Exhibit
10.1
TRANSITION
AGREEMENT
AND GENERAL
RELEASE
THIS AGREEMENT, made and entered
into on this 9th day of January, 2007, by and between Radian Group
Inc. a Delaware corporation (hereinafter “Radian” or
the “Company”), and Roy Kasmar
(“Executive”), reads as follows:
I. BACKGROUND
A. The Company currently employs
Executive. The Company and Executive have mutually agreed to
terminate Executive’s employment effective March 1, 2008
(the “Termination Date”). The Company and Executive
agree that this Agreement shall constitute the “Notice”
required by the Retention Agreement, as defined below, and between
the date of this Agreement and the Termination Date, Executive
shall continue as an employee of the Company as set forth
below.
B. In appreciation for
Executive’s dedicated and successful service to the Company
and in exchange for all of Executive’s undertakings in this
Agreement, the Company and Executive wish to enter into an
agreement to (i) provide releases by Executive of the Company
as to any claims that might be asserted by the Executive, as
further described herein, and (ii) assuming that Executive
complies with, executes, and does not revoke this Agreement and the
Second Release, as defined below, provide Executive with the
benefits and entitlements as provided herein.
II. SUBSTANTIVE
PROVISIONS
In consideration of the mutual
promises contained in this Agreement, the Company and Executive,
intending to be legally bound, agree as follows:
1. Executive and the Company agree
that, except as specifically provided below, the Retention
Agreement previously entered into by Executive and the Company
dated February 14, 2005 (the “Retention
Agreement”) was fully satisfied as of December 31, 2006
and all benefits and payments were made or will be made as promptly
as possible. Executive and the Company also agree that the change
in control agreement between Executive and the Company dated
March 12. 1999 (the “CIC Agreement”) will
terminate and be of no further force or effect on July 1,
2007. In the event (a) a “Change of Control”
occurs, within the meaning of the CIC Agreement, before
July 1, 2007, and (b) Executive’s
“Termination following a Change of Control” occurs,
within the meaning of the CIC Agreement, on or before March 1,
2008, then Executive shall receive all Benefits upon a Change of
Control and Other Payments, as described in Paragraphs 3 and 4 of
the CIC Agreement, provided that for the purpose of calculating the
cash payment in Paragraph 3(b)(ii) of the CIC Agreement,
Executive’s “current target bonus eligibility”
shall be $682,500. Amounts received by Executive pursuant to this
Agreement shall be an offset against any amounts payable under the
CIC Agreement, provided that Executive receives the greater of the
total amount due either under this Agreement or under the CIC
Agreement.
2. Executive shall continue as an
employee of the Company until the Termination Date; provided,
however, that Executive may choose to resign at any time after
December 31, 2007 (the date of resignation then becoming the
“Termination Date”), in which case his severance pay,
as described in subsection (k) below, shall commence on the
date of resignation and continue for the next 120 days only and all
other provisions of this Agreement shall be adjusted
accordingly.
(a) Until March 31, 2007,
Executive’s principal function shall be to transition the
Company’s international mortgage group to his
successor.
(b) On April 1, 2007, Executive
shall relinquish the title of President, Radian Group, and except
as provided below shall no longer serve as an executive officer of
the Company or an officer or director of any subsidiaries, and
shall perform those reasonable duties, consistent with his
knowledge and experience with the Company, requested of him by the
Company’s Chief Executive Officer (the “CEO”),
including supporting the new head of international mortgage
services, serving as an advisor to the CEO, working on the
Company’s re-engineering project, continuing as a board
member of Radian Europe Limited and of Radian Australia and as a
member of the Company’s Executive Risk Committee, among other
things, until the Termination Date.
(c) For the full period of this
Agreement through the Termination Date, Executive shall receive his
current base salary, at the monthly rate (prior to any deductions)
in effect for Executive on the date of this Agreement,
(d) Executive shall receive his 2006
bonus and long-term incentive payout in cash at 100% of target at
such time as such payments are received by, or shares are issued to
(but, in any event, no later than May 31, 2007), other Company
executives;
(e) Executive’s principal
business location, beginning on January 1, 2007 through the
Termination Date, shall be in Florida. Executive shall not be
required to travel more than 5 days per calendar month in
performing his duties pursuant to this Agreement.
