Exhibit 10.2

 

RADIAN VOLUNTARY DEFERRED

COMPENSATION PLAN FOR OFFICERS

 

Amended and Restated December 12, 2005

 

ARTICLE I - Definitions

 

“Account” shall mean a bookkeeping record of the accumulated contributions
determined for each Participant, including any earnings credited to or debited
from such contributions. Except as provided in Section 3.07, a Participant’s
Account shall be fully vested and nonforfeitable at all times.

 

“Benefit Commencement Date” means the date irrevocably elected by the
Participant pursuant to Section 2.04.

 

“Board” means the Board of Directors of Radian Group Inc.

 

“Company” means Radian Group Inc., a Delaware corporation, and its corporate
successors and assigns, and any Subsidiary which is authorized by the Board to
adopt this Plan by action of its board of directors or other governing body.

 

“Committee” means the Stock Option and Compensation Committee of the Board.

 

“Compensation” means annual bonuses paid to Participants after the close of each
calendar year for which the bonuses are earned.

 

“Contingent deferred obligation” means the total amount of the Company’s
contingent liability for payment of deferred benefits under the Plan.

 

“Deferred Compensation” means the amount of Compensation that a Participant has
irrevocably elected to defer under the terms of this Plan.

 

“Disabled” and “Disability” shall have the meanings assigned to such terms in
the Company’s disability plan.

 

“Eligible Executive” means an executive of the Company, or of a Subsidiary, who
has the rank of Senior Vice President or higher and such other officers of the
Company as the Committee may designate.

 

“Participant” means an Eligible Executive who elects to participate in the Plan,
and further differentiated as follows:

 

(i) “Active Participant”: A Participant who is an employee of the Company at the
time in question.

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(ii) “Inactive Participant”: A Participant who is not an employee of the Company
at the time in question.

 

“Plan” means this Voluntary Deferred Compensation Plan as it may be amended from
time to time.

 

“Plan Year” means the calendar year during which a Participant’s Compensation is
earned.

 

“Retirement” means a Participant’s retirement as defined under Radian’s Pension
Plan.

 

“Subsidiary” means a company of which the Company owns, directly or indirectly,
at least a majority of the shares having voting power in the election of
directors.

 

ARTICLE II - Designation of Participants and Payment of Account

 

Section 2.01. Each individual who is eligible to participate in the Plan shall
complete such forms and provide such data as are reasonably required by the
Committee as a precondition to Plan participation.

 

Section 2.02. Each Participant must fully complete the deferral election form
provided by the Company, irrevocably electing to reduce their Compensation by an
amount equal to between 10% and 100% in increments of 1% only. By making such
election, the Participant shall for all purposes be deemed conclusively to have
consented to the provisions of the Plan and to all subsequent amendments
thereto. For the first Plan Year (i.e., 1999), such forms must be filed prior to
January 1, 2000. With respect to all Plan Years other than the first Plan Year,
such forms must be filed prior to January 1 of such Plan Year or at such earlier
time as may be set by the Committee in its sole discretion. A separate deferral
election must be filed for each Plan Year.

 

Section 2.03. A Participant may elect to receive a single sum payment or annual
installment payments over a term of ten years.

 

Section 2.04. A Participant may elect to receive payments in January of any year
which is at least two (2) years following the Plan Year for such election. The
Benefit Commencement Date specified in the Participant’s deferral election shall
be accelerated upon the Participant’s death, Disability or Retirement.

 

Section 2.05. For amounts deferred in 2004 or earlier, a Participant shall have
the option of postponing an elected Benefit Commencement Date by making an
irrevocable election to roll over such election prior to the year in which such
benefit is payable. Such redeferral shall be for at least two (2) years from the
year of the original Benefit

 

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Commencement Date. A Participant shall make such election on a form designated
by the Committee. (For the avoidance of doubt, an amount deferred in 2004 or
earlier and any earnings thereon shall always be deemed to be “an amount
deferred in 2004 or earlier” for the purposes of this section regardless of how
many times or when such amount was redeferred as long as such amount was
redeferred in accordance with the terms of the Plan in existence on October 3,
2004.)

