Exhibit 10.1
RADIAN GROUP INC.
AMENDED AND
RESTATED
2008 EQUITY COMPENSATION
PLAN
The purpose of the Radian Group Inc.
2008 Equity Compensation Plan (the “Plan”) is to
promote the interests of Radian Group Inc., a Delaware corporation
(together with its Subsidiaries as a group, the
“Company”), by providing employees, officers,
non-employee directors, consultants and advisors of the Company
with appropriate incentives and rewards to encourage them to enter
into and continue in the service of the Company, and by aligning
their long-term interests with those of the Company’s
stockholders. The Plan is the successor to the Radian Group Inc.
Equity Compensation Plan, as amended, adopted by the Board in 1995,
under which no further incentive awards will be granted.
1. Definitions
Capitalized terms used in the Plan
shall have the definitions specified or otherwise referenced in
Section 23 below, unless the context otherwise
requires.
2. Grants Under the
Plan
The following equity incentives may
be granted under the Plan: Incentive Stock Options (as defined in
Section 6(b) below), Nonqualified Stock Options (as defined in
Section 6(b) below), Restricted Stock Grants (as defined in
Section 7 below), Restricted Stock Units (as defined in
Section 7 below), SARs (as defined in Section 8 below),
Phantom Stock (as defined in Section 9 below), and Performance
Share Awards (as defined in Section 10 below). Each award of
an equity incentive under the Plan may be referred to herein as a
“Grant.” All Grants shall be subject to the terms and
conditions set forth herein and to such other terms and conditions
of any nature as the Committee deems appropriate and specifies in
writing to the Grantee in order to evidence the Grant (the
“Grant Letter”), as long as they are not inconsistent
with the Plan. Grants under any section of the Plan need not be
uniform as among the Grantees receiving the same type of Grant, and
Grants under two or more sections of the Plan may be combined in
one Grant Letter.
3. Shares Subject to the
Plan
(a) Maximum Number of
Shares . The aggregate number of shares of the Common
Stock, par value $0.001 (“Common Stock”), of the
Company that may be issued under the Plan is 2,467,000 shares,
subject to adjustment as provided in this Section 3 (the
“Plan Reserve”). The maximum number of shares of Common
Stock subject to Grants made to any individual Grantee in any
calendar year shall be 500,000 shares, subject to adjustment
pursuant to Section 3(c) below. The shares issued under the
Plan may be authorized but unissued shares or reacquired shares. If
and to the extent that (i) Stock Options or SARs granted under
the Plan terminate, expire or are canceled without having been
exercised, (ii) any shares of Restricted Stock or Phantom
Stock or any Restricted Stock Units or Performance Share Awards are
forfeited or otherwise terminate or are cancelled without being
vested or settled in full, or (iii) awards are settled in cash
rather than Common Stock, the shares subject to such Grant shall be
restored to
the Plan Reserve and shall again be available
for subsequent Grants under the Plan, computed as provided in
Section 3(b) below. With respect to awards that provide for
settlement solely in cash (and not Common Stock), the Common Stock
on which the awards are based shall not count against the Plan
Reserve. For the avoidance of doubt, the following shares shall
not again be made available for subsequent Grants under the
Plan: (1) shares not issued as a result of the net settlement
of a stock-settled SAR, (2) shares tendered or withheld to pay
the exercise price or withholding taxes related to a Grant, or
(3) shares repurchased on the open market with the proceeds of
the exercise price of any Grant .
(b) Flexible Plan
Reserve. Each Stock Option or SAR (other than an SAR
providing for settlement solely in cash, which shall not count
against the Plan Reserve) granted under this Plan shall reduce the
Plan Reserve available for grant under the Plan by one
(1) share for every share subject to such Grant. Each Grant of
Restricted Stock, Restricted Stock Units (other than a Grant
providing for settlement solely in cash, which shall not count
against the Plan Reserve), Phantom Stock or Performance Share
Awards under this Plan (collectively, “Full Value
Grants”) shall reduce the Plan Reserve available for grant
under the Plan by 1.14 shares (1- 1 / 3
shares for grants made prior to the
date of stockholder approval of this amended and restated Plan) for
every share subject to such Full Value Grant. To the extent that
shares subject to Stock Options or SARs are restored to the Plan
Reserve through the operation of clause (i) or (iii) of
Section 3(a) above, such shares shall increase the Plan
Reserve available for grant under the Plan by one (1) share
for each share so restored. To the extent that shares subject to
Full Value Grants are restored to the Plan Reserve through the
operation of clause (ii) of Section 3(a) above, such
shares shall increase the Plan Reserve available for grant under
the Plan by 1.14 shares (1- 1 / 3
shares with respect to shares
restored from grants made prior to the date of stockholder approval
of this amended and restated Plan) for each share so
restored.
