Exhibit 10.44



 





Exhibit 10.44




TRIAD GUARANTY INC.

EXECUTIVE STOCK OPTION AGREEMENT




     This Stock Option Agreement (the “Agreement”), dated ____________, is entered into between
Triad Guaranty Inc., a Delaware corporation (the “Company”), and ____________,
(the “Optionee”).



     WHEREAS, the Company, pursuant to its 2006 Long-Term Stock Incentive Plan (the “Plan”),
desires to grant an Option (as defined in the Plan) to the Optionee, and the Optionee desires to
accept the Option, on the terms and conditions set forth herein.



     NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, the parties
hereto agree as follows:



     1. Grant of Option. The Company hereby grants to the Optionee an option to purchase from the
Company all or part of
____________ shares of Common Stock (par value $0.01 per share) of the
Company at $______   per share (the “Option Price”), during the period and upon the terms and
conditions stated herein and in the Plan.



     2. Termination of Option. This Option shall terminate entirely on the earliest of:




     (a) ____________;




     (b) three (3) years following the termination of Optionee’s employment with the Company
and all of its subsidiaries by reason of Optionee’s retirement after age ___;




     (c) three (3) years following the termination of Optionee’s employment with the Company
and all of its subsidiaries by reason of Optionee’s death or disability; or




     (d) three (3) months following the termination of Optionee’s employment with the
Company and all of its subsidiaries for any reason other than (b) or (c) above.



     Optionee
may be released from the effects of Section 2 (b), (c) or (d) if the
Committee (as defined in the Plan) determines in its sole discretion
that such action is in  the best interests of the Company and its
stockholders.



     3. Vesting. Subject to the provisions of Section 2 hereof, this Option may be exercised at
any time as to all or any of the shares then purchasable hereunder (but not for less than 100
shares unless such purchase would entirely exhaust the option) and provided further that the
Optionee’s right to purchase Common Stock subject to this option shall vest as follows:



	 	 	 
	Date	 	Percentage
of Common
Stock
Subject to Option
	 

	On ____________
	 	___%
	On ____________
	 	___%
	On ____________
	 	100%






1









 






     The Optionee’s right to exercise this Option will immediately accrue with respect to all
of the shares of Common Stock subject thereto upon a Termination or Constructive
Termination occurring within twelve (12) months following a Change in Control of the Company. For
purposes of this Agreement, the following terms shall have the meanings set forth below:




	 	(a)	 	“Termination” shall mean termination of the Optionee’s employment other than
for “misconduct” (as defined in the Plan) by the Company (or the successor to the
Company).
	 
	 	(b)	 	“Constructive Termination” shall mean the occurrence of any of the following
without the Optionee’s consent:
	 
	 	 	 	(i) assignment to Optionee of duties that are materially inconsistent with his/her
position with the Company at the time of announcement of the Change in Control;
	 
	 	 	 	(ii) a material reduction in the non-variable compensation (i.e. the aggregate of
all components of compensation other than bonus, equity awards and such other
components which by their nature are expected to vary from year to year) of the
Optionee from his/her non-variable compensation at the time of the announcement of
the Change in Control; or
	 
	 	 	 	(iii) requirement that the Optionee relocate his/her principal business office more
than fifty (50) miles from the Optionee’s principal business office at the time of
the announcement of the Change in Control.
	 
	 	(c)	 	“Change in Control” shall mean the occurrence of any of the following events:
	 
	 	 	 	(a) any person or persons acting as a group, as that term is defined in Rule 13d-3
under the Securities Exchange Act of 1934 (other than Collateral Holdings, Ltd., an
Alabama limited partnership, and any of its affiliates) shall become the beneficial
owner of securities of the Company representing more than fifty percent (50%) of the
combined voting power of the Company’s then outstanding securities; or
	 
	 	 	 	(b) individuals who constitute the board of directors of the Company as of the date
hereof (the “Incumbent Board”) cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director subsequent to the
date hereof whose election or nomination for election was approved by a vote of at
least three-quarters of the directors comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of the Company in which such
person is named as a nominee for director, without objection to such nomination)
shall be, for purposes of this clause (ii) considered as though such person were a
member of the Incumbent Board; or
	 