 

Section 2.06. For amounts deferred after 2004, a Participant shall have the
option of postponing an elected Benefit Commencement Date by making an
irrevocable election to roll over such election at least one (1) year prior to
the year in which such benefit is payable. Such redeferral shall be for at least
five (5) years from the year of the original Benefit Commencement Date. A
Participant shall make such election on a form designated by the Committee.

 

ARTICLE III - Contingent Future Payments, Earnings, Investments and Forfeitures

 

Section 3.01. The Committee shall cause an Account to be kept in the name of
each Participant which shall reflect the value of the deferred contingent
benefits payable to such Participant or beneficiary under the Plan. Each Account
shall be maintained for bookkeeping purposes only. Neither the Plan nor any of
the Accounts established under the Plan shall hold any actual funds or assets.

 

Section 3.02. As soon as practicable after each year, each Active Participant’s
Account shall be credited with earnings and debited with losses in accordance
with the annual rate of return option elected by the Participant on their
deferral election form. The annual rate of return election is irrevocable. The
annual rate of return options available under the Plan are:

 

(a) 200 basis points in excess of the average yield on 30-year U.S. Treasuries
in effect on the last business day of each month of the year;

 

(b) the Company’s reported return on equity (positive or negative) for the year,
using (i) the Company’s net income or loss after excluding expenses associated
with transactions that, in the opinion of the Committee, are extraordinary and
non-recurring, divided by (ii) the average of the common stockholders equity
calculated as the first day of the year and the last day of the year; and

 

(c) the change in the value of the Company’s Common Stock (positive or negative)
for the year.

 

In the event the Participant elects return option (c) above with regard to any
deferred amount, such deferred amount shall be increased by 20%. If in the two
years following the year of such deferral, the Participant (i) leaves the
Company’s employ for any reason other than their death, Disability or
Retirement, or (ii) makes an election under Section 5.07 or 5.08 to withdraw all
or any part of such deferred amount, then such 20% increase and the return
associated with such increase shall be deducted from their Account. (For

 

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example, if in a given year, the Participant defers $100,000 and elects return
option (c) above with regard to such amount, their Account shall be credited
with $120,000 and the Common Stock return shall be applied to the full $120,000.
If at any point in the two years following the year of such deferral, they elect
an early payment of all or any part of such amount or leave the Company’s employ
for any reason other than their death, Disability or Retirement, $20,000 and any
return associated with such $20,000 shall be deducted from their Account.)

 

Section 3.03. As soon as practicable after each year, each Inactive
Participant’s Account shall be credited with earnings based upon: (i) the
average yield on 5-year U.S. Treasuries on the last business day of each month
of such year plus 100 basis points if they left the Company’s employ because of
their death, Disability or Retirement, or (ii) the average yield on 30-year U.S.
Treasuries on the last business day of each month of such year if they left the
Company’s employ for any other reason. A Participant who leaves the Company’s
employ shall have the rate of return they selected in accordance with
Section 3.02 applied to their Deferred Compensation until the date they
terminated their employment status; the rate of return for Inactive Participants
provided under this Section 3.03 shall be applied to their Deferred Compensation
from that date until such compensation is distributed.

 

Section 3.04. Each Participant’s account shall be credited with the amount of
Deferred Compensation for such Plan Year as of the date such Deferred
Compensation would have been paid to the Participant had it not been deferred in
accordance with this Plan. All earning or losses thereon shall be prorated
accordingly.

 

Section 3.05. Until deferred benefits hereunder are distributed in accordance
with the terms of the Plan, the interest of each Participant and beneficiary
therein is contingent only and is subject to forfeiture as provided in
Section 3.07. Title to and beneficial ownership of any assets, whether cash or
investments, which the Company may set aside or earmark to meet its contingent
deferred obligation hereunder, shall at all times remain in the Company. All
Plan Participants and beneficiaries are general unsecured creditors of the
Company with respect to the benefits due hereunder and the Plan constitutes an
agreement by the Company to make benefit payments in the future. It is the
intention of the Company that the Plan be considered unfunded for tax purposes.