(c) Adjustment Upon Changes
in Capitalization . If any change is made to the Common
Stock (whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, combination of
shares, or exchange of shares or any other change in capital
structure made without receipt of consideration), then unless such
event or change results in the termination of all outstanding
Grants under the Plan, the Committee shall preserve the value of
the outstanding Grants by adjusting the maximum number and class of
shares issuable under the Plan to reflect the effect of such event
or change in the Company’s capital structure, and by making
appropriate adjustments to the number and class of shares, the
exercise price of each outstanding Grant and otherwise. Any
fractional shares resulting from such adjustments shall be
eliminated by rounding any portion of a share equal to .500 or
greater up, and any portion of a share equal to less than .500
down, in each case to the nearest whole number.
4. Administration
(a) Composition of
Committee . The Plan shall be administered and interpreted
by the Compensation and Human Resources Committee of the Board or
such other committee of the Board as may be appointed from time to
time by the Board (the “Committee”); provided,
however , that grant decisions made hereunder shall be made by
at least two members of the Committee, each of whom shall be
(i) “outside directors” as defined under
Section 162(m) of the Code, (ii) “non-employee
directors” as defined in Rule 16b-3 under the Exchange Act,
and
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(iii) “independent directors”
under the rules and regulations of the New York Stock Exchange or
such other securities exchange on which the Common Stock is then
listed. A majority of the independent directors of the Company, in
their sole discretion, may exercise any or all authority of the
Committee under the Plan in lieu of the Committee, and in such
instances references herein to the Committee shall be deemed to
refer to such directors.
(b) Powers of the
Committee . Subject to the express provisions and
limitations set forth in this Plan, the Committee shall have the
sole authority to determine: (i) who from among the Eligible
Participants will receive Grants under the Plan, (ii) the
type, size and terms of each Grant under the Plan, (iii) the
time when each Grant will be made and the duration of any exercise
or restriction periods, including following termination of the
Grantee’s service relationship (which periods may be
extended, subject to the original term, at the Committee’s
discretion), (iv) any restrictions on resale applicable to the
shares to be issued or transferred pursuant to the Grant, and
(v) any other matters arising under the Plan. A majority of
the Committee shall constitute a quorum thereof, and the actions of
a majority of the members of the Committee at a meeting at which a
quorum is present, or actions unanimously approved in writing by
all members of the Committee, shall constitute actions of the
Committee; provided, however , that the Committee may also
act by delegated authority pursuant to Section 4(c) below. The
Committee shall have full power and discretionary authority to
administer and interpret the Plan and to adopt or amend such rules,
procedures, agreements and instruments as it may deem appropriate
for the proper administration of the Plan. The Committee’s
interpretations of the Plan and all determinations made by the
Committee pursuant to the powers vested in it hereunder shall be
conclusive and binding on all persons having any interest in the
Plan or in any Grants under the Plan. No person acting under this
Section 4 shall be held liable for any action or determination
made with respect to the Plan or any Grant under the Plan, except
for the willful misconduct or gross negligence of such person. All
Grants shall be made conditional upon the Participant’s
acknowledgment, by acceptance of the Grant, that all decisions and
determinations of the Committee shall be final and binding on the
Participant, his or her beneficiaries and any other person having
or claiming an interest under such Grant.
