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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 reasonable and necessary to protect
and preserve the legitimate interests, properties, goodwill and
business of the Company, that the Company would not have entered
into this Agreement in the absence of such restr
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