 

Section 3.06. In order to meet its contingent deferred obligations hereunder,
funds may be set aside or earmarked by the Company. These funds may be kept in
cash, or invested and reinvested, in the discretion of the Committee. The
Company may, but is not required to, establish a grantor trust which may be used
to hold assets of the Company which are maintained as reserves against the
Company’s unfunded, unsecured obligations hereunder. Such reserves shall at all
times be subject to the claims of the Company’s creditors. To the extent such
trust or other vehicle is established, and assets contributed, for the purpose
of fulfilling the Company’s obligation hereunder, then such obligation of the
Company shall be reduced to the extent such assets are utilized to meet its
obligations hereunder.

 

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Section 3.07. The contingent right of a Participant or beneficiary to receive
future payments hereunder shall be forfeited upon the occurrence of any one or
more of the following events:

 

(a) If the Participant is discharged from employment by the Company or a
Subsidiary for acts which constitute their willful misconduct in connection with
the performance of their duties to the Company or a Subsidiary, and such conduct
shall have been materially harmful to the Company or a Subsidiary, including,
but without limiting the generality of the foregoing, misappropriation of funds
or property of the Company or a Subsidiary, securing or attempting to secure
personally any profit in connection with any transaction entered into on behalf
of the Company or a Subsidiary, or committing the Company or a Subsidiary to any
transaction adverse to its respective interests except as a result of a good
faith error in judgment, or

 

(b) If the Participant shall enter into a business or employment which the
Committee determines to be (i) detrimentally competitive with the business of
the Company or a Subsidiary, and (ii) substantially injurious to the Company’s
financial interests.

 

ARTICLE IV - Death Benefits

 

Section 4.01. In the event that a Participant dies prior to their Benefit
Commencement Date, the Participant’s Account shall accrue annual earnings
thereafter in accordance with Section 3.03 until such time as the Account is
distributed. The beneficiary of such Participant shall receive as a death
benefit a single sum equal to the entire value of the Account in January of the
year immediately following the Participant’s death.

 

Section 4.02. In the event that a Participant dies after their Benefit
Commencement Date, the beneficiary of such Participant shall receive as a death
benefit a single sum equal to the entire value of the Account.

 

ARTICLE V - Payment of Benefits

 

Section 5.01. A Participant’s Account shall become payable to the Participant as
soon as administratively practical following the Benefit Commencement Date
specified in their deferral election. If the Participant has elected to receive
their Account in annual installments, the Participant’s Account will continue to
be credited with earnings or losses calculated in accordance with their
elections. Each annual payment shall be calculated by dividing the remaining
value of the Account (or portion thereof) by the number of remaining annual
installment payments to be made to the Participant.

 

Section 5.02. A Participant’s death benefit shall be payable to their
beneficiary as set forth in Article IV.

 

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Section 5.03. A Participant shall be paid the value of their Account (or portion
thereof) beginning at the Benefit Commencement Date in a single sum or in
periodic installment payments payable annually for ten years as irrevocably
elected by the Participant.

 

Section 5.04. If a Participant or beneficiary entitled to receive any benefits
hereunder is a minor or is determined to be legally incapable of giving valid
receipt and discharge for such benefits, benefits will be paid to such person as
the Committee may designate for the benefit of such Participant or beneficiary.
Such payments shall be considered a payment to such Participant or beneficiary
and shall, to the extent made, be deemed a complete discharge of any liability
for such payments under the Plan.

 

Section 5.05. The Committee shall make all reasonable attempts to determine the
identity and/or whereabouts of a Participant or a Participant’s beneficiary
entitled to benefits under the Plan, including the mailing by certified mail of
a notice to the last known address shown on the Company’s or the Committee’s
records. If the Committee is unable to locate such a person entitled to benefits
hereunder, or if there has been no claim made for such benefits, the Company
shall continue to hold the benefit due such person, subject to any applicable
statute of escheats.

