##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
   Form 10-K/AAmendment
    No. 1
 (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from
    to  Commission file number 0-22342
    Triad Guaranty Inc.
 (Exact name of registrant as
    specified in its charter)
  DELAWARE(State or other jurisdiction
    of
    incorporation or organization)

56-1838519(I.R.S. Employer
    Identification No.)101 South Stratford Road,
    Winston-Salem, North Carolina(Address of principal
    executive offices)

27104(Zip Code)   Registrants telephone number, including area code:(336) 723-1282
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, Par value $0.01 per share

The NASDAQ Stock Market LLC
    (NASDAQ Global Select Market)   Securities registered pursuant to Section 12(g) of the
    Act:
    None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o (Do not check if a smaller
    reporting company)
  Rule 12b-2 o þ
  Rule 13d-3
    Portions of the following document are incorporated by

Part of this Form 10-K into which the portions of thereference into this Form 10-K:

document are incorporated by referenceNone

None




---



##### Table of Contents





EXPLANATORY
    NOTE
  Form 10-K/A Form 10-K Form 10-K). Items 10-14 Form 10-K, Form 10-K,
    Items 10-14 Form 10-K Form 10-K. Form 10-K Items 10-14




---



##### 



TABLE OF
    CONTENTS
  PagePart IIItem 5.


Market for Registrants Common Stock,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


1Item 9B.


Other Information


2Part IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


3Item 11.


Executive Compensation


5Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


22Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


24Item 14.


Principal Accounting Fees and Services


25Signatures


26Exhibit Index


27Exhibit 31.1Exhibit 31.2




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Stock, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market information
  ®
  2008


2007


2006High


Low


High


Low


High


LowFirst Quarter

$
10.19


$
4.10


$
58.62


$
39.31


$
47.25


$
41.50Second Quarter









$
47.35


$
38.45


$
57.87


$
45.50Third Quarter









$
41.05


$
14.84


$
53.43


$
45.20Fourth Quarter









$
20.63


$
5.50


$
57.66


$
48.91   Holders
    Dividends
        Issuer Purchases of Equity Securities and Unregistered Sales
    of Equity Securities
   1




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##### Table of Contents



Comparison
    of Five-Year Cumulative Annual Return
    
  As of December 31,2002



2003



2004



2005



2006



2007Triad Guaranty Inc


$
100.00



$
136.60



$
164.08



$
119.34



$
148.86



$
26.59Nasdaq Stock Market (U.S.) Index



100.00




149.52




162.72




166.18




182.57




197.98Nasdaq Financial Stocks Index



100.00




135.25




157.85




161.60




185.81




167.08Nasdaq Insurance Stocks Index



100.00




123.57




150.03




168.14




190.12




190.51     Item 9B.
    Other
    Information  New
    Employment Agreement With Mark K. Tonnesen
  Form 10-K
   2




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##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K/A,
  Glenn T. Austin, Jr.

Age  59

Director since  2003     Robert T. David

Age  69

Director since  1993     H. Lee Durham, Jr.

Age  60

Director since  2006     William T. Ratliff, III

Age  54

Director since  1993     Richard S. Swanson

Age  58

Director since  2003     Mark K. Tonnesen

Age  56

Director since  2005     David W. Whitehurst

Age  58

Director since  1993    3




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##### Table of Contents



Henry G. Williamson, Jr.

Age  60

Director since  2007     SECTION 16(a)
    BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
    CODE OF
    ETHICS
  http://www.triadguaranty.com
  AUDIT
    COMMITTEE
    Rule 10A-3(b)(1)
 4




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##### Table of Contents



Item 11.
    Executive
    Compensation  COMPENSATION
    COMMITTEE REPORT
      Form 10-K
  
  
 5




---



##### Table of Contents



COMPENSATION
    DISCUSSION AND ANALYSIS
  Overview
  ®
    Compensation
    Philosophy and Objectives
    
    attract, retain and motivate employees who contribute to our
    long-term success;
    provide pay-for-performance by rewarding individual employee
    success through the use of incentive compensation; and
    align the interests of all employees, especially executive
    officers, with those of our stockholders in the pursuit of
    creating long-term value.      Role of
    our Compensation Committee
       6




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##### Table of Contents



2007
    Executive Compensation
    Base
    Compensation  Salary
    Name and





Increase OverPrincipal Position

Year

Salary ($)