(c) Delegation and
Administrative Action. The Committee may delegate to one
or more separate committees (any such committee, a
“Subcommittee”) composed of at least two members of the
Committee, one of whom shall be the member then serving as the
chairman of the Committee, the ability to make Grants, as provided
in Section 4(b) above, and to exercise all powers of the
Committee described herein. Any such actions of a Subcommittee
shall be treated for all purposes as if taken by the Committee. The
Committee may delegate certain administrative matters under the
Plan to an officer or officers of the Company, and such
administrator(s) may have the authority to execute and distribute
Grant Letters in accordance with the Committee’s
determinations, to maintain records relating to the granting,
vesting, exercise, forfeiture or expiration of Grants, to process
or oversee the issuance of shares or cash upon the exercise,
vesting and/or settlement of a Grant, and to take such other
administrative actions as the Committee may specify. Any delegation
by the Committee pursuant to this Section 4(c) shall be
subject to and limited by applicable law or regulation, including
without limitation the General Corporation Law of the State of
Delaware and the rules and regulations of the New York Stock
Exchange or such other securities exchange on which the Common
Stock is then listed.
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5. Eligibility for Participation
Officers and other employees of the
Company, non-employee members of the Board, and consultants and
advisors to the Company, shall be eligible to participate in the
Plan (referred to individually as an “Eligible
Participant” and collectively as “Eligible
Participants”). Only Eligible Participants who are officers
or other employees of the Company or a Parent Corporation or
Subsidiary Corporation shall be eligible to receive Incentive Stock
Options and Performance Share Awards. All Eligible Participants
shall be eligible to receive Nonqualified Stock Options, Restricted
Stock Grants, Restricted Stock Units, SARs and Phantom Stock. Those
Eligible Participants who are selected by the Committee to receive
Grants under the Plan are referred to individually as a
“Grantee” and collectively as the
“Grantees.” With respect to a Grantee who is an
employee of the Company, a leave of absence by the Grantee, if in
accordance with Company policy or otherwise approved by the
Company, shall not be deemed a termination or interruption of the
continuous employment of the Grantee for purposes of the
Plan.
6. Stock Options
(a) Grant and Number of
Shares . The Committee may grant stock options as provided
in this Section 6. The Committee, in its sole discretion,
shall determine the number of shares of Common Stock that will be
subject to each option.
(b) Type of Option and
Exercise Price.
(1) The Committee may grant options
qualifying as incentive stock options within the meaning of
Section 422 of the Code (“Incentive Stock
Options”) and other stock options (“Nonqualified Stock
Options”), in accordance with the terms and conditions set
forth herein, or may grant any combination of Incentive Stock
Options and Nonqualified Stock Options (hereinafter referred to
collectively as “Stock Options”). The option exercise
price per share of each Stock Option shall not be less than the
fair market value of a share of Common Stock on the date of grant
(as determined pursuant to Section 6(b)(2) below).
Notwithstanding the preceding sentence, if the Grantee of an
Incentive Stock Option is the owner of Common Stock (as determined
under section 424(d) of the Code) who possesses more than 10% of
the total combined voting power of all classes of stock of the
Company or a Parent Corporation or Subsidiary Corporation, the
option exercise price per share in the case of such Incentive Stock
Option shall not be less than 110% of the fair market value of a
share of Common Stock on the date of grant.
(2) For all valuation purposes under
the Plan, the “fair market value” of a share of Common
Stock shall be the closing price at which the Common Stock shall
have been sold regular way on the New York Stock Exchange on the
date as of which such value is being determined or, if no sales
occurred on such day, then on the next preceding day on which there
were such sales, or, if at any time the Common Stock shall not be
listed on the New York Stock Exchange, the fair market value as
determined by the Committee on the basis of available prices for
such Common Stock or in such manner as may be authorized by
applicable regulations under the Code.
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(c) Exercise Period
. The Committee shall determine the option exercise period of
each Stock Option. The exercise period shall not exceed ten years
from the date of grant. However, if the Grantee of an Incentive
Stock Option is the owner of Common Stock (as determined under
Section 424(d) of the Code) who possesses more than 10% of the
total combined voting power of all classes of stock of the Company
or a Parent Corporation or Subsidiary Corporation, the exercise
period shall not exceed five years.
