Pension Plan (2002)Full Document 

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                                RADIAN GROUP INC.
                                  PENSION PLAN
                 AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997

               (Incorporating Amendments through January 1, 2002)

                         RADIAN GROUP INC. PENSION PLAN
                 AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997

                                Table of Contents



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PREAMBLE.............................................................................      1

ARTICLE I - Definitions .............................................................      2

     1.1      Accrued Benefit........................................................      2
     1.2      Actuarial Equivalent...................................................      2
     1.3      Affiliate..............................................................      3
     1.4      Annual Salary..........................................................      3
     1.5      Annuity Starting Date..................................................      4
     1.6      Average Annual Salary..................................................      4
     1.7      Board..................................................................      4
     1.8      Code...................................................................      4
     1.9      Commonwealth Pension Plan..............................................      5
     1.10     Company................................................................      5
     1.11     Covered Compensation...................................................      5
     1.12     Credited Service.......................................................      5
     1.13     Deferred Retirement Date...............................................      6
     1.14     Early Retirement Date..................................................      6
     1.15     Effective Date.........................................................      6
     1.16     Eligible Employee......................................................      6
     1.17     Employee...............................................................      7
     1.18     Employment Year........................................................      7
     1.19     ERISA..................................................................      7
     1.20     Fresh-Start Date.......................................................      7
     1.21     Frozen Retirement Benefit..............................................      7
     1.22     Hour of Service........................................................     12
     1.23     Investment Manager.....................................................     14
     1.24     Normal Retirement Date.................................................     15
     1.25     One-Year Break in Service..............................................     15
     1.26     Participant............................................................     16
     1.27     Participating Employer.................................................     16
     1.28     Plan...................................................................     16
     1.29     Plan Administrator.....................................................     16
     1.30     Required Beginning Date................................................     16
     1.31     Spouse.................................................................     17
     1.32     Termination of Employment..............................................     17
     1.33     Trust Agreement........................................................     17
     1.34     Trust Fund.............................................................     17
     1.35     Trustee................................................................     18
     1.36     Year of Service........................................................     18



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ARTICLE II - Participation...........................................................     19

     2.1      Eligibility to Participate.............................................     19
     2.2      Employment with a Predecessor..........................................     19
     2.3      Periods of Non-Covered Employment......................................     19
     2.4      Service as a Leased Employee...........................................     20
     2.5      Employment with a Successor............................................     21
     2.6      Termination of Participation...........................................     21
     2.7      Reemployment After Military Service....................................     22

ARTICLE III - Contributions..........................................................     23

ARTICLE IV - Retirement Dates........................................................     25

     4.1      Normal Retirement Date.................................................     25
     4.2      Early Retirement Date..................................................     25
     4.3      Deferred Retirement Date...............................................     25

ARTICLE V -  Benefits................................................................     26

     5.1      Normal Retirement Benefit..............................................     26
     5.2      Early Retirement Benefit...............................................     26
     5.3      Deferred Retirement Benefit............................................     27
     5.4      Retirement Benefit in Event of Disability..............................     27
     5.5      Minimum Benefit........................................................     29
     5.6      Deduction for Other Pension............................................     29

ARTICLE VI - Payment of Benefits.....................................................     31

     6.1      Standard...............................................................     31
     6.2      Minimum Distribution Requirements......................................     32
     6.3      Qualified Joint and Survivor Annuity...................................     32
     6.4      Joint and Survivor Annuity Option......................................     35
     6.5      Payment of Small Benefits..............................................     36
     6.6      General Rules and Restrictions.........................................     36
     6.7      Direct Rollover of Benefits from Plan..................................     37

ARTICLE VII - Death Benefits.........................................................     39

     7.1      Death While Employed...................................................     39
     7.2      Death After Vested Termination of Employment...........................     39
     7.3      Commencement of Surviving Spouse's Annuity.............................     40
     7.4      Special Rule Concerning Joint and Survivor Annuity.....................     41
     7.5      Lump Sum Payment of Spouse's Annuity...................................     41

ARTICLE VIII - Termination of Employment.............................................     42

     8.1      Termination After 5 or More Years of Service...........................     42
     8.2      Early Commencement of Termination Benefit..............................     42
     8.3      Payment of Benefits....................................................     42