Previous Year (%)Mark K. Tonnesen,


2007



495,000



10.0President and Chief Executive OfficerKenneth W. Jones


2007



192,500



10.0Senior Vice President and Chief Financial OfficerKenneth C. Foster


2007



218,400



4.0Executive Vice President, Structured Transactions and Business
    DevelopmentRonnie D. Kessinger


2007



360,000



21.0Senior Executive Vice PresidentGregory J. McKenzie


2007



226,202



n/aPresident and Chief Executive Officer of Triad Guaranty
    Insurance Corporation Canada     Summary Compensation Table
   7




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##### Table of Contents



Incentive
    Compensation
    and/or
  2006 Long-Term Stock Incentive Plan
  Grants of Plan-Based Awards Table
  Annual Cash Award Program. Summary Compensation Table
  2007 Key Executive Incentive Compensation
    Plan. Summary Compensation Table
  Other Considerations. Executive Compensation
 8




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##### Table of Contents



Code
    Section 162(m)
    Perquisites
    and Other Benefits
  Summary
    Compensation Table
  Severance
    and Change in Control
    2008
    Executive Compensation
   9




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##### Table of Contents



10




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##### Table of Contents



EXECUTIVE
    COMPENSATION
  Summary
    Compensation Table
    Change inPension ValueandNon-Equity

NonqualifiedIncentive

DeferredStock

Option

Plan

Compensation

All OtherSalary

Bonus

Awards

Awards

Compensation

Earnings

Compensation

TotalName and Principal Position

Year

($)

($)

($)(1)

($)(1)

($)

($)

($)

($)Mark K. Tonnesen,


2007



495,000



0



642,617



1,008,731



0







26,370
(2)


2,172,718President and Chief


2006



450,000



595,125



493,974



849,393











374,086



2,762,578Executive OfficerKenneth W. Jones


2007



192,500



0



71,881



12,193















276,574Senior Vice


2006



127,324
(3)


108,550



28,487



















264,361President and Chief Financial OfficerKenneth C. Foster


2007



218,400



0



133,879



52,859



0











405,138Executive Vice


2006



210,000



219,000



105,940



















524,940President, Structured Transactions and Business DevelopmentRonnie D. Kessinger


2007



360,000







228,855



















588,855Senior Executive


2006



297,500







306,319



















603,819Vice PresidentGregory J. McKenzie(4)


2007



226,202



123,383







69,980











67,898
(5)


487,465President and Chief Executive Officer of Triad Guaranty
    Insurance Corporation Canada     (1)
    
    Reflects the dollar amount of awards recognized for financial
    statement reporting purposes for the year ended
    December 31, 2007, in accordance with FAS 123(R).
    Grants were made prior to 2007, except for the grant to
    Mr. McKenzie, which was made pursuant to the terms of his
    offer of employment. Grants in the form of shares of restricted
    stock were valued at the market price of our common stock on the
    date of grant. Grants in the form of options were ten
    (10) year stock options exercisable at the market price on
    the date of grant. We utilized a Black-Scholes pricing model (or
    in certain cases, a derivative of such a model) and applied a
    discount for non-transferability of options and deferred vesting
    to determine the number of at the market options.
    See Note 11 of the Notes to Consolidated Financial
    Statements in our Annual Report on
    Form 10-K
    for the year ended December 31, 2007.(2)
    
    This amount includes a car allowance of $12,000 ($1,000 per
    month) and reimbursement of financial planning services of
    $7,500, as well as payments for long term disability insurance,
    life insurance and country club dues totaling $6,870.(3)
    
    Amount reflects salary paid for a portion of 2006 during which
    Mr. Jones was employed (April 3, 2006 through
    December 31, 2006).(4)
    
    Amounts have been converted from Canadian Dollars to U.S.
    Dollars using the average monthly exchange rate for 2007 of
    1.073893.(5)
    
    Amount includes a signing bonus of $46,558, a car allowance of
    $6,175 and club membership dues of $5,220. Mr. McKenzie
    also received a tax
    gross-up of
    $5,389 in respect of the car allowance and a
    tax-gross up
    of $4,556 in respect of the club membership dues. 11




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##### Table of Contents





Grants of
    Plan-Based Awards
    2007-Targets and Maximum Cash Incentive Opportunities

2007-Targets and Maximum Equity Incentive Opportunities

Equity Awards Granted in 2007(1)AllOtherStock

AllAwards:

Other

Exercise orNumber

Awards:

Base

GrantCompensation

Estimated Future Payouts Under

Estimated Future Payouts Under

of Shares

Number of

Price of

Date FairCommittee

Non-Equity Incentive Plan Awards

Equity Incentive Plan Awards

of Stock

Securities

Option

Value ofGrant

Action

Threshold

Target

Maximum

Payout

Threshold

Target

Maximum

Payout

or Units

Underlying

Awards

EachName

Date

Date

($)

($)

($)

($)(2)

(#)

(#)

(#)

($)(2)

(#)

Options(#)

($/Sh)

Grant($)Mark K. Tonnesen


03/08/07



03/08/07







450,000



945,000



0







900,000



1,080,000



0



11,829











512,78703/08/07



03/08/07







































35,000



43.35



545,650Kenneth W. Jones


03/08/07



03/08/07







100,000



210,000



0







150,000



180,000



0



2,118











91,81503/08/07



03/08/07







































2,700



43.35



42,093Kenneth C. Foster


03/08/07



03/08/07







136,000



285,600



0







275,000



330,000



0



3,955











171,44903/08/07



03/08/07







































11,700



43.35



182,403Ronnie D. Kessinger(3)






















































Gregory J. McKenzie(4)


03/08/07



03/08/07







123,383



259,104



123,383







246,765



296,118



246,765







16,000
(5)


43.35



249,440     (1)
    
    Equity awards for Messrs. Tonnesen, Jones and Foster were
    in recognition of 2006 performance.(2)
    
    Messrs. Tonnesen, Jones and Foster received no payouts
    under their non-equity incentive plan awards or under their
    equity incentive plan awards due to our failure to meet the
    applicable performance goals for the awards. The cash award
    target and maximum payouts for Mr. Tonnesen and
    Mr. Foster reflect the Compensation Committees
    ability to exercise negative discretion to reduce the amounts
    earned by them based on their 2007 performance goals under the
    2007 Key Executive Incentive Compensation Plan. See
    Compensation Discussion and Analysis  2007
    Executive Compensation  Incentive
    Compensation  2007 Key Executive Incentive
    Compensation Plan.(3)
    
    Mr. Kessinger did not participate in the annual cash and
    equity awards programs in accordance with the terms of his
    employment agreement.(4)
    
    Mr. McKenzie received the above targeted cash and equity
    awards in accordance with the terms of his offer of employment.
    Award amounts have been converted from Canadian dollars to U. S.
    dollars using the average monthly exchange rate for 2007 of
    1.073893.(5)
    
    Mr. McKenzies award of options for 16,000 shares
    of common stock vests 50% at the second anniversary and 50% at
    the third anniversary of his date of employment.


12




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##### Table of Contents



Employment
    Agreements
  Mark
    K. Tonnesen
    Pre-2008 Employment Agreement and Letter
    Agreements. gross-up
      2008 Employment Agreement. Form 10-K
  
    A retention bonus of $150,000 if he is still employed with us on
    July 1, 2008, and a retention bonus of $300,000 and a
    severance bonus of $225,000 if he is still employed with us on
    December 31, 2008. These bonuses will be paid earlier if
    Mr. Tonnesen retires with our consent prior to
    December 31, 2008 or if we terminate his employment without
    cause or he terminates his employment for good
    reason. Cause and good reason are
    defined in the agreement in the same manner that such terms are
    defined in the original employment agreement. These provisions
    replace corresponding provisions of the original employment 13




