respect to such Common Shares (or other securities the beneficial ownership of which by a Person also results in such Person beneficially owning Common Shares)) sufficient Common Shares (or other securities the beneficial ownership of which by a Person also results in such Person beneficially owning Common Shares) so that such Person'sPerson’s Percentage Stock Ownership is less than 5.0% (or, in the case of any Person who or which has inadvertently failed to continue to qualify as a Grandfathered Person or Exempt Person, Common Shares (or other securities the beneficial ownership of which by a Person also results in such Person beneficially owning Common Shares) in an amount sufficient to reduce such Person'sPerson’s beneficial ownership of Common Shares by the number of Common Shares that caused such Person to so fail to qualify as a Grandfathered Person or Exempt Person, as the case may be); provided further that any such Person shall cease to qualify for the exclusion from the definition of "Acquiring Person"“Acquiring Person” contained in this subsection (iv) from and after such time (if any) as the Person, together with its Affiliates and Associates,Appendix A-2
and(r)(n) of this Section 1 with respect to such transaction(s); provided that if the Percentage Stock Ownership of any Person that had qualified for the exemption under this subsection (v) ceases to be at least 5.0%, then such Person shall not be deemed to be an Acquiring Person until such later time (if any) as the Percentage Stock Ownership of such Person is 5.0% or more, and then only if such Person does not qualify (I) as an Exempt Person, (II) for the exception in subsection (iv) of this Section 1(h)1(d), (III) as a Grandfathered Person pursuant to subsection (u)(q)(ii) of this Section 1, or (IV) for an additional exception under this subsection (v).1(h)1(d), then such officers shall promptly notify the Board of such determination. Notwithstanding the foregoing, a failure to promptly make such a notification shall not impact the effectiveness of such determination. (i) "Affiliate"(e)“Affiliate” and "Associate"“Associate” shall have the respective meanings ascribed to such terms in Rule 12b-212b‑2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”), as in effect on the date of this Agreement and, to the extent not included within the foregoing provisions of this Section 1(i)1(e), shall also include, with respect to any Person, any other Person whose Common Shares are treated, for purposes of Section 382 of the Code and the Treasury Regulations thereunder, as being (i) owned by such first Person (or by a Person or group of Persons to which the Common Shares owned by such first Person are attributed pursuant to Treasury Regulation Section 1.382-2T(h)), or (ii) owned by the same "entity"“entity” (as defined in the second sentence of Treasury Regulation Section 1.382-3(a)(1)(i)) as is deemed to own the Common Shares owned by such first Person;provided, however, that a Person shall not be deemed to be an Affiliate or Associate of another Person solely because either or both Persons are or were directors or officers of the Company. (j) "Beneficial Owner"“Beneficial Owner” of, and shall be deemed to "beneficially“beneficially own,"” any securities:Person'sPerson’s Affiliates or Associates beneficially owns, directly or indirectly;Person'sPerson’s Affiliates or Associates, directly or indirectly, has the right or the obligation to acquire (whether such right is exercisable, or such obligation is required to be performed, immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, warrants, options, or other rights (in each case, other than upon exercise or exchange of the Rights);provided,however, that a Person shall not be deemed a Beneficial Owner of, or to beneficially own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person'sPerson’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange;Appendix A-3Person'sPerson’s Affiliates or Associates, directly or indirectly, has or shares the right to vote or dispose of, or has "beneficial ownership"“beneficial ownership” (as defined under Rule 13d-3 of the General Rules and Regulations under the Exchange Act) of, including pursuant to any agreement, arrangement or understanding (whether or not in writing); or1(j)1(f) or any of such Person'sPerson’s Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) with such other Person (or any of such other Person'sPerson’s Affiliates or Associates) with respect to acquiring, holding, voting or disposing of any securities of the Company;1(j)1(f) shall not be applied to cause a Person to be deemed a "Beneficial Owner"“Beneficial Owner” of, or to "beneficially“beneficially own,"” any security (A) solely because such Person has the right to vote suchPerson'sPerson’s status as a "clearing“clearing agency,"” as defined in Section 3(a)(23) of the Exchange Act;provided further, that nothing in this Section 1(j)1(f) shall cause a Person engaged in business as an underwriter of securities or member of a selling group to be a Beneficial Owner of, or to "beneficially“beneficially own,"” any securities acquired through such Person'sPerson’s participation in good faith in an underwriting syndicate until the expiration of 40 calendar days after the date of such acquisition, or such later date as the directors of the Company may determine in any specific case;provided further, that the transfer of beneficial ownership of Common Shares to any Person without any consideration for such transfer being given by such Person shall not result in such Person becoming a Beneficial Owner of any additional Common Shares until the Person accepts such transfer;provided further, that a Person shall not be deemed to be a "Beneficial Owner"“Beneficial Owner” of, or to "beneficially“beneficially own,"” any Common Shares that would be issuable upon conversion of 2063 Debentures as a result of deferred interest, including compounded interest, accrued with respect to 2063 Debentures that are beneficially owned (and not yet converted) by such Person. For the avoidance of doubt, it is understood that the exception in this Section 1(j)1(f) in the final proviso of the immediately preceding sentence does not apply to Common Shares attributable to deferred interest on 2063 Debentures that are delivered and beneficially owned on conversion of 2063 Debentures. Notwithstanding anything herein to the contrary, to the extent not within the foregoing provisions of this Section 1(j)1(f), a Person shall be deemed a "Beneficial Owner"“Beneficial Owner” of, and shall be deemed to "beneficially own"“beneficially own” or have "beneficial ownership"“beneficial ownership” of, any securities that are owned by another Person and that are treated, for purposes of Section 382 of the Code and the Treasury Regulations thereunder, as being (x) owned by such first Person (or by a Person or group of Persons to which the securities owned by such first Person are attributed pursuant to Treasury Regulation Section 1.382-2T(h)), or (y) owned by the same "entity"“entity” (as defined in the second sentence of Treasury Regulation Section 1.382-3(a)(1)(i)) as is deemed to own the securities owned by such first Person. (k) "Board" (l) "Business Day" (m) "close(i)“close of