EXHIBIT 10.2
RADIAN GROUP INC.
PERFORMANCE SHARE
PLAN
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1.
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Purpose. The purpose of the Radian Group Inc. Performance
Share Plan (the “Plan”) is to enhance the long-term
stockholder value of Radian Group Inc. (the “Company”)
by reinforcing the incentives of the Company’s key employees
to achieve the Company’s long-term performance goals; to link
a significant portion of a participant’s compensation to the
achievement by the Company of such performance goals and to the
value of the Company’s Common Stock, par value $0.001 per
share (the “Common Stock”); and to attract and motivate
key employees and to encourage their continued employment on a
competitive basis. The purposes of the Plan are to be achieved by
the grant of Performance Share Awards, as defined below.
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2.
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Eligibility
and Participation. Key
employees of the Company who, through their position or
performance, can have a significant, positive impact on the
Company’s financial results, shall be eligible to participate
in the Plan. The Compensation and Human Resources Committee of the
Company’s Board of Directors (the “Committee”)
shall select the recipients of Performance Share Awards (the
“Participants”). Newly-hired and newly-promoted
employees may be selected as Participants subject to the provisions
of Section 3(d)(ii), if applicable.
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3.
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Performance
Share Awards.
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(a)
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Performance
Share Award Defined. A
“Performance Share Award” is a right to receive shares
of Common Stock, or a payment of the value thereof in cash,
contingent on the achievement of certain performance goals of the
Company specified by the Committee. A Performance Share Award shall
be subject to such conditions, restrictions and contingencies as
the Committee shall determine.
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(b)
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Combined
Award Under Stock Plan. Each Performance Share Award shall be deemed to
be a combined award under the Plan and under the Company’s
Equity Compensation Plan, as amended, or under any successor to
such plan (the “Stock Plan”). Any shares of Common
Stock to be issued pursuant to a Performance Share Award shall be
issued under and pursuant to the Stock Plan, and shall be subject
to the terms and conditions of the Stock Plan and of any grant
agreement issued thereunder.
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(c)
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Award
Term. Performance Share
Awards will be measured over such period of time as shall be
established by the Committee (the “Award Term”). Unless
the Committee determines otherwise, the Award Term shall be a
period of three consecutive fiscal years of the Company. Award
Terms may be of varying and overlapping durations. Performance
Share Awards shall be subject to forfeiture until the conclusion of
the Award Term except as may otherwise be provided in Section 3(f)
below.
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(d)
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Section
162(m) Conditions. Performance Share Awards may be designated as
“performance-based compensation” as that term is used
in Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”).
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(i)
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Performance Goals. The performance goal criteria
(“Performance Goals”) that may be used by the Committee
in granting Performance Share Awards shall include one or more of
the following, as selected by the Committee:
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•
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growth in
earnings per share;
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•
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growth in
adjusted book value; and
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The Performance Goals may be
measured with respect to the Company alone on an absolute basis, on
a relative or comparative basis with such peer companies or index
as the Committee may select, or in such combination thereof as may
be determined by the Committee. Performance Goals may be based on
the performance of the Company as a whole, or on the performance of
a specified business unit or subsidiary. Performance Goals may be
established on a cumulative basis, in the alternative, or in the
form of a matrix combining various Performance Goals and weighting
them in any manner that the Committee may determine.
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(ii)
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Establishment of Performance
Goals. Performance
Share Awards designated as “performance-based
compensation” for purposes of Section 162(m) of the Code
shall be granted, and Performance Goals shall be established, by
the Committee in writing not later than 90 days after the
commencement of the period of service to which the Performance
Goals relate, or by such other date as may be required under
Section 162(m) of the Code, provided that the outcome is
substantially uncertain at the time the Committee establishes the
Performance Goals. Following the establishment of the Performance
Goals, the Committee shall advise each Participant, through the
issuance of a “Grant Letter” under the Stock Plan, as
to the target award and specific Performance Goals applicable to
his or her Performance Share Award, and the method or formula for
determining the payouts correlating to a range of performance
results over the Award Term.
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(iii)
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Section
162(m) Maximum Award Limit. With respect to a Performance Share Award that
is designated as “performance-based compensation” for
purposes of Section 162(m) of the Code, the maximum number of
shares of Common Stock that may be issued under the award shall be
set at the time the Committee grants the award and establishes
Performance Goals
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2
under the award. Notwithstanding any
other provision of this Plan, the maximum payout under any
Performance Share Award may not exceed 250,000 shares of Common
Stock, or its equivalent dollar value, as of the end of the Award
Term, subject to adjustment as provided in Section 4 and under the
Stock Plan.
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(iv)
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Certification by Committee.
Before any payment in shares of
Common Stock or cash is made under a Performance Share Award to any
Participant who is a person referred to in Section 162(m) of the
Code, the Committee must certify in writing that the Performance
Goals and any other material terms established with respect to such
Performance Share Award have been achieved. To the extent necessary
with respect to any fiscal year or Award Term, in order to avoid
any undue windfall or hardship due to external causes, the
Committee may make the determination as to whether a specific
Performance Goal has been achieved without regard to the effect of
any change in accounting standards, any acquisition or disposition
by the Company not planned for at the time the Performance Goals
were established or any other extraordinary, unusual or
non-recurring event or item that would otherwise impact the
Company’s reported financial performance. With respect to any
Participant who is a person referred to in Section 162(m) of the
Code, the Committee shall have the discretion to decrease an award
payout under a Performance Share Award for circumstances that the
Committee deems warranted, but may not under any circumstances
increase such amount.
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(e)
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Settlement
of Awards. Upon the
conclusion of the Award Term of a Performance Share Award, the
Company’s determination of the amount of the payout, if any,
to which the Participant is entitled, and the certification by the
Committee, if applicable, as provided in Section 3(d)(iv) above,
the Participant may direct the form of settlement of the
Performance Share Award, by written notice to the Company, as
follows. With respect to any Participant who is then in
complian
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