 

Section 5.06. In the event of the Participant’s Disability prior to their
selected Benefit Commencement Date, the Participant’s Benefit Commencement Date
shall be adjusted to the January following the three month period following the
Participant’s Disability. In the event of the Participant’s Retirement prior to
their selected Benefit Commencement Date, the Participant’s Benefit Commencement
Date shall be adjusted to the January following the six month period following
the Participant’s Retirement. In either case, the Participant’s Account shall be
paid in the manner prescribed on the Participant’s election form, except with
regard to the Participant’s originally selected Benefit Commencement Date.

 

Section 5.07. For amounts deferred in 2004 or earlier, a Participant may elect
at any time to be paid the total of such amounts plus earnings thereon, in which
case the Participant shall be paid such amount, less 10% of such amount as an
early withdrawal penalty, as soon as practicable. (For the avoidance of doubt,
an amount deferred in 2004 or earlier and any earnings thereon shall always be
deemed to be “an amount deferred in 2004 or earlier” for the purposes of this
section regardless of how many times or when such amount was redeferred as long
as such amount was redeferred in accordance with the terms of the Plan in
existence on October 3, 2004.)

 

Section 5.08. For amounts deferred after 2004, a Participant may elect to be
paid all or any part of such amounts plus earnings thereon in the event:
(i) such funds are needed in connection with an “unforseeable emergency” (as
determined by the Committee in accordance with applicable law), or (ii) they
terminate their employment with the Company. In the event of a payment due to a
termination of employment, the Participant shall be paid such amount as soon as
practicable after the six month period following their termination date.

 

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ARTICLE VI - Beneficiary Designation

 

Section 6.01. A Participant may designate a beneficiary and a contingent
beneficiary as part of their deferral election. Any beneficiary designation
hereunder shall remain effective until changed or revoked.

 

Section 6.02. A beneficiary designation may be changed by the Participant at any
time, or from time to time, by filing a new designation in writing with the
Company.

 

Section 6.03. If the Participant dies without having designated a beneficiary or
if the Participant dies and the beneficiary so named by the Participant has
predeceased the Participant, then the Participant’s estate shall be deemed to be
their beneficiary.

 

ARTICLE VII - Administration

 

Section 7.01. The books and records to be maintained for the purpose of the Plan
shall be maintained by the officers and employees of the Company at its expense
and subject to the supervision and control of the Committee. The Company shall
pay all expenses of administering the Plan either from funds set aside or
earmarked under the Plan or from other funds.

 

Section 7.02. To the extent permitted by law, the right of any Participant or
any beneficiary in any benefit or to any payment hereunder shall not be subject
in any manner to attachment or other legal process for the debts of such
Participant or beneficiary; and any such benefit or payment shall not be subject
to anticipation, alienation, sale, transfer, assignment or encumbrance.

 

Section 7.03. No member of the Board or of the Committee and no officer or
employee of the Company shall be liable to any person for any action taken or
omitted in connection with the administration of this Plan unless attributable
to their own fraud or willful misconduct; nor shall the Company be liable to any
person for any such action unless attributable to fraud or willful misconduct on
the part of a director, officer or employee of the Company.

 

Section 7.04. The Committee shall be the agent for service of process on the
Plan.

 

Section 7.05. Benefit payments hereunder shall be subject to withholding, to the
extent required (as determined by the Company) by applicable tax or other laws.

 

Section 7.06. The Plan shall be binding upon and inure to the benefit of the
Company, its successors and assigns, and the Participant and their heirs,
executors, administrators and legal representatives.

 

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Section 7.07. If any provision of this Plan is held invalid or unenforceable to
the extent necessary to effectuate the purposes of this Plan, its invalidity or
unenforceability shall not affect any other provisions of the Plan and the Plan
shall be construed and enforced as if such provisions had not been included
therein.

 

ARTICLE VIII - Amendment or Termination of Plan

 

Section 8.01. The Board may terminate the Plan or amend the Plan in whole or in
part, effective as of any date specified. Notwithstanding the foregoing, in the
event of a “Change in Control” of the Company, as such term is defined in the
Company’s Equity Compensation Plan, the Plan may not be amended in any manner
whatsoever that would diminish the value of a Participant’s interest in or
ultimate benefits under the Plan or accelerate any payment to a Participant.

 

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