business"business” on any given date shall mean 5:00 P.M., Milwaukee, Wisconsin time, on such date;provided,however, that if such date is not a Business Day it shall mean 5:00 P.M., Milwaukee, Wisconsin time, on the next succeeding Business Day. (n) "Common Shares" (o) "Distribution Date" (p) "Exchange Act"Table of Contents(m) (q) "Exempt Person"“Exempt Person” means any Person (i) who (A) delivers to the Company a letter that, as determined by the Company in its sole discretion, is substantially in the form attached hereto as Exhibit C or (B) is an Affiliate or Associate of another Person who delivers to the Company a letter described in clause (i)(A) and (ii) whose beneficial ownership of 5.0% or more of the outstanding Common Shares would not, as determined (either (1) prior to the time such Person becomes the Beneficial Owner of 5.0% or more of the Common Shares then outstanding or (2) if the Company determines pursuant to Section 1(h)1(d)(iv) that such Person (by itself or together with its Affiliates and Associates) had inadvertently become a Beneficial Owner of 5.0% or more of the Common Shares then outstanding, then after the time such Person becomes the Beneficial Owner of 5.0% or more of the Common Shares then outstanding) by the Company in its sole discretion, jeopardize or endanger the availability to the Company of the Tax Benefits; provided that such Person shall not be an Exempt Person unless and until it, or its Affiliate or Associate who delivers a letter described in clause (i), has received written notice of such determination by the Company under this clause (ii); provided further that such Person shall cease to be an Exempt Person from and after the earlier of such time (if any) as (I) in respect of the letter that such Person, or its Affiliate or Associate, delivered pursuant to clause (i), a representation or warranty of such Person, or its Affiliate or Associate, in such letter was not true and correct when made, a representation2017 Note Adjustment Events or 2020 Note Adjustment Events during the period in which the 2063 Debentures the 2017 Notes or the 2020 Notes are beneficially owned by such Person. Notwithstanding the foregoing, a Grandfathered Person shall not be precluded from becoming an Exempt Person (as defined in the preceding sentence, giving effect to this sentence) prior to the time at which such Grandfathered Person would otherwise become an Acquiring Person.1(h)1(d) such Person shall be deemed to have become, as of the time the Person ceased to qualify as an Exempt Person, a Beneficial Owner of the Common Shares that such Person and such Person'sPerson’s Affiliates and Associates then beneficially own. For the avoidance of doubt, it is understood that the qualifications and exceptions in this Section 1(q)1(m) with respect to 2063 Debenture Adjustment Events, 2017 Note Adjustment Events and 2020 Note Adjustment Events do not apply to Common Shares attributable to 2063 Debenture Adjustment Events 2017 Note Adjustments Events or 2020 Note Adjustment Events that are delivered and beneficially owned on conversion of 2063 Debentures, 2017 Notes or 2020 Notes. (r) "Exempt Transaction"Debentures. (s) "Expiration Date""Redemption Date"“Redemption Date”); (iii) the time at which the Rights are exchanged as provided in Section 24 hereof; (iv) the repeal of Section 382 of the Code if the Board determines that this Agreement is no longer necessary for the preservation of the Tax Benefits; and (v) the beginning of a taxable year of the Company to which the Board determines that no Tax Benefits may be carried forward. (t) "FinalDate"Date” means the close of business on AugustMarch 1, 2018. (u) "Grandfathered Person"2020."Acquiring Person"“Acquiring Person” (as defined in the Original Rights Agreement) immediately prior to the 2009 Amendment Effective Time and who at the 2009 Amendment Effective Time is a Beneficial Owner of 5.0% or more of the Common Shares outstanding at the 2009 Amendment Effective Time; provided that any such Person shall cease to be a Grandfathered Person from and after such time (if any) as the Person'sPerson’s Percentage Stock Ownership shall be increased from suchAppendix A-5Person's Person’s lowest Percentage Stock Ownership at or after the 2009 Amendment Effective Time, other than any increase pursuant to or as a result of (A) an acquisition of Common Shares by the Company and/or (B) such Person becoming the Beneficial Owner of additional Common Shares due solely to (x) such Person beneficially owning 2063 Debentures immediately prior to the 2009 Amendment Effective Time and (y) during the period thereafter in which the 2063 Debentures then beneficially owned continue to be beneficially owned by such Person, the occurrence of one or more 2063 Debenture Adjustment Events; and2017 Note Adjustment Events or 2020 Note Adjustment Events during the period in which 2063 Debentures 2017 Notes or 2020 Notes are beneficially owned by such Person; provided that any such Person shall cease to be a Grandfathered Person from and after such time (if any) as the Person'sPerson’s Percentage Stock Ownership shall be increased from such Person'sPerson’s lowest Percentage Stock Ownership on or after the date of the first occurrence of any event described in clause (I) or (II), other than any increase pursuant to or as a result of (A) an acquisition of Common Shares by the Company and/or (B) such Person becoming the Beneficial Owner of additional2017 Note Adjustment Events or 2020 Note Adjustment Events during the period in which 2063 Debentures 2017 Notes or 2020 Notes are beneficially owned by such Person.1(h)1(d) such Person and such Person'sPerson’s Affiliates and Associates shall be deemed to have become, as of the time the Person ceased to qualify as a Grandfathered Person, a Beneficial Owner of the Common Shares that such Person and such Person'sPerson’s Affiliates and Associates then beneficially own. For the avoidance of doubt, it is understood that the qualifications and exceptions in subsections (u)(q)(i) and (ii) of this Section 1 with respect to 2063 Debenture Adjustment Events do not apply to Common Shares attributable to 2063 Debenture Adjustment Events that are delivered and beneficially owned on conversion of 2063 Debentures and with respect to 2017 Note Adjustment Events or 2020 Note Adjustment Events do not apply to Common Shares attributable to 2017 Note Adjustment Events or 2020 Note Adjustment Events that are delivered and beneficially owned on conversion of 2017 Notes or 2020 Notes. (v) "PercentageDebentures.Ownership"Ownership” of a Person means the percentage calculated by dividing (i) the number of Common Shares as to which the Person, together with its Affiliates and Associates, is a Beneficial Owner, divided by (ii) the number of Common Shares then outstanding. (w) "Person""coordinated acquisition"“coordinated acquisition” of shares or otherwise treated as an entity within the meaning of Treasury Regulation Section 1.382-3(a)(1)(i) and shall include any successor (by merger or otherwise) of any such entity. (x) "Redemption Date"(s)(o) of this Section 1. (y) "Related Person" (z) "Securities Act"Table of Contents(w) (aa) "Shares“Shares Acquisition Date"Date” means (i) the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed or amended pursuant to Section 13(d) under the Exchange Act, but not a report filed or amended pursuant to Rule 13f-1 of the General Rules and Regulations under the Exchange Act) by the Company or a Person or an Affiliate of the Person that the Person has become an Acquiring Person or (ii) if earlier, the first date the Board concludes that a Person has become an Acquiring Person. (bb) "Subsidiary" (cc) "Tax Benefits""net“net unrealized built-in loss"loss” within the meaning of Section 382 of the Code, of the Company or any of its Subsidiaries. (dd) "Treasury Regulation".. The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Shares) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-rightsco‑rights agents as it may deem necessary or desirable.Company'sCompany’s Board of Directors prior to such time as any Person becomes an Acquiring Person) after the date that a tender or exchange offer is first published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act if, upon consummation thereof, the Person publishing, sending or giving such tender or exchange offer would become an Acquiring Person (the earlier of such dates being herein referred to as the "Distribution Date"“Distribution Date”), (x) the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for Common Shares registered in the names of the holders thereof (which certificates shall also be deemed to be Right Certificates) and not by separate Right Certificates (or, for shares participating in the direct registration system, by notations in the respective book entry accounts for the Common Stock), and (y) the right to receive Right Certificates will be transferable only in connection with the transfer of Common Shares;provided, however, that if a tender or exchange offer is terminated prior to the occurrence of a Distribution Date, then no Distribution Date shall occur as a result of such tender or exchange offer. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will, if requested, send) by first-class,first‑class, insured, postage-prepaidpostage‑prepaid mail, to each record holder of Common Shares as of the close of business on the Distribution Date, at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit A hereto (a "Right Certificate"“Right Certificate”), evidencing one Right for each Common Share of the Company so held. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates."Summary“Summary of Rights"Rights”), a copy of which is available free of charge from the Company. With respect to certificates for Common Shares outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof. Until the Distribution Date (or the Expiration Date, if earlier), the surrender for transfer of any certificate for Common Shares outstanding on the Record Date, with or without a copy of the Summary of Rights attached thereto, shall also constitute the transfer of the Rights associated with the Common Shares represented thereby.Appendix A-7 (c) Certificates for Common Shares that become outstanding (including, without limitation, certificates for reacquired Common Shares referred to in the last sentence of this paragraph (c) and certificates issued on the transfer of Common Shares) after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them a legend in substantially the following form (provided, however, that certificates for Common Shares in existence on the date of this Agreement may bear the legend required by the Original Rights Agreement, the 2009 Rights Agreement, or the 2012 Rights Agreement or the 2015 Rights Agreement, as applicable):Wells Fargo Bank, National Association,Equiniti Trust Company, dated as of July 23, 2015,April 26, 2018 and effective as of August 1, 2018, and as such agreement may be amended (the "Rights Agreement"“Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of MGIC Investment Corporation. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. MGIC Investment Corporation will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor. Under certain circumstances set forth in the Rights Agreement, Rights issued to, or beneficially owned by, an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether beneficially owned by such person or any subsequent holder, shall become null and void... The Right Certificates (and the forms of election to purchase Common Shares and of assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit A hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any applicable rule or regulation made pursuant thereto or with any applicable rule or regulation of any stock exchange or the Financial Industry Regulatory Authority, or to conform to usage. Subject to the provisions of Section 22 hereof, the Right Certificates shall entitle the holders thereof to purchase such number of Common Shares as shall be set forth therein at the purchase price per Common Share set forth therein, but the amount and type of securities purchasable upon exercise of each Right and such purchase price shall be subject to adjustment as provided herein (such purchase price, as so adjusted, the "Purchase Price"“Purchase Price”).Company'sCompany’s seal or a facsimile thereof, and shall be attested by the Treasurer, an AssistantAppendix A-8Company'sCompany’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.Appendix A-9Table of Contentscashier'scashier’s check, bank draft or money order payable to the order of the Company, except that, if so provided by the Board, the payment of the Purchase Price following the occurrence of a Section 11(a)(ii) Event (as hereinafter defined) may be made wholly or in part by delivery of a certificate or certificates (with appropriate stock powers executed in blank attached thereto) evidencing a number of Common Shares equal to the then Purchase Price divided by the closing price (as determined pursuant to Section 11(d) hereof) per Common Share on the Trading Day (as such term is hereinafter defined) immediately preceding the date of such exercise. If the Company is obligated to issue other securities of the Company, pay cash and/or distribute other property pursuant to Section 11(a) hereof, the Company will make allholder'sholder’s duly authorized assigns, subject to the provisions of Section 14 hereof.Appendix A-10Table of Contents.. All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or if surrendered to the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Rights Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. Subject to applicable law and regulation, the Rights Agent shall maintain in a retrievable database electronic records of all cancelled or destroyed Right Certificates that have been canceled or destroyed by the Rights Agent. The Rights Agent shall maintain such electronic records or physical records for the time period required by applicable law and regulation. Upon written request of the Company (and at the expense of the Company), the Rights Agent shall provide to the Company or its designee copies of such electronic records or physical records relating to Rights Certificates cancelled or destroyed by the Rights Agent.Company'sCompany’s reasonable satisfaction that no such tax is due.Appendix A-11.. Each Person in whose name any certificate for Common Shares is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Common