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ARTICLE IX - Reemployment............................................................     43

     9.1      Reemployment Without Intervening Break in Service......................     43
     9.2      Reemployment After Intervening Break in Service........................     43
     9.3      Reemployment After Normal Retirement Date..............................     44
     9.4      Form of Benefit........................................................     45

ARTICLE X - Funding..................................................................     47

     10.1     Establishment of Trust.................................................     47
     10.2     Administration of the Trust............................................     47
     10.3     General................................................................     48
     10.4     Changes in Funding Medium..............................................     48

ARTICLE XI - Administration of the Plan..............................................     49

     11.1     General................................................................     49
     11.2     Disputes...............................................................     50
     11.3     Plan Expenses..........................................................     51

ARTICLE XII - Limitation on Assignment of Benefits...................................     52

     12.1     Limitation on Assignment of Benefits...................................     52

ARTICLE XIII - Miscellaneous ........................................................     53

     13.1     Limitation of Rights...................................................     53
     13.2     Actions of Participating Employers.....................................     53
     13.3     Inability to Locate Payee..............................................     54
     13.4     Exclusivity of Benefits................................................     54
     13.5     Distributions on Behalf of Incapacitated Persons.......................     54
     13.6     Determination as to Payment of Benefits by the Plan Administrator......     54
     13.7     Withholding Requirements...............................................     54

ARTICLE XIV - Limitation on Benefits.................................................     55

     14.1     Maximum Limitations....................................................     55

ARTICLE XV - Amendment or Termination of the Plan....................................     56

     15.1     Right to Amend or Terminate............................................     56
     15.2     Complete Termination of the Plan.......................................     57
     15.3     Partial Termination of the Plan........................................     60
     15.4     Mergers, Consolidations and Transfers..................................     60
     15.5     Withdrawal by a Participating Employer.................................     61

ARTICLE XVI - Pre-Termination Restrictions...........................................     63

      16.1     Limitation............................................................     63



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ARTICLE XVII - Top-Heavy Provisions..................................................     65

     17.1     Definitions............................................................     65
     17.2     Vesting................................................................     68
     17.3     Minimum Accrued Benefit................................................     69
     17.4     Change in Section 415 Limitations......................................     70

ARTICLE XVIII - Construction of the Plan.............................................     71

SCHEDULE A - Participating Employers.................................................     72



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                         RADIAN GROUP INC. PENSION PLAN
                 AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997

                                    Preamble

      WHEREAS, Radian Group Inc. (formerly known as, CMAC Investment
Corporation) (the "Company") adopted the Radian Group Inc. Pension Plan
(formerly known as, the CMAC Investment Corporation Pension Plan) (the "Plan"),
effective November 6, 1992, for the benefit of its eligible employees and the
eligible employees of the Participating Companies in the United States; and

      WHEREAS, the Company has amended the Plan several times before; and

      WHEREAS, the Company desires at this time to amend and restate the Radian
Group Inc. Pension Plan to, among other things, incorporate the applicable
provisions of the Uruguay Round Agreement Act, the Uniformed Services Employment
and Reemployment Act of 1994, the Small Business Job Protection Act of 1996, and
the Taxpayer Relief Act of 1997 (collectively, "GUST") and other amendments
which were made to the Plan by the Company since the Plan's last restatement;
and

      WHEREAS, the Company also desires to make other changes;

      NOW, THEREFORE, effective January 1, 1997 (except as otherwise set forth
herein), the Plan is hereby amended and restated as hereinafter set forth.


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                                    ARTICLE I
                                   Definitions

      The following words and phrases when used herein shall have the meanings
set forth below.

      1.1 "Accrued Benefit" means, for any Participant as of any date, the
amount of benefit earned to such date, payable as a Single Life Annuity
beginning at the Participant's Normal Retirement Date calculated in accordance
with Section 5.1 of the Plan.

      1.2 "Actuarial Equivalent" means a benefit having an equivalent value of
the Single Life Annuity based upon the 1971 TPF&C Forecast Mortality Table for
males set back two years and an interest rate of 6% compounded annually, except
as otherwise specifically provided below. Except as otherwise specifically
provided, such factors and tables shall also be used in applying "actuarial
value", "present value", "actuarially reduced" and other similar terms.