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##### Table of Contents



agreement that recognized Mr. Tonnesens ability to
    participate in any bonus plan for senior executives that we
    adopt.  
    A grant of 40,500 shares of restricted stock under our 2006
    Long-Term Stock Incentive Plan. These shares will vest in a lump
    sum on the earlier of three (3) years after the date of
    grant or two (2) years after Mr. Tonnesens
    retirement. This grant was awarded to Mr. Tonnesen in
    February 2008 as part of our efforts to retain key executives
    who are key to our ability to meet the challenges that we face
    in 2008, as described above under Compensation Discussion
    and Analysis  2008 Executive Compensation.
    Participation in all of our medical and employee plans on the
    same basis as other executives, and paid time off in accordance
    with our policy from time to time as though Mr. Tonnesen
    had been employed by us for at least ten (10) years. This
    provision was included in the original agreement and is not new.
    Reimbursement of his reasonable business expenses, including
    reimbursement of up to $5,000 for his attorneys fees and
    expense in the negotiation of the new employment agreement.    
    If the agreement is terminated due to Mr. Tonnesens
    death, we will pay Mr. Tonnesens estate his salary to
    the end of the month in which he died plus a lump sum amount
    equal to his annual salary at the time of his death. This
    provision was included in the original agreement and is not new.
    If the agreement is terminated due to Mr. Tonnesens
    incapacity, we will continue his salary until coverage begins
    under any long-term disability insurance policy maintained by us
    for his benefit or two (2) months after termination,
    whichever first occurs. Incapacity is defined in the
    agreement in the same manner that it is defined in the original
    employment agreement. This provision was included in the
    original agreement and is not new.
    If the agreement is terminated by us without cause, by
    Mr. Tonnesen for good reason or due to his retirement in
    accordance with the agreement, we will pay Mr. Tonnesen
    $675,000 in eighteen (18) equal monthly installments
    beginning six (6) months after termination (such
    twenty-four (24) month period being referred to as the
    post-termination period). In addition to these
    monthly payments, Mr. Tonnesen will be entitled to receive
    any unpaid portion of the retention and severance bonuses
    described above and to participate in our health care plan for
    the benefit of himself and his dependents during the
    post-termination period. If we are unable to include
    Mr. Tonnesen in our plan for any reason, we will use our
    best efforts to obtain equivalent coverage for Mr. Tonnesen
    and his dependents under an individual policy. Mr. Tonnesen
    may elect COBRA coverage under the circumstances provided in the
    agreement. We will pay Mr. Tonnesen a monthly amount equal
    to the premium actually paid by Mr. Tonnesen for the health
    care coverage described above. These benefits replace the
    severance payment that we would have had to pay
    Mr. Tonnesen under his original employment agreement if we
    terminated his employment without cause. The amount of the
    severance payment under the original agreement would have been
    the greater of $1.8 million or two times his annual salary
    during the two calendar years prior to the year of termination.
    Upon Mr. Tonnesens retirement as contemplated by the
    agreement, in addition to the benefits described above, he will
    be entitled to participate during the post-termination period in
    life insurance, accident and disability policies and other
    welfare plans and arrangements generally available to our active
    employees and in which he participated prior to the termination
    date, subject to the terms of such plans and arrangements and
    the provisions of Section 409A of the Code. During the
    post-termination period Mr. Tonnesen will not participate
    in sick leave, vacation pay and similar programs or receive
    various perquisites specified in the agreement.
    If we terminate the agreement for cause, or if Mr. Tonnesen
    terminates the agreement otherwise than for good reason
    (including retirement at a time not permitted by the agreement),
    Mr. Tonnesen will not be entitled to any of the benefits
    described above. 14




---



##### Table of Contents



Kenneth C. Foster.
      Gregory J. McKenzie.
  Kenneth W. Jones.
 15




---



##### Table of Contents



Outstanding
    Equity Awards at Calendar Year-End
    Stock Awards (1)EquityEquity

IncentiveIncentive

PlanOption Awards





Plan

Awards:Equity









Awards:

MarketIncentive









Number

or PayoutPlan





Number

Market

of

Value ofAwards:





of

Value of

Unearned

UnearnedNumber

Number

Number





Shares

Shares

Shares,

Shares,of

of

of





or Units

or Units

Units or

Units orSecurities

Securities

Securities





of Stock

of Stock

Other

OtherUnderlying

Underlying

Underlying





That

That

Rights

RightsUnexercised

Unexercised

Unexercised

Option



Have

Have

That

ThatOptions

Options

Unearned

Exercise

Option

Not

Not

Have Not

Have Not(#)

(#)

Options

Price

Expiration

Vested

Vested

Vested

VestedName

Exercisable

Unexercisable

(#)

($)

Date

(#)

($)

(#)

(#)Mark K. Tonnesen


54,112



54,113







41.12



9/14/15



47,904


$
469,459







11,666



23,334







43.35



3/8/17















Kenneth W. Jones


900



1,800







43.35



3/8/17



3,785



37,093







Kenneth C. Foster


7,000











34.80



5/10/11



6,660



65,268







5,000











47.60



5/16/12















7,500











33.18



2/6/13















4,380











36.00



3/23/13















3,900



7,800







43.35



3/8/17















Ronnie D. Kessinger


3,775











49.08



1/20/08



7,444



72,951







Gregory J. McKenzie






16,000







43.35



3/8/17















     (1)
    