Shares represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made;provided,however, that if the date of such surrender and payment is a date upon which the Common Shares transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Common Shares transfer books of the Company are open... The Purchase Price, the number of Common Shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. (i)"Section“Section 11(a)(ii) Event"Event”), each holder of a Right shall thereafter"Adjustment Shares"“Adjustment Shares”).Appendix A-12 (ii)"Current Value"“Current Value”) over (2) the Purchase Price payable with respect to such Right (such excess, the "Spread"“Spread”), and (B) with respect to each Right (subject to the second paragraph of Section 11(a)(ii)), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock, if any, which the Board has deemed to have the same value as Common Shares and which, in the written opinion of counsel addressed to such Board, may be issued without violating the representation in the sixth paragraph under the caption "Amendment“Amendment of Articles of Incorporation to Authorize Preferred Stock"Stock” in the Company'sCompany’s Proxy Statement for its 1998 Annual Meeting of Shareholders (such shares of preferred stock, hereinafter referred to as "common“common stock equivalents"equivalents”)), (4) debt securities of the Company, (5) other assets or (6) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board; provided, however, if the Company shall not have made adequate provision to substitute for the Adjustment Shares pursuant to clause (B) above within thirty (30) days following the occurrence of a Section 11(a)(ii) Event (the "Section“Section 11(a)(ii) Trigger Date"Date”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of any portion of the Purchase Price, Common Shares (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional Common Shares might be authorized for issuance for exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"“Substitution Period”). To the extent that the Company determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to the last paragraph of Section 11(a)(ii) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be"common“common stock equivalent"equivalent” shall be deemed to have the same value as the Common Shares on such date.Appendix A-13"current“current per share market price"price” of the Common Shares on any date shall be deemed to be the average of the daily closing prices per Common Share for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date;provided, however,however, ex-dividendex‑dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per Common Share. The closing price for each day shall be the last sale price, regular way, reported at or prior to 4:00 P.M. Eastern time or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, reported at or prior to 4:00 P.M. Eastern time, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Common Shares are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Common Shares are listed or admitted to trading or, if the Common Shares are not listed or admitted toAppendix A-14over-the-counterover‑the‑counter market, as reported at or prior to 4:00 P.M. Eastern time by the applicable reporting system then in use, or, if on any such date the Common Shares are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Shares selected by the Board. The term "Trading Day"“Trading Day” shall mean a day on which the principal national securities exchange on which the Common Shares are listed or admitted to trading is open for the transaction of business or, if the Common Shares are not listed or admitted to trading on any national securities exchange, a Business Day.ten-thousandthten‑thousandth of a share as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment or (ii) the Expiration Date.ten-thousandthten‑thousandth of a Common Share) obtained by (i) multiplying (x) the number of Common Shares covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.ten-thousandth)ten‑thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for theAppendix A-15holder'sholder’s right to receive such additional shares upon the occurrence of the event requiring such adjustment... Whenever an adjustment is made as provided in Section 11 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment, and a brief statement of the facts accounting for such adjustment, (b) file with the Rights Agent andAppendix A-16over-the-counterover‑the‑counter market, as reported by Nasdaq or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board. If on any such date no such market maker is making a market in the Rights the fair value of the Rights on such date as determined in good faith by the Board shall be used.holder'sholder’s right to receive any fractional Rights or any fractional shares upon exercise of a Right (except as provided above)... All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Shares), may, in such holder'sholder’s own behalf and for such holder'sholder’s own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder'sholder’s right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement.Appendix A-17Table of Contents.. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: �� prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Shares;.. No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or other distributions or be deemed for any purpose the holder of the Common Shares or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof.Appendix A-18Table of Contents.. The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound:misconduct.Appendix A-19.. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 90 days'days’ notice in writing mailed to the Company and to each transfer agent of the Common Shares by registered or certified mail and, if such resignation occurs after the Distribution Date, to the holders of the Right Certificates by first-classfirst‑class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 90 days'days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Shares by registered or certified mail and, if such removal occurs after the Distribution Date, to the holders of the Right Certificates by first-classfirst‑class mail. If the Rights Agent and the transfer agent of the Common Shares are the same Person, the appointment of a successor transfer agent for the Common Shares shall without any further action be the appointment of such Person as successor Rights Agent. If the Rights Agent and the transfer agent of the Common Shares are the same Person, notwithstanding the foregoing notice provisions, (a) prior to the Distribution Date, no notice of resignation or removal need be given to holders of the Rights, and (b) a resignation notice from, and a removal notice to, the Rights Agent shall be given upon such number of days'days’ notice as is specified in the agreement governing the Rights Agent'sAgent’s services as transfer agent, as such agreement may be amended from time to time. If the Rights Agent and the transfer agent are not the same Person and the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 90 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit such holder'sholder’s Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successorAppendix A-20the State of New York or the State of Wisconsin (or of any other state of the United States, so long as such entity is authorized to do business as a banking institution in the State of New York or the State of Wisconsin), in good standing, having an office or agency in the State of Wisconsin or the State of New York, which is authorized under such laws to exercise corporate trust, stock transfer or shareholder services .. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by the Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale by the Company of Common Shares following the Distribution Date and prior to the Expiration Date, the Company (a) will, with respect to Common Shares so issued or sold pursuant to the exercise, exchange or conversion of securities (other than Rights) issued prior to the Distribution Date that are exercisable or exchangeable for, or convertible into, Common Shares and (b) may, in any other case, if deemed necessary, appropriate or desirable by the Board, issue Right Certificates representing an equivalent number of Rights as would have been issued in respect of such Common Shares if they had been issued or sold prior to the Distribution Date, as appropriately adjusted as provided herein as if they had been so issued or sold; provided, however, that (i) no such Right Certificate will be issued if, and to the extent that, in its good faith judgment the Board determines that the issuance of such Right Certificate could have a material adverse tax consequence to the Company or to the Person to whom or which such Right Certificate otherwise would be issued and (ii) no such Right Certificate will be issued if, and to the extent that, appropriate adjustment otherwise has been made in lieu of the issuance thereof."Redemption Price"“Redemption Price”). The redemption of the Rights by the Board may be made effective at such time on such basis and with such conditions as the Board in its sole discretion may establish.Appendix A-21"Exchange Ratio"“Exchange Ratio”). Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange at any time after an Acquiring Person becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding. The exchange of the Rights by the Board may be made effective as such time, on such basis and with such conditions as the Board in its sole discretion may establish. Prior to effecting an exchange pursuant to this Section 24, the Board may direct the Company to enter into a trust agreement in such form and with such terms as the Board shall approve (the "Trust Agreement"“Trust Agreement”). If the Board so directs, the Company shall enter into the Trust Agreement and shall issue to the trust created by the Trust Agreement (the "Trust"“Trust”) all of the Common Shares or common stock equivalents, to the extent applicable pursuant to Section 24(c), issuable pursuant to the exchange (and any cash in lieu of fractional shares), and all Persons entitled to receive shares pursuant to the exchange shall be entitled to receive such Common Shares or common stock equivalents (and any dividends or distributions made thereon after the date on which such shares are deposited in the Trust and any cash in lieu of fractional shares) only from the Trust and solely upon compliance with the relevant terms and provisions of the Trust Agreement.Appendix A-22Table of ContentsMGIC Investment Corporation250 East Kilbourn AvenueMilwaukee, Wisconsin 53202Attention: SecretaryWells Fargo Bank, National AssociationAttn: Wells Fargo Shareowner Services Manager of Account Administration1110 Centre Pointe Curve, Suite 101Mendota Heights, MN 55120first-classfirst‑class mail,Appendix A-23.. Prior to the Distribution Date and subject to the penultimate sentence of this Section 27, the Company may and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement without the approval of any holders of certificates representing Common Shares.Shares; provided that the Company may not amend (a) the proviso in the first sentence of Section 36, (b) the definition of Final Termination Date to state a date that is later than March 1, 2020 or (c) this sentence, in each case of clauses (a), (b) or (c) without the approval of the affirmative vote of a majority of the votes of holders of Common Shares cast on such amendment at a meeting of shareholders From and after the Distribution Date and subject to the penultimate sentence of this Section 27, the Company and the Rights Agent shall, if the Company so directs, supplement or amendSuccessors.Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder... Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares).Severability.Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated,providedthat nothing contained in this Section 30 will affect the ability of the Company under the provisions of Section 27 to supplement or amend this Agreement to replace such invalid, void or unenforceable term, provision, covenant or restriction with a legal, valid and enforceable term, provision, covenant or restriction... This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Wisconsin and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.State, except to the extent any provisions govern the rights, duties, liabilities, indemnification or exculpation of the Rights Agent, which provisions shall to such extent be governed by and construed in accordance with the laws of the State of New York.Counterparts.Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument... Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or constructionAppendix A-24.. The Board and the appropriate officers of the Company shall have the power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to interpret the provisions of this Agreement and make all determinations to be made by the Company hereunder or deemed necessary or advisable for the administration of this Agreement. The Board shall have the exclusive power and authority to exercise all rights and powers specificallyBook-Entry.Book-Entry. Reference in this Agreement to certificates for Common Shares includes, in the case of uncertificated Common Shares, the balances indicated in the book-entry account system of the transfer agent for the Common Shares, and prior to the Distribution Date, any uncertificated Common Shares shall also evidence the associated Rights. Any legend required to be placed on any certificate for Common Shares may instead be included on any book-entry confirmation or notification to the registered holder of such Common Shares.20122015 Rights Agreement in its entirety, effective at the close of business on July 23, 2015.August 1, 2018; provided that the effectiveness of such amendment and restatement shall be subject to the amendment and restatement being approved by a majority of the votes cast on such matter at the Company’s 2018 Annual Meeting of Shareholders, and if such amendment and restatement is not approved by a majority of the votes cast on such matter at the Company’s 2018 Annual Meeting of Shareholders, then this Agreement shall be null and void. For purposes of clarity, notwithstanding the foregoing and without limitation, any amendment effected after July 7, 2009 to the definitions of the terms "Acquiring Person"“Acquiring Person” and "Grandfathered Person"“Grandfathered Person” included in the 2009 Rights Agreement does not affect the validity or effectiveness of any (a) exception from the definition of Acquiring Person or (b) qualification as a Grandfathered Person, applicable to any Person prior to such amendment.Appendix A-25 MGIC INVESTMENT CORPORATION Attest:
By:/s/ /s/ Martha F. TsuchihashiBy:/s/ Jeffrey H. Lane Name:Martha F. Tsuchihashi Name:Jeffrey H. LaneBy: /s/ Timothy J. MattkeTitle: Assistant Secretary Title: Executive Vice President General Counsel & Secretaryand CFO
WELLS FARGO BANK, NATIONAL ASSOCIATIONEQUINITI TRUST COMPANY Attest:
By:/s/ Jennifer LenoBy:/s/ Darcie Rummel Name: /s/ Becky Paulson Jennifer LenoName:Darcie RummelBy: /s/ Andrea SeversonTitle: Vice President Title: Officer Appendix A-26EXHIBIT A EXHIBIT A[Form of Right Certificate]
Certificate No. R-R‑
_______ RightsAUGUSTMARCH 1, 20182020 (SUBJECT TO EXTENSION) OR EARLIER EXPIRATION OF THE RIGHTS AS PROVIDED IN THE RIGHTS AGREEMENT.July 23, 2015,April 26, 2018 and effective as of August 1, 2018, as such agreement may be amended (the "Rights Agreement"“Rights Agreement”), between MGIC Investment Corporation, a Wisconsin corporation (the "Company"“Company”), and Wells Fargo Bank, National Association, a national banking associationEquiniti Trust Company, organized under New York law, as successor rights agent (the "Rights Agent"“Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M., Milwaukee, Wisconsin time, on AugustMarch 1, 2018,2020, subject to extension, or earlier expiration of the Rights as provided under the Rights Agreement, at the principal office of the Rights Agent, or at the office of its successor as Rights Agent, one-tenth of one fully paid nonassessable (except as otherwise provided by any corporation law applicable to the Company) share of common stock, par value $1.00 ("(“Common Shares"Shares”), of the Company, at a purchase price of $45.00 per Common Share (the "Purchase Price"“Purchase Price”) (equivalent to $4.50 for each one-tenth of a Common Share), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number of Common Shares which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of July 23, 2015,August 1, 2018, based on the Common Shares as constituted at such date. As provided in the Rights Agreement, the Purchase Price and the number of Common Shares which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events.Person'sPerson’s acquisition of 50% or more of the outstanding Common Shares, exchange the Rights evidenced by this Certificate for Common Shares, at an exchange ratio of one Common Share per Right, subject to adjustment, as provided in the Rights Agreement.Appendix A-27,. ____________, ____. MGIC INVESTMENT CORPORATION
Attest:
By: Title: Countersigned: EQUINITI TRUST COMPANY Title: Countersigned:WELLS FARGO BANK, NATIONAL ASSOCIATIONBy: By: Authorized Signature Appendix A-28 (Please print name and address of transferee) Dated:, Signature Signature Appendix A-29—-- continued] (Please print name and address) (Please print name and address) Dated:, SignatureAppendix A-30—-- continued] Signature Appendix A-31
EXHIBIT B"Board"“Board”) of MGIC Investment Corporation (the "Company"“Company”) entered into a rights agreement and declared a dividend of one common share purchase right (a "Right"“Right”) for each outstanding share of common stock, $1.00 par value (the "Common Shares"“Common Shares”), of the Company. The dividend was payable on August 9, 1999 to the shareholders of record on that date (the "Record Date"“Record Date”). Our Board extended the term of and otherwise amended and restated that rights agreement on July 7, 2009, July 25, 2012 and July 23, 2015, inIn an effort to protect shareholder value by attempting to diminish the risk that the Company'sCompany’s ability to use its net operating losses ("NOLs"(“NOLs”) to reduce potential future federal income tax obligations may become substantially limited and by deterring certain abusive takeover practices."Rights Agreement"“Rights Agreement”) as made between the Company and Wells Fargo Bank, National Association,Equiniti Trust Company, organized under New York law, as the successor Rights Agent, on July 23, 2015.dated as of April 26, 2018, and effective as of August 1, 2018. Please note, however, that this description is only a summary, and is not complete, and should be read together with the entire Rights Agreement, which has been filed with the Securities and Exchange Commission as an exhibit to an amendment to a Registration Statement on Form 8-A8‑A dated on or about July 23, 2015.April 27, 2018. A copy of the Rights Agreement is available free of charge from our Company.Rights.Rights. The Rights will initially trade with, and will be inseparable from, the Common Shares. The Rights are evidenced only by certificates that represent Common Shares. New Rights will accompany any new Common Shares we issue until the Distribution Date described below or until the Rights are redeemed or the Rights Agreement expires.Price.Price. Each Right will allow its holder to purchase from our Company one-tenth of one Common Share for $45.00 per full Common Share (equivalent to $4.50 for each one-tenth of a Common Share), once the Rights become exercisable. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.Exercisability.Exercisability. The Rights will not be exercisable until the earlier of (1) 10 days after the public announcement, or the Board concluding, that a person or group has become an "Acquiring Person"“Acquiring Person” by obtaining beneficial ownership of 5.0% or more of our outstanding Common Shares, subject to certain exceptions, or (2) 10 business days (or such later date as the Board shall determine) following the commencement of a tender offer or exchange offer that would result in a person or group becoming an "Acquiring“Acquiring Person."”"Distribution“Distribution Date."” Until that date, the certificates for the Common Shares will also evidence the Rights, and any transfer of Common Shares will constitute a transfer of Rights. After that date, the Rights will separate from the Common Shares and be evidenced by book entry credits or by Rights certificates that we will mail to all eligible holders of Common Shares. Any Rights held by an Acquiring Person are void and may not be exercised.In.In. If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person may, for $45.00, purchase Common Shares with a market value of $90.00, based on the market price of the Common Shares prior to such acquisition.Expiration.Expiration The. If the Rights Agreement is approved by a majority of the votes of holders of Common Shares cast on such matters at our 2018 Annual Meeting of Shareholders, the Rights will expire on AugustMarch 1, 2018,2020, subject to extension or earlier expiration of the Rights as provided under the Rights Agreement. If the Rights Agreement is not so approved, the Rights will expire on August 1, 2018, subject to earlier expiration of the Rights as provided under the 2015 Rights Agreement.Redemption.Redemption. Our Board may redeem the Rights for $0.001 per Right at any time before any person or group becomes an Acquiring Person. If our Board redeems any Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of Rights will be to receive the redemption price of $0.001 per Right. The redemption price will be adjusted if we have a stock split or stock dividends of our Common Shares.Appendix A-32Table of ContentsExchange.Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of our outstanding Common Shares, our Board may extinguish the Rights by exchanging one Common Share or an equivalent security for each Right, other than Rights held by the Acquiring Person.Provisions.Provisions. Our Board may adjust the purchase price of the Common Shares, the number of Common Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split or a reclassification of the Common Shares. No adjustments to the Exercise Price of less than 1% will be made.Amendments.Amendments. The terms of the Rights Agreement generally may be amended by our Board without the consent of the holders of the Rights.Rights, but the Board may not extend the final termination date or make certain related amendments without the approval of a majority of the votes of holders of our Common Shares cast on such matter at a meeting of shareholders. After a person or group becomes an Acquiring Person, our Board may not amend the Rights Agreement in a way that adversely affects holders of the Rights.Appendix A-33
EXHIBIT C1(q)1(m)(i) of the Amended and Restated Rights Agreement (the "“Agreement"”), dated as of July 23, 2015April 26, 2018 and effective as of August 1, 2018, and as amended through the date hereof, by and between MGIC Investment Corporation, a Wisconsin corporation (the "“Company"”), and the Rights Agent named therein. Capitalized terms used, but not defined, in this letter (and the term "beneficial ownership"“beneficial ownership”) shall have the meanings given them under the Agreement.("(“Investor"”) requests that the Company determine pursuant to Section 1(q)1(m)(ii) of the Agreement, based on this letter and any other information that the Company believes relevant (which, upon written request of the Company, Investor must provide if it desires to pursue this request), that beneficial ownership by Investor and its Affiliates and Associates of 5.0% or more of the outstanding Common Shares would not jeopardize or endanger the availability to the Company of the Tax Benefits (such determination, if affirmative, is referred to herein as the "“Determination"”). The representations, warranties, and covenants of Investor contained in this letter are being provided or made solely in connection with Investor'sInvestor’s request that the Company make the Determination, thereby effectuating the exemption (the "“Exemption"”) provided in Section 1(q)1(m) of the Agreement."“Applicable Period"” means the period beginning with and including the date of this letter and ending at the earlier of (A) the time, if any, following the Determination at which the Exemption is no longer in effect, or (B) the time at which the Agreement is no longer effective."“Economic Ownership"” of shares if such shares are treated, for purposes of Section 382 of the Code and the Treasury Regulations thereunder, as being owned by the specified Person (or by a Person or group of Persons to which the shares owned by the specified Person are attributed pursuant to Treasury Regulation Section 1.382-2T(h)). "Fund"“Fund” means (A) an investment account that is not itself a Person and that is managed or advised by Investor or by an Affiliate or Associate of Investor, and (B) any Affiliate or Associate of Investor that is an investment fund. "Investor Group"“Investor Group” refers collectively to Investor and its Affiliates and Associates (including) ____________________), other than the Funds.1.The aggregate number of Common Shares, the aggregate principal amount of 2063 Debentures, the aggregate principal amount of 2017 Notes and the aggregate principal amount of 2020 Notes beneficially owned by the Funds and by the Investor Group and Funds, collectively, are as follows:1. The aggregate number of Common Shares and the aggregate principal amount of 2063 Debentures beneficially owned by the Funds and by the Investor Group and Funds, collectively, are as follows: Number ofCommonSharesAggregatePrincipal Amountof 2063Debentures (a)AggregatePrincipal Amountof 2017 Notes (a)AggregatePrincipal Amountof 2020 Notes (a) Funds Investor Group and Funds, collectively Appendix A-342017 Notes and 2020 Notes (as applicable) held and the aggregate principal amount acquired on each such date.]2.Investor represents and warrants that the following statements are true and correct at the date of this letter, and that the statements in subparagraphs (b) and (c) below will also be true and correct at all times during the Applicable Period:(a)Neither the Investor Group nor any single Fund has Economic Ownership of more than 4.90%1 of the total outstanding Common Shares.(b)With respect to any Common Shares owned by the Investor Group, no member of the Investor Group is acting as a member of a group that both (I) includes any Person other than another member of the Investor Group and (II) is treated as an "entity" under the second sentence of Treasury Regulation Section 1.382-3(a)(1)(i).(c)With respect to any Common Shares owned by a Fund, such Fund is not acting as a member of a group that is treated as an "entity" under the second sentence of Treasury Regulation Section 1.382-3(a)(1)(i).3.Investor acknowledges, understands and agrees that, at all times during the Applicable Period, neither the Investor Group nor any Fund shall acquire (other than through a stock dividend, rights dividend, stock split or similar transaction effected by the Company) any Common Shares (or any interests in an entity that owns, directly or indirectly, any Common Shares) if, immediately after such acquisition, (i) the Investor Group or such Fund would have Economic Ownership of more than 4.99% of the total then-outstanding Common Shares, or (ii) to Investor's knowledge, any Person other than (x) a member of the Investor Group or (y) such Fund would have Economic Ownership of more than 4.99% of the total then-outstanding Common Shares (and would not have such level of Economic Ownership but for such acquisition by the Investor Group or such Fund).2. Investor represents and warrants that the following statements are true and correct at the date of this letter, and that the statements in subparagraphs (b) and (c) below will also be true and correct at all times during the Applicable Period: (a) (b) With respect to any Common Shares owned by the Investor Group, no member of the Investor Group is acting as a member of a group that both (I) includes any Person other than another member of the Investor Group and (II) is treated as an “entity” under the second sentence of Treasury Regulation Section 1.382-3(a)(1)(i). (c) With respect to any Common Shares owned by a Fund, such Fund is not acting as a member of a group that is treated as an “entity” under the second sentence of Treasury Regulation Section 1.382-3(a)(1)(i). 3. Sincerely, [Name of Investor]By: Name:Title:Appendix A-35Appendix B
