Exhibit 10.3
PERSONAL AND
CONFIDENTIAL
RADIAN GROUP INC.
2008 EQUITY COMPENSATION PLAN
STOCK APPRECIATION RIGHT
AGREEMENT
This STOCK APPRECIATION RIGHT
AGREEMENT, dated as of [DATE] (the “ Date of
Grant ”), is delivered by Radian Group Inc., a
Delaware corporation (the “ Company ”),
to [NAME], an employee of the Company or one of its Subsidiaries
(the “ Grantee ”).
RECITALS
WHEREAS , the Radian Group Inc. 2008 Equity Compensation
Plan, as amended (the “ Plan ”) permits
the grant of stock appreciation rights to employees, officers,
directors, consultants and advisors of the Company with respect to
shares of Common Stock, in accordance with the terms and provisions
of the Plan.
WHEREAS, the Committee, appointed by the Board of
Directors of the Company to administer the Plan, has determined
that it would be to the advantage and in the best interest of the
Company to make the grant provided for herein as an inducement for
the Grantee to continue as an employee of the Company and to
promote the best interests of the Company and its
stockholders.
WHEREAS , the applicable provisions of the Plan are
incorporated in this Stock Appreciation Right Agreement by
reference, including the definitions of terms contained in the Plan
(unless such terms are otherwise defined herein).
NOW, THEREFORE
, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Grant of SARs . Subject to
the terms and conditions set forth in this Stock Appreciation Right
Agreement, the Company, with the approval and at the direction of
the Committee, hereby grants to the Grantee
stock appreciation rights (the “ SARs ”)
with respect to
shares of Common Stock (each SAR relating to one share of Common
Stock) under the Plan. The Grantee accepts the SARs and agrees to
be bound by the terms and conditions of this Stock Appreciation
Right Agreement and the Plan with respect to the award.
2. SARs . Each SAR represents
the right to receive an amount equal to the Stock Appreciation (as
defined herein), payable in cash. For purposes of this Stock
Appreciation Right Agreement, the “ Stock
Appreciation ” for each SAR is the excess, if any, of
(i) the fair market value of the underlying share of Common
Stock, determined on the date of exercise of the SARs, over
(ii) $2.68, the “ Grant Price ” of
such SAR. Each SAR may be exercised as provided in Section 6
below.
No shares of Common Stock shall be
issued to the Grantee at the time the award is made. Nor shall any
shares of Common Stock be issued to the Grantee at the time any
SARs are exercised pursuant to the provisions of Section 6.
The Grantee shall not be, nor have any of the rights or privileges
of, a stockholder of the Company with respect to any SARs. The
Grantee shall not have any interest in any fund or specific assets
of the Company by reason of this award, and the Grantee shall be an
unsecured creditor of the Company.
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3. Vesting . Provided the Grantee remains
employed by the Company or a Subsidiary (as defined in the Plan)
through the vesting date and meets any applicable vesting
requirements set forth in this Stock Appreciation Right Agreement,
except as set forth in Section 4 and 5 below, the SARs awarded
under this Stock Appreciation Right Agreement shall vest as follows
(the period over which the SARs vest is referred to as the “
Vesting Period ”):
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Vested SARs
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May 13, 2012
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50% of the awarded SARs
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May 13, 2013
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Remaining 50% of the awarded SARs
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If the vesting schedule above would
produce a fractional share, the portion of the SARs that are
exercisable shall be rounded up to the nearest whole
share.
Except as specifically provided in
this Stock Appreciation Right Agreement, no SARs will vest after
the Grantee’s employment with the Company or a Subsidiary has
terminated for any reason and, in the event of such termination,
the Grantee will forfeit to the Company all SARs that have not yet
vested or with respect to which all applicable restrictions and
conditions have not lapsed.
4. Retirement, Disability and
Death . If the Grantee terminates employment because of
(i) the Grantee’s Retirement or (ii) the
Grantee’s death or Disability, the Grantee’s SARs will
automatically vest in full on the date of the occurrence of the
event. For purposes of this Stock Appreciation Right Agreement, the
term “ Disability ” shall mean a physical
or mental impairment of sufficient severity that the Grantee is
both eligible for, and in receipt of, benefits under the long-term
disability program maintained by the Company.
5. Change of Control . If a
Change of Control occurs and the Grantee’s employment with
the Company or a Subsidiary is terminated by the Company or a
Subsidiary without Cause (as defined in the Plan) or the Grantee
terminates employment for Good Reason (as defined herein), and the
Grantee’s date of termination occurs (or in the event of the
Grantee’s termination for Good Reason, the event giving rise
to Good Reason occurs), in each case, during the period beginning
on the date that is 90 days before the Change of Control and ending
on the date that is one year following the Change of Control, the
SARs will automatically vest in full on the Grantee’s date of
termination (or, if later, on the date of the Change of Control).
However, in no event may the SARs be exercised after five years
from the Date of Grant.
For purposes of this Stock
Appreciation Right Agreement, “ Good Reason
” shall mean:
(a) a material diminution of the
Grantee’s authority, duties or responsibilities;
or
(b) a material reduction in the
Grantee’s base salary, which, for purposes of this Stock
Appreciation Right Agreement, means a reduction in base salary of
10% or more that does not apply generally to all similarly situated
employees of the Company.
In order to terminate employment for
Good Reason, the Grantee must provide a written notice of
termination with respect to termination for Good Reason to the
Company within 90 days after the event constituting Good Reason has
occurred. The Company shall have a period of 30 days in which it
may correct the act, or the failure to act, that gave rise to the
Good Reason event as set forth in the notice of termination. If the
Company does not correct the act, or the failure to act, the
Grantee must terminate employment for Good Reason within 30 days
after the end of the cure period, in order for the termination to
be considered a Good Reason termination.
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For the avoidance of doubt, in no
event shall a Change of Control occur as a result of the
Company’s participation in the Troubled Asset Relief Program
under the Emergency Economic Stabilization Act of 2008 and the
American Recovery and Reinvestment Act of 2009, or any similar
program of the United States, any of its states, or any of their
respective political subdivisions, departments, agencies or
instrumentalities (collectively, “TARP”).
6. Exercise of the SARs .
When the SARs become vested