    Valued based on the closing price of our common stock on
    December 31, 2007, which was $9.80.  Option
    Exercises and Stock Vested
    Option Awards


Stock AwardsNumber of Shares





Number of SharesAcquired on


Value Realized on


Acquired on


Value Realized onName

Exercise (#)


Exercise ($)


Vesting (#)


Vesting ($)Mark K. Tonnesen










18,037



305,186
(1)Kenneth W. Jones










833



37,468Kenneth C. Foster










2,186



119,946Ronnie D. Kessinger










6,285



344,858Gregory J. McKenzie














     (1)
    
    Pursuant to Mr. Tonnesens Phantom Stock Award
    Agreement (described above), 18,037 of the shares awarded to
    Mr. Tonnesen in December 2006 vested on September 13,
    2007. However, the terms of the award preclude delivery of the
    shares until we determine compliance with the limitations set
    forth in Section 162(m) of the Code, which determination we
    have not yet been able to make. The value reflected above is
    based on the $16.92 closing price of our common stock on the
    vesting date, September 13, 2007. The value of the award at
    April 18, 2008 was $44,551 based on a closing price of
    $2.47. To date, the shares have not been issued to
    Mr. Tonnesen.  Change in
    Value of Managements Equity
  Compensation Discussion and Analysis
 16




---



##### Table of Contents



2006-2007
  Value at Grant Date


Value at March 31, 2008Restricted


Phantom


Stock


Restricted


Phantom


Stock


Total DeclineStock ($)


Stock ($)


Options ($)


Stock ($)


Stock ($)


Options ($)


in Value ($)(%)Mark K. Tonnesen


512,787



1,483,404



1,989,154



59,145



180,375



0



3,745,825(94.0
)%Kenneth W. Jones


227,990







39,015



23,090







0



243,915(91.4
)%Kenneth W. Foster


293,963







169,065



34,360







0



428,668(92.6
)%Ronnie D. Kessinger


























Gregory J. McKenzie










231,200











0



231,200(100
)%   No
    Pension Benefits or Nonqualified Deferred Compensation
   17




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##### Table of Contents



Payments
    Upon Termination or Change in Control
  Employment Agreements
  ValueRealizedValue


onRealized on


VestingVesting


ofCash


of


RestrictedPayment


Options


Stock/PhantomAssuming


Assuming


StockTriggering


Triggering


AssumingEvent


Event


Triggering EventOccurred


Occurred


Occurredon


on


onDecember 31,


December 31,


December 31,Name

2007 ($)


2007 ($)


2007 ($)


Total ($)Mark K. TonnesenVoluntary Termination (for Good Reason)


1,890,000
(1)


0



0



1,890,000Voluntary Termination (without Good Reason)(2)


0



0



0



0Termination by Company without Cause


1,890,000
(1)


0



115,924



2,005,924Termination by Company with Cause


0



0



0



0Change in Control followed by Termination or Constructive
    Termination by Company


1,890,000
(1)


0
(3)


115,924



2,005,924Death


495,000
(4)


0
(3)


115,924



610,924Retirement


0



0



0



0Disability


0



0
(3)


115,924



115,924Kenneth W. Jones(5)Voluntary Termination(2)


0
(5)


0



0



0Termination by Company without Cause


0
(5)


0



37,093



37,093Termination by Company with Cause


0
(5)


0



0



0Change in Control without Termination(9)


0
(5)


0



16,337



16,337Change in Control followed by Termination or Constructive
    Termination by Company(10)


0
(5)


0
(3)


37,093



37,093Death


0
(5)


0
(3)


37,093



37,093Retirement


0
(5)


0



0



0Disability


0
(5)


0
(3)


37,093



37,093Kenneth C. FosterVoluntary Termination(2)


0



0



0



0Termination by Company without Cause


856,800
(6)


0



65,268



922,068Termination by Company with Cause


0



0



0



0Change in Control without Termination(9)


0



0



26,509



26,509Change in Control followed by Termination or Constructive
    Termination by Company(10)


856,800
(6)


0
(3)


65,268



922,068Death


0



0



65,268



65,268 18




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##### Table of Contents



ValueRealizedValue


onRealized on


VestingVesting


ofCash


of


RestrictedPayment


Options


Stock/PhantomAssuming


Assuming


StockTriggering


Triggering


AssumingEvent


Event


Triggering EventOccurred


Occurred


Occurredon


on


onDecember 31,


December 31,


December 31,Name

2007 ($)