This Proxy Statement contains forward looking statements. Forward looking statements consist of statements which relate to matters other than historical fact, including matters that inherently refer to future events. Among others, statements that include words such as "believe," "anticipate," "will" or "expect," or words of similar import, are forward looking statements. These forward looking statements are not guarantees of future performance and are subject to risk factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements. These factors include those listed below. Additional information concerning these and other factors is contained in our filings with the Securities and Exchange Commission. All forward looking statements speak only as of the date of this Proxy Statement. We assume no obligation, and disclaim any obligation, to update information contained in this Proxy Statement.·Competition or changes in our relationships with our customers could reduce our revenues, reduce our premium yields and / or increase our losses.·The amount of insurance we write could be adversely affected if lenders and investors select alternatives to private mortgage insurance.·Changes in the business practices of the GSEs, federal legislation that changes their charters or a restructuring of the GSEs could reduce our revenues or increase our losses.·We may not continue to meet the GSEs' mortgage insurer eligibility requirements and our returns may decrease as we are required to maintain more capital in order to maintain our eligibility.·The benefit of our net operating loss carryforwards may become substantially limited.·We are involved in legal proceedings and are subject to the risk of additional legal proceedings in the future.·Resolution of our dispute with the Internal Revenue Service could adversely affect us.·Because we establish loss reserves only upon a loan default rather than based on estimates of our ultimate losses on risk in force, losses may have a disproportionate adverse effect on our earnings in certain periods.·Because loss reserve estimates are subject to uncertainties, paid claims may be substantially different than our loss reserves.·We rely on our management team and our business could be harmed if we are unable to retain qualified personnel or successfully develop and/or recruit their replacements.·Loan modification and other similar programs may not continue to provide substantial benefits to us.·If the volume of low down payment home mortgage originations declines, the amount of insurance that we write could decline, which would reduce our revenues.·State capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis.·Downturns in the domestic economy or declines in the value of borrowers' homes from their value at the time their loans closed may result in more homeowners defaulting and our losses increasing.·The mix of business we write affects the likelihood of losses occurring, our Minimum Required Assets under the PMIERs, and our premium yields.·The premiums we charge may not be adequate to compensate us for our liabilities for losses and as a result any inadequacy could materially affect our financial condition and results of operations.·We are susceptible to disruptions in the servicing of mortgage loans that we insure.·Changes in interest rates, house prices or mortgage insurance cancellation requirements may change the length of time that our policies remain in force.·Your ownership in our company may be diluted by additional capital that we raise or if the holders of our outstanding convertible debt convert that debt into shares of our common stock.·Our debt obligations materially exceed our holding company cash and investments.·We could be adversely affected if personal information on consumers that we maintain is improperly disclosed and our information technology systems may become outdated and we may not be able to make timely modifications to support our products and services.Appendix B-1
Shareowner Services P.O. Box 64945 St. Paul, MN 55164-0945 Vote by Internet, Telephone or Mail 24 Hours a Day, 7 Days a Week Your phone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. INTERNET/MOBILE – www.proxypush.com/mtg Use the Internet to vote your proxy until 11:59 p.m. (CT) on April 27, 2016. Scan code below for mobile voting. PHONE – 1-866-883-3382 Use a touch-tone telephone to vote your proxy until 11:59 p.m. (CT) on April 27, 2016. MAIL – Mark, sign and date your proxy card and return it in the postage-paid envelope provided. If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your Proxy Card. Please detach here The Board of Directors Recommends a Vote FOR all of the nominees for Director in Item 1 and FOR Items 2, 3 and 4. 1.Election of directors: 01 Daniel A. Arrigoni 02 Cassandra C. Carr 03 C. Edward Chaplin 04 Curt S. Culver 05 Timothy A. Holt 06 Kenneth M. Jastrow, II 07 Michael E. Lehman 08 Donald T. Nicolaisen 09 Gary A. Poliner 10 Patrick Sinks 11 Mark M. Zandi Vote FOR all nominees (except as marked) Vote WITHHELD from all nominees (Instructions: To withhold authority to vote for any indicated nominee, write the number(s) of the nominee(s) in the box provided to the right.) 2. Advisory vote to approve named executive officer compensation For Against Abstain 3. Approve our Amended and Restated Rights Agreement For Against Abstain 4. Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016 For Against Abstain THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED AS THE BOARD RECOMMENDS. Address Change? Mark box, sign, and indicate changes below: Date Signature(s) in Box Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy. QR CODE
MGIC INVESTMENT CORPORATION ANNUAL MEETING OF SHAREHOLDERS April 28, 2016 9:00 a.m. Central Time BRADLEY PAVILION MARCUS CENTER FOR THE PERFORMING ARTS 929 North Water Street Milwaukee, WI 53202 MGIC Investment Corporation P.O. Box 488 Milwaukee, WI 53201 Proxy This proxy is solicited by the Board of Directors for use at the Annual Meeting on April 28, 2016. By signing on the reverse side, I hereby appoint PATRICK SINKS AND TIMOTHY J. MATTKE, and either one of them, as my proxy and attorney-in-fact, with full power of substitution by the Board of Directors of MGIC Investment Corporation (MGIC), to represent and vote, according to my choices on this proxy card, all shares of Common Stock of MGIC which I am entitled to vote at the Annual Meeting of Shareholders to be held in the Bradley Pavilion of the Marcus Center for the Performing Arts, 929 North Water Street, Milwaukee, Wisconsin, on Thursday, April 28, 2016, at 9:00 a.m. Central Time, and at any adjournment, and in the discretion of the proxies on any other business properly brought before the meeting. I acknowledge that I have received MGIC’s Notice of Annual Meeting, Proxy Statement and 2015 Annual Report. Notice to Participants in MGIC’s Profit Sharing and Savings Plan: As a participant in the MGIC Profit Sharing and Savings Plan (Plan), you have the right to instruct the Plan Trustee how to vote the shares of MGIC Common Stock allocated to your account. If your voting instructions are received by the Plan Trustee at least three business days before the Annual Meeting, shares held in your account will be voted by the Plan Trustee in accordance with your voting choices. If your instructions are not timely received or if you do not respond, shares held in your account will be voted by the Plan Trustee in accordance with the Plan and applicable law. See reverse for voting choices and instructions.