EXHIBIT 10.3
RADIAN GROUP INC.
FORM OF PERFORMANCE SHARE AWARD
AGREEMENT
This Agreement
is entered into as of [
, 20 ,] by and between [
] (“Executive” or “you”) and Radian Group
Inc., a Delaware corporation (“Radian” or
“we”), to set forth the terms and conditions of a
Performance Share Award granted to you by the Compensation and
Human Resources Committee of Radian’s Board of Directors (the
“Committee”) pursuant to the Radian Group Inc.
Performance Share Plan (the “Plan”). Capitalized terms
used herein and not defined shall have the meanings given to them
under the Plan.
1. Performance Share Award.
Radian hereby grants to you a Performance Share Award under the
Plan, for a performance period to be measured over the following
three (3) Radian fiscal years: 2005, 2006 and 2007 (the
“Award Term”), subject to the terms and conditions of
this Agreement and of the Plan and to your consent to those terms
and conditions. This Agreement shall also constitute a grant of a
Performance Share Award under and pursuant to the Radian Group Inc.
Equity Compensation Plan, and shall be subject to the terms
thereof.
a. Nature of Award. A
Performance Share Award is a right to receive shares of Radian
Common Stock, par value $0.001 per share (the “Common
Stock”), a payment of the value thereof in cash, or a
combination of shares and cash (in each case, a
“Payout”), contingent on the achievement of the
Performance Goals specified herein.
b. Performance Goals and
Target Levels. Exhibit A which is attached hereto
and forms a part hereof sets forth, among other information
determined by the Committee:
(i) your applicable Target
Performance Share Award (your “Target
Payout”);
(ii) a series of matrices for
determining, with respect to each of three (3) specified
performance criteria, your potential Payout as a percentage of your
Target Payout, under specified combinations of absolute and
relative financial performance by Radian (the “Performance
Goals”); and
(iii) the method of calculating your
actual Payout, if any, based on the relative weights assigned the
Performance Goals by the Committee.
c. Form of Payout.
Your Payout, if any, may be in the form of shares of Common Stock
or cash, at your option, to the extent provided in Section 3(e) of
the Plan. Such section may limit your discretion to elect the form
of Payout.
d. Stockholder
Approval. This Performance Share Award is subject to and
contingent upon approval by Radian’s stockholders of the Plan
or the material terms thereof at Radian’s 2005 Annual Meeting
of Stockholders.
2. Important Considerations
Regarding Potential Payout . If the Performance Goals are
achieved at 100% of target levels, you will receive your Target
Payout. If the Performance Goals are achieved at levels above or
below the target levels, the Payout you will receive will be
increased or reduced, including to zero, in accordance with
Exhibit A and as provided in the Plan. You may not receive a
greater number of shares of Common Stock or cash than the Maximum
Potential Payout set forth on Exhibit A .
The Target Payout referred to in this Agreement
is used solely as a component of a formula to calculate the actual
Payout, if any, in accordance with this Agreement, and does not
create any separate right or entitlement. THE ACTUAL PAYOUT, IF
ANY, WILL BE CALCULATED FOLLOWING THE FISCAL YEAR ENDING DECEMBER
31, 2007, BASED ON THE METRICS AND METHODOLOGIES DESCRIBED IN
EXHIBIT A, AND BASED ON ANY ADJUSTMENTS PERMITTED UNDER THE PLAN OR
THIS AGREEMENT.
This Agreement represents Radian’s
unfunded and unsecured promise to issue Common Shares or cash at a
future date, subject to the terms of this Agreement and the Plan.
Executive has no rights under this Agreement other than the rights
of a general unsecured creditor.
The metrics and methodologies set forth in
Exhibit A measure Radian’s performance on an absolute
basis and relative to its peers. Such performance will be measured
using the methods and procedures that Radian uses for its business
purposes, and these methods and procedures may change without
notice or consent.
If there is a significant change in accounting
rules or in Radian’s business or business strategy (for
example, an extraordinary event, acquisition or divestiture), as
the Committee determines in its sole discretion, the Committee may
adjust the calculation of the Performance Goals in such manner as
they consider appropriate in light of the change.
The final determination of the Payout to which
the Executive is entitled will be made by the Committee in its sole
discreti