2007 ($)


2007 ($)


Total ($)Retirement


0



0



0



0Disability


109,200
(7)


0



65,268



174,468Ronnie D. KessingerVoluntary Termination(2)


0



0



0



0Termination by Company without Cause or by Executive for Good
    Reason


0



0



72,951



72,951Termination by Company with Cause


0



0



0



0Change in Control without Termination(9)


0



0



72,951



72,951Change in Control followed by Termination or Constructive
    Termination by Company(10)


0



0



72,951



72,951Death


0



0



72,951



72,951Retirement


0



0



0



0Disability


0



0



72,951



72,951Gregory J. McKenzieVoluntary Termination(2)


0



0



0



0Termination by Company without Cause


740,297
(8)


0



0



740,297
(8)Termination by Company with Cause


0



0



0



0Change in Control without Termination


0



0



0



0Change in Control followed by Termination or Constructive
    Termination by Company(10)


740,297
(8)


0
(3)


0



740,297
(8)Death


0



0
(3)


0



0Retirement


0



0



0



0Disability


0



0
(3)


0



0     (1)
    
    Greater of 200% of last two years salary or
    $1.8 million.(2)
    
    Excludes death, disability and retirement.(3)
    
    Unvested stock options would automatically vest; however, no
    gain is shown for accelerated stock option grants because the
    intrinsic value of such options as of December 31, 2007 was
    $0 due to the fact that the exercise price was higher than
    $9.80, which was the price of our common stock on such date.(4)
    
    Amount represents Mr. Tonnesens salary in 2007.(5)
    
    Mr. Jones was not entitled to cash severance for any type
    of termination in 2007.(6)
    
    Amount represents 200% of last two calendar years salary.(7)
    
    Maximum amount of payment due to disability.(8)
    
    Converted from Canadian dollars to U.S. dollars using the
    average monthly exchange rate for 2007 of 1.073893.(9)
    
    Values for accelerated vesting of equity-based awards include
    only equity-based awards granted under the 1993 Long Term Stock
    Incentive Plan (if any), which awards accelerate upon a change
    in control without regard to a termination in service. 19




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##### Table of Contents



(10)
    
    Values for accelerated vesting of equity-based awards include
    equity-based awards granted under (a) the 1993 Long Term
    Stock Incentive Plan (if any), which awards accelerate upon a
    change in control without regard to a termination in service;
    and (b) the 2006 Long Term Stock Incentive Plan (if any),
    which awards accelerate upon change in control followed by a
    termination (including constructive termination) by the Company
    within 12 months of the change in control.  Employment Agreements.
  
    any person or persons acting as a group, other than a person
    which as of the date of the particular agreement is the
    beneficial owner of our voting securities and its affiliates, or
    any of our employee benefit plans or the executive officer or a
    group including the executive officer, shall become the
    beneficial owner of our securities representing the greater of
    (i) at least twenty-five percent (25%) of the combined
    voting power of our then outstanding securities, or (ii) at
    least the combined voting power of our outstanding securities
    then held by Collateral Holdings, Ltd., an Alabama limited
    partnership, and any of its affiliates; or
    individuals who constitute our board of directors as of the date
    of the particular agreement (the Incumbent Board)
    cease for any reason to constitute at least a majority of the
    Board, provided that any person becoming a director subsequent
    to such date whose election or nomination for election was
    approved by a vote of at least three-quarters of the directors
    comprising the Incumbent Board or a nominating committee thereof
    (either by a specific vote or by approval of our proxy statement
    in which such person is named as a nominee for director, without
    objection to such nomination) will be considered as though such
    person were a member of the Incumbent Board; or
    any consolidation, merger or reorganization to which we are a
    party, if following such consolidation, merger or
    reorganization, our stockholders immediately prior to such
    consolidation, merger or reorganization shall not beneficially
    own securities representing at least fifty-one percent (51%) of
    the combined voting power of the outstanding voting securities
    of the surviving or continuing corporation; or
    any sale, lease, exchange or other transfer (in one transaction
    or in a series of related transactions) of all, or substantially
    all, of our assets, other than to an entity (or entities) of
    which we or our stockholders immediately prior to such
    transaction beneficially own securities representing at least
    fifty-one percent (51%) of the combined voting power of the
    outstanding voting securities.   20




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##### Table of Contents



DIRECTOR
    COMPENSATION
    Fees Earned or PaidName

in Cash ($)


Stock Awards ($)(1)


Total ($)Glenn T. Austin, Jr.