      Effective January 1, 2002, the present value of a Participant's benefit,
payable in the form of a lump sum, shall be calculated by using the Applicable
Interest Rate and Applicable Mortality Table. The "Applicable Interest Rate"
shall be the average annual rate of interest on 30-year Treasury securities, as
determined by Regulation or other Internal Revenue Service guidance for this
purpose, determined during the November preceding the Plan Year during which the
Annuity Starting Date occurs. The "Applicable Mortality Table" shall be the
mortality table based on the prevailing Commissioners' standard table (described
in Section 807(d)(5)(A) of the Code) used to determine reserves for group
annuity contracts issued on the date as of which present value is being
determined (without regard to any other subparagraph of Section 807(d)(5) of the
Code), that is prescribed by the Commissioner in revenue rulings, notices and
other guidelines published in the Internal Revenue Bulletin. Provided however,
with respect to any distribution in the form of a lump sum with an Annuity
Starting Date that occurs within the 12-month period beginning on January 1,
2002, the amount of


                                      -2-

such lump sum distribution shall be the greater of the amount that would be
determined under the Plan using the assumptions described in this paragraph or
the amount determined using the assumptions described in the next following
paragraph.

            Prior to January 1, 2002, the present value of a Participant's
benefit, payable in the form of a lump sum, shall be calculated on the basis of
the interest rates in use by the Pension Benefit Guaranty Corporation, for the
purpose of valuing immediate and deferred annuities provided under terminating
single employer pension plans, on January 1 of the calendar year in which the
distribution occurs and on the UP-1984 Mortality Table (except that in
determining the value of the Participant's benefit at the date of any prior
benefit payment, the interest rates used shall be those applicable to a lump sum
payable at the time of such prior benefit payment).

      1.3 "Affiliate" means any corporation or other trade or business that
together with any Participating Employer is deemed a single employer under Code
Sections 414(b), 414(c) or 414(m), or is required to be aggregated with a
Participating Employer pursuant to Code Section 414(o), with any such entity to
be considered an Affiliate under the Plan (i) during any such period of
affiliated or required aggregated status, and (ii) to the extent specifically
provided elsewhere in the Plan, during any period preceding a period of such
affiliated status.

      1.4 "Annual Salary" means, as of any January 1, the basic annual salary
rate or annualized hourly wage rate of a Participant then in effect (excluding
overtime, bonuses or any other form of additional compensation, but including
all amounts that would have been paid as basic salary had the Participant not
elected a reduction in salary under any plan maintained by a Participating
Employer that qualifies under Code Sections 125, 132(f) or 401(k)).

      For purposes hereof, in the case of any Participant who is employed on a
part-time basis on any January 1, his Annual Salary for such January 1 shall be
determined as if he were employed on a full-time basis.


                                      -3-

      Notwithstanding the foregoing, a Participant's Annual Salary for purposes
of the Plan for any calendar year beginning after December 31, 1988, but before
January 1, 1994 shall not exceed $200,000 (or such greater amount as may be
permissible under Code Section 401(a)(17)). For calendar years beginning after
December 31, 1993 a Participant's Annual Salary for purposes of the Plan shall
not exceed $150,000 (or such greater amount as may be permissible under Code
Section 401(a)(17).

      In determining the Annual Salary of a Participant, with respect to
calendar years beginning prior to January 1, 1997, for purposes of the
application of the limitation under Code Section 401(a)(17), the rules of Code
Section 414(q)(6) shall apply, except that in applying such rules, the term
"family" shall include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before the close of
the year. For purposes of this paragraph, a Participant is an Eligible Employee
who either is a 5% owner or is both a highly compensated employee and one of the
ten most highly compensated employees. If, as a result of the application of
these rules, the Code Section 401(a)(17) limitation is exceeded, then (except
for purposes of determining the portion of a Participant's Annual Salary up to
integration level) the limitation shall be prorated among the affected persons
in proportion to each such Participant's Annual Salary as determined under this
paragraph prior to the application of this limitation.

      1.5 "Annuity Starting Date" means the first day of the first period for
which an amount is payable as an annuity, or in the case of a benefit not
payable in the form of an annuity, the first day on which all events have

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