(d) Vesting of Options;
Restrictions on Shares; Acceleration of Vesting . The
vesting period for Stock Options shall commence on the date of
grant and shall end on the date or dates, determined by the
Committee, that shall be specified in the Grant Letter;
provided, however , that unless otherwise specified in the
Grant Letter, each Stock Option shall vest and become exercisable
in cumulative installments to the extent of 25% of the number of
shares originally covered thereby on and after the first, second,
third and fourth anniversaries of the grant of the Stock Option, if
on such anniversary the Grantee remains an Eligible Participant.
The Committee may impose upon the shares of Common Stock issuable
upon the exercise of a Stock Option such restrictions as it deems
appropriate and specifies in the Grant Letter. During any period in
which such restrictions apply, the provisions of Section 7(d)
below shall be applicable to such shares. Notwithstanding any other
provision of the Plan or any Grant Letter, all outstanding Stock
Options shall become immediately fully vested and exercisable upon
the earliest to occur of the following, if at such time the Grantee
remains an Eligible Participant: (i) the Grantee’s
Retirement (as defined below in the case of an employee or a
non-employee director), (ii) five years from the date of the
Grant, or (iii) the Grantee’s death or Disability (as
defined below). Notwithstanding anything in the Plan to the
contrary, (i) Stock Options granted before May 13, 2009
shall become immediately fully vested and exercisable upon a Change
of Control of the Company, and (ii) with respect to Stock
Options granted on or after May 13, 2009, the Committee shall
specify in the Grant Letter the circumstances under which Stock
Options shall become vested and exercisable in the event of a
Change of Control of the Company. For purposes of this Plan:
(1) the term “Retirement” applies only to a
Grantee who is an employee of the Company or a Parent Corporation
or Subsidiary Corporation, or a non-employee director, and shall
mean either (A) separation from service following the
Grantee’s attainment of age 65 and the completion of at least
5 years of credited service, or (B) separation from service
following the Grantee’s attainment of age 55 and the
completion of at least 10 years of credited service, and
(2) for the avoidance of doubt, the provisions of the Plan
that refer to “Retirement” shall not apply to a Grantee
who is a consultant or advisor. For purposes of this Plan,
“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. Notwithstanding anything to the contrary
herein, the Committee may modify the definition of Disability for a
particular Grant as the Committee deems appropriate in the Gant
Letter issued with respect to such Grant.
(e) Manner of Exercise
. A Grantee may exercise a Stock Option by delivering a duly
completed notice of exercise to the Company. Unless other
arrangements satisfactory to the Company are made, no shares of
Common Stock shall be issued on the exercise of a Stock
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Option unless paid for in full at the time of
purchase. Payment for shares of Common Stock purchased upon the
exercise of a Stock Option shall be made (i) in cash or,
(ii) subject to such conditions as may be established by the
Committee, (1) by tendering (actually or by attestation)
shares of Common Stock valued at the then fair market value
thereof, (2) by authorizing a third party to sell shares of
Common Stock acquired upon exercise of the Stock Option and remit
to the Company a sufficient portion of the sale proceeds to pay the
exercise price and any tax withholding resulting from such
exercise, or (3) by any combination of the foregoing. The
shares of Common Stock so purchased will be issued and delivered to
the person entitled thereto at the Company’s corporate
headquarters in Philadelphia, Pennsylvania or, at the
Company’s sole discretion, by book entry into a brokerage or
other account designated by the Company for such purpose. No person
shall have any rights as a stockholder with respect to any share of
Common Stock covered by a Stock Option unless and until such person
shall have become the holder of record of such share, and, except
as otherwise permitted in Section 3(c) hereof, no adjustment
shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property or distributions or other
rights) in respect of such share for which the record date is prior
to the date on which such person shall have become the holder of
record thereof.
(f) Termination,
Retirement, Disability or Death.