	 	 	 	(c) any consolidation or merger to which the Company is a party, if following such
consolidation or merger, stockholders of the Company immediately prior to




2









 






	 	 	 	such consolidation or merger shall not beneficially own securities representing more
than fifty percent (50%) of the combined voting power of the outstanding voting
securities of the surviving or continuing corporation; or
	 
	 	 	 	(d) any sale, lease, exchange or other transfer (in one transaction or in a series
of related transactions) of all, or substantially all, of the assets of the Company,
other than to an entity (or entities) of which the Company or the stockholders of
the Company immediately prior to such transaction beneficially own securities
representing more than fifty percent (50%) of the combined voting power of the
outstanding voting securities.





     An option shall be exercised by giving notice to the Company, on a form which the Secretary of
the Company will supply upon request, specifying the number of whole shares to be purchased and
accompanied by payment of the purchase price therefore. Payment may be made by check payable to
the Company. The Committee (as defined in the Plan) may, in its discretion, permit the Optionee to
make payment in shares of Common Stock, valued at the Fair Market Value thereof (as defined in the
Plan), as partial or full payment therefor. Shares of Common Stock that may be used for the
payment may include shares which were received by the Optionee upon the exercise of one or more
options and shares which the Optionee directs the Company to withhold, for the purpose of paying
the Option Price (and any applicable withholding taxes), from shares which the Optionee would have
received upon the exercise of one or more options. Such exercise shall be effective upon receipt
by the Secretary of the Company, at the main office of the Company, of such written notice and
payment.



     4. Transferability. Except as permitted by the Plan, the Option may not be sold, transferred,
pledged, assigned or otherwise alienated at any time, and any attempt to sell, transfer, pledge,
assign or otherwise alienate the Option need not be recognized by the Company.



     5. Committee Interpretations Binding. All determinations and interpretations made by the
Committee with regard to any question arising hereunder or under the Plan shall be binding and
conclusive on Optionee and on his legal representatives and beneficiaries.



6. No Rights as Stockholder.





     (a) Optionee shall have none of the rights of a stockholder with respect to shares
subject to the Option until such shares shall be issued on exercise of the Option[; and,
except as otherwise provided in Section 6(b) hereof, no adjustment for dividends, or
otherwise, shall be made if the record date thereof is prior to the
date of issuance of such shares.



     (b) In the event that the outstanding Common Stock of the Company is changed by reason
of a Share Change or Organic Change (each as defined in the Plan), the number of shares
subject to the Option shall be adjusted so that Optionee shall receive upon exercise of the
Option in whole or in part thereafter that number of shares of the class of the capital
stock of the Company or its successor that Optionee would have been entitled to receive had
he exercised the Option immediately prior to the record date for such event. In the event
of such an adjustment, the per share Option price shall be



3









 





     adjusted accordingly, so that there will be no change in the aggregate purchase price
payable upon exercise of the Option].



     7. Controlling Documents. The Option granted hereby is subject to:




     (a) All terms and conditions of the Plan (which is hereby incorporated by reference
with the same effect as if fully recited herein) as now or hereafter in effect; and




     (b) All the terms and conditions of this Agreement as now in effect or as hereafter
modified at the discretion of the Committee to conform with the Plan as amended from time to
time.



     The Optionee acknowledges receipt of a copy of the Plan, represents and warrants that he has
read the Plan and agrees that this Agreement shall be subject to all of the terms and conditions of
the Plan.



     8. No Guarantee of Employment. This Agreement shall not interfere with or limit in any way
the right of the Company to terminate the Optionee’s employment at any time, or confer upon the
Optionee any right to continue in the employment of the Company.



     9. Governing Law. This Agreement shall be governed by the law of the State of Delaware and
construed in accordance therewith.



     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the day
and year first above written.




	 	 	 	 	 
	OPTIONEE:

	 	COMPANY:
	 
	 	 	 	 
	 

	 	TRIAD GUARANTY INC.
	 
	 	 	 	 
	 	 
	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Its:	 	 
	 

	 	 	 	 






4