(f) Through the Termination Date,
Executive shall continue to be subject to, and eligible for, all of
the Company’s regular benefits and perquisites, policies and
programs for executives generally.
(g) As soon as practicable after the
Termination Date, Executive shall receive conversion rights under
those welfare benefit plans of the Company in which he participated
and which provide for such rights and be entitled to COBRA health
care continuation coverage under section 4980B of the Internal
Revenue Code of 1986, as amended (the “Internal Revenue
Code”). All other employee and executive benefits not so
converted shall cease on the Termination Date.
(h) As soon as practicable after the
Termination Date, Executive shall be paid for all unused personal
and vacation time.
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(i) Executive shall continue to be
reimbursed for customary and reasonable business expenses in
accordance with the Company’s policy for executives
generally.
(j) Through the Termination Date,
Executive shall continue to vest in all equity grants made to him
prior to the date of this Agreement but shall not be eligible for
additional such grants after December 31, 2006 except with
respect to the 2006 long term incentive payout referred to in
Section 2(d).
(k) Assuming the execution and
non-revocation of the Second Release, for the period from the
Termination Date through June 30, 2008, Executive shall
receive severance pay equal to the amount of his current base
salary, at the monthly rate (prior to any deductions) in effect on
the date of this Agreement and his COBRA health care continuation
coverage period under section 4980B of the Internal Revenue Code of
1986, as amended (the “Code”), shall commence upon the
Termination Date but Executive shall also receive, as severance
pay, an additional payment equal to the cost of such coverage
through June 30, 2008.
Except to the extent provided in
Section 6(a) below, all payments and benefits due in
accordance with the terms of this Section 2 shall be made to
Executive (or his estate) regardless of whether he dies or becomes
disabled following the date of this Agreement and prior to payment
being made. In addition to the foregoing, and not conditioned on
the execution of this Agreement, Executive shall receive all
benefits due under any employee benefit plans or programs under
which Executive participated and under which Executive has accrued
and become or may become entitled to benefits, other than under any
Company separation or severance plan or programs, in accordance
with the terms of the applicable plan or program and applicable
law. Notwithstanding anything in this Agreement to the contrary, no
payments shall be made prior to the time permitted under section
409A of the Code.
3. Executive agrees and acknowledges
that the Company, on a timely basis, has paid, or agreed to pay, to
Executive all other amounts due and owing based on his prior
services and that the Company has no obligation, contractual or
otherwise to Executive, except as provided herein, nor does it have
any obligation to hire, rehire or re-employ Executive after the
Termination Date. Executive acknowledges that the Company is not
required to enter into this Agreement and that the provisions of
this Agreement will provide Executive with payments and benefits
that are in excess of that to which Executive otherwise would have
been entitled under the Retention Agreement.
4.(a) Until the Termination Date,
Executive shall have no other employment or consulting
relationships. Thereafter, Executive agrees and acknowledges that
by reason of his employment by and service to the Company, he has
had access to confidential information of the Company, and,
therefore, Executive hereby reaffirms his obligations under, and
agrees that he shall continue to be subject to, the terms of
Section 5 of the Retention Agreement notwithstanding the
termination of the Retention Agreement. In addition, while
receiving any form of payment under this Agreement after the
Termination Date, Executive hereby agrees that (i) he will
not, without the Company’s express written consent, engage
(directly or indirectly) in any employment or business activity
whose primary business involves or is related to (directly or
indirectly) providing mortgage insurance or financial guaranty
to
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financial institutions located throughout the
United States of America and the World, and (ii) he will not ,
either directly or through others, solicit, divert or appropriate,
or attempt to solicit, divert or appropriate any customer or
actively sought prospective customer of the Company for the purpose
of providing such customer or actively sought prospective customer
with services or products competitive with those offered by the
Company on the Termination Date.
(b) For the purposes of this
Section 4, Section 5, Section 6, and Section 7,
the term “Company” shall be deemed to include Radian
and the subsidiaries and affiliates of Radian, but nothing herein
shall be seemed to expand Executive’s obligations under
Section 4 above.
5.(a) Executive acknowledges and
agrees that the restrictions contained in Section 4 are
re