(1) Except as otherwise specified in
the Grant Letter: (A) If a Grantee is an employee, consultant
or advisor and ceases to be an Eligible Participant for any reason
other than involuntary termination of employment by the Company,
Retirement, Disability or death, any Stock Option which is
otherwise exercisable by the Grantee shall terminate unless
exercised by the Grantee within 90 days after the date on which the
Grantee ceases to be an Eligible Participant (or within such other
period of time, which may be longer or shorter than 90 days,
specified in the Grant Letter), but in any event no later than the
date of expiration of the option exercise period. (B) If a
Grantee is an employee and ceases to be an Eligible Participant as
a result of his or her involuntary termination of employment by the
Company without Cause, any Stock Option which is otherwise
exercisable by the Grantee shall terminate unless exercised by the
Grantee within one year after the date on which the Grantee ceases
to be an Eligible Participant (or within such other period of time,
which may be longer or shorter than one year, specified in the
Grant Letter), but in any event no later than the date of
expiration of the option exercise period. (C) In the event of
the Retirement, Disability or death of a Grantee, any Stock Option
held by such Grantee may be exercised by the Grantee (or the
Grantee’s personal representative) at any time prior to the
date of expiration of the option exercise period (or within such
shorter period of time as may be specified in the Grant Letter).
(D) In the event a Grantee’s employment or service
relationship is terminated by the Company for Cause, any Stock
Option held by such Grantee shall immediately terminate and be of
no further force or effect.
(2) In the case of a Grantee who is
a non-employee director, then notwithstanding Section 6(f)(1)
above: (A) In the event of the Retirement or other voluntary
departure from the Board, Disability or death of such Grantee, any
Stock Option which was otherwise, or which becomes, exercisable by
such Grantee at the date of such Retirement, other voluntary
departure from the Board, Disability or death, may be exercised by
the Grantee (or the Grantee’s personal representative) at any
time prior to the date of expiration of the option
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exercise period.
(B) Notwithstanding the provisions of clause (A) above,
however, in the event of such Grantee’s failure to be
nominated for reelection to the Board or failure to be reelected
after nomination, any Stock Option which is otherwise exercisable
by the Grantee shall terminate unless exercised by the Grantee
within one year after the date on which the Grantee ceases to be an
Eligible Participant (or within such other period of time, which
may be longer or shorter than one year, as may be specified in the
Grant Letter), but in any event no later than the date of
expiration of the option exercise period. (C) In the event of
such Grantee’s removal from the Board for Cause, any Stock
Option held by such Grantee shall immediately terminate and be of
no further force or effect.
(3) For the avoidance of doubt, the
shares of Common Stock as to which a Stock Option is exercisable
upon the happening of any event specified in this Section 6(f)
shall include any shares as to which vesting shall be accelerated
by operation of Section 6(d).
(g) Limits on Incentive
Stock Options . Each Grant of an Incentive Stock Option
shall provide that:
(1) the Incentive Stock Option is
not transferable by the Grantee, except, in the case of an
individual Grantee, by will or the laws of descent and
distribution;
(2) the Incentive Stock Option is
exercisable only by the Grantee, except as otherwise provided
herein or in the Grant Letter in the event of the death of an
individual Grantee; and
(3) the aggregate fair market value
of the Common Stock on the date of the Grant with respect to which
Incentive Stock Options are exercisable for the first time by a
Grantee during any calendar year under the Plan and under any other
stock option plan of the Company shall not exceed
$100,000.
To the extent that any portion of a
purported Incentive Stock Option shall fail or shall cease to
qualify as an “incentive stock option” under the Code,
such portion shall thereafter be deemed to be, and shall be
interpreted as, a Nonqualified Stock Option for all purposes
hereunder.
(h) Exchange Act
Limitation. Unless the Grantee could otherwise transfer
Common Stock issued pursuant to the Stock Option without incurring
liability under Section 16(b) of the Exchange Act, at least
six months must elapse from the date of acquisition of the Stock
Option until the date of disposition of the Common Stock issued
upon exercise thereof.
7. Restricted Stock Grants and
Restricted Stock Units
The Committee may (i) issue
shares of Common Stock to an Eligible Participant subject to such
restrictions as the Committee shall determine (a “Restricted
Stock Grant”), or (ii) grant to an Eligible Participant
the right to receive shares of Common Stock, or, if so designated
in the Grant Letter, cash equal to the fair market value of shares
of Common Stock, upon the lapsing of such restrictions as the
Committee shall determine (“Restricted Stock Units”).
The following provisions are applicable to Restricted Stock Grants
and Restricted Stock Units:
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(a) General
Requirements . Shares of Common Stock issued pursuant to
Restricted Stock Grants or Restricted Stock Units will be issued in
consideration for cash or past or future services rendered having a
value, as determined by the Committee, at least equal to the par
value thereof. All conditions and restrictions imposed under each
Restricted Stock Grant or grant of Restricted Stock Units, and the
vesting or performance period during which the Restricted Stock
Grant or Restricted Stock Units will remain subject to such
restrictions, shall be set forth in the Grant Letter and designated
therein as the “Restriction Period.” The restrictions
imposed under any Restricted Stock Grant or grant of Restricted
Stock Units shall lapse on such vesting date or dates as the
Committee may approve until the restrictions have lapsed as to 100%
of the shares, except as vesting may be accelerated pursuant to
Section 7(c) below. In the case of a Restricted Stock Grant,
on the grant date, the specified number of shares of Restricted
Stock shall be issued subject to the provisions of this
Section 7. Provided that all conditions to the vesting of a
share of Restricted Stock imposed pursuant to this Section 7
are satisfied, upon the occurrence of the vesting date with respect
to a share of Restricted Stock, such share shall vest, subject to
any continuing restrictions of this Plan or the Grant Letter. In
the case of Restricted Stock Units, on the grant date, the Company
shall credit to a bookkeeping account established on its records
the specified number of Restricted Stock Units awarded to the
Grantee (without the creation of any trust or segregated account).
Provided that all conditions to the vesting of Restricted Stock
Units imposed pursuant to this Section 7 are satisfied, upon
the occurrence of the vesting date with respect to Restricted Stock
Units, such units shall vest and the Grantee shall receive upon
vesting or upon such later date as shall be specified in the Grant
Letter (the “RSU Conversion Date”), as determined by
the Committee in the Grant Letter, either (i) a share of
Common Stock for each such Restricted Stock Unit, subject to any
continuing restrictions of this Plan or the Grant Letter, or
(ii) an amount in cash that is equal to the fair market value
of a share of Common Stock as of the RSU Conversion Date for each
such Restricted Stock Unit.
(b) Number of Shares
. The Committee, in its sole discretion, shall determine the
number of shares of Common Stock that will be subject to each
Restricted Stock Grant or the number of Restricted Stock Units to
be granted. Payments with respect to Restricted Stock Units may be
made in cash, in Common Stock, or in a combination of the two, as
determined by the Committee in the Grant Letter.
(c) Requirement of Service
Relationship with Company . Except as otherwise specified
in the Grant Letter, if the Grantee’s service relationship
with the Company, whether as an employee, director, consultant,
advisor or otherwise, terminates during the period designated in
the Grant Letter as the Restriction Period, the Restricted Stock
Grant or grant of Restricted Stock Units shall terminate as to all
shares covered by the Grant as to which restrictions on transfer
have not lapsed, and in the case of Restricted Stock, such shares
shall be immediately forfeited to the Company. The Restriction
Period for any Restricted Stock Grant or Restricted Stock Units the
vesting of which is based upon a continuing service relationship
with the Company shall be a minimum of three years from the grant
date, and the Restriction Period for any Restricted Stock Grant or
grant of Restricted Stock Units that is based upon performance
criteria shall be based upon performance over a minimum period of
one year. Notwithstanding the foregoing, however, in the event of
the termination of the Grantee’s service relationship with
the Company as a result of the Grantee’s Retirement, death or
Disability, the Restriction Period shall be deemed
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immediately terminated, all restrictions on the
transfer of shares subject to any Restricted Stock Grant or grant
of Restricted Stock Units shall immediately lapse, and all such
shares shall become fully vested. Notwithstanding anything in the
Plan to the contrary, (i) Restricted Stock Grants and
Restricted Stock Units granted before May 13, 2009 shall
become immediately fully vested upon a Change of Control of the
Company, and (ii) with respect to Restricted Stock Grants and
Restricted Stock Units granted on or after May 13, 2009, the
Committee shall specify in the Grant Letter the circumstances under
which the Restricted Stock Grant