69,500



63,387



132,887Robert T. David


52,500



63,387



115,887H. Lee Durham


66,500



64,405



130,905William T. Ratliff, III


112,500



264,818



377,318Michael A. F. Roberts


52,500



63,387



115,887Richard S. Swanson


66,250



63,387



129,637David W. Whitehurst


65,415
(2)


64,437
(3)


129,852Henry G. Williamson, Jr.


28,000



40,669



68,669     (1)
    
    Reflects the dollar amount recognized for financial statement
    reporting purposes for the year ended December 31, 2007 in
    accordance with Statement of Financial Accounting Standards
    No. 123R (FAS 123R). Grants in the form of
    shares of restricted stock were valued at the market price of
    our common stock on the date of grant. See Note 11 of the
    Notes to Consolidated Financial Statements in our Annual Report
    on
    Form 10-K
    for the year ended December 31, 2007. The full grant date
    fair value of awards granted during 2007 computed in accordance
    with FAS 123(R) for Messrs. Austin, David, Durham,
    Roberts, Swanson, Whitehurst and Williamson is $65,000 and for
    Mr. Ratliff is $112,500. At December 31, 2007, the
    aggregate number of unvested shares of restricted stock for each
    director was as follows: for Messrs. Austin, David, Roberts
    and Swanson, 1,955 shares, for Mr. Durham,
    1,852 shares, for Mr. Ratliff, 6,975 shares, for
    Mr. Whitehurst, 2,616 shares and for
    Mr. Williamson, 1,474 shares. In April 2008,
    Mr. Roberts relinquished his rights to the
    1,474 shares of our restricted common stock that had been
    granted to him in May 2007 as director compensation ($40,669 of
    the $63,387 disclosed in the above table) and those shares
    remain available for issuance under our 2006 Long-Term Incentive
    Stock Plan. At December 31, 2007, the aggregate number of
    shares of common stock which could be acquired through the
    exercise of stock options was as follows: Mr. David,
    7,680 shares; Mr. Ratliff, III,
    69,735 shares; Mr. Roberts, 920 shares and
    Mr. Whitehurst, 24,010 shares.(2)
    
    Includes $9,415 paid for services as a director of Triad
    Guaranty Insurance Corporation Canada.(3)
    
    Includes $1,050 paid for services as a director of Triad
    Guaranty Insurance Corporation Canada.     21




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##### Table of Contents



COMPENSATION
    COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  SECURITIES
    AUTHORIZED FOR ISSUANCE UNDER
    EQUITY COMPENSATION PLANS
    EQUITY
    COMPENSATION PLAN INFORMATION
  (a)Number of


(b)Securities to be


Weighted


(c)Issued Upon


Average


Number of SecuritiesExercise of


Exercise Price


Remaining Available forOutstanding


of Outstanding


Future Issuance UnderOptions,


Options,


Equity Compensation PlansWarrants and


Warrants and


(Excluding SecuritiesPlan Category

Rights


Rights


Reflected in Column (a))Equity compensation plans approved by security holders(1)


109,190


$
43.81



940,598
(2)Equity compensation plans not approved by security holders(3)


536,007


$
38.74



0
(4)Total


645,197


$
39.60



940,598     (1)
    
    This information relates to our 2006 Long-Term Stock Incentive
    Plan, which was approved by our stockholders in May 2006.(2)
    
    In addition to being available for future issuance upon exercise
    of stock options, shares that remain available for future grant
    may be issued pursuant to restricted stock awards under our 2006
    Long-Term Stock Incentive Plan.(3)
    
    This information relates to our 1993 Long-Term Stock Incentive
    Plan.(4)
    
    All shares that were available for issuance under our 1993
    Long-Term Stock Incentive Plan at the time the 2006 Long-Term
    Incentive Plan was adopted were carried forward to the 2006 plan
    and became available for issuance under that plan.  PRINCIPAL
    HOLDERS OF COMMON STOCK
  ,
  Name and Address of

Amount and Nature of


Percent ofBeneficial Owner

Beneficial Ownership(1)


Common StockCollateral Holdings, Ltd.(2)(3)(4)


2,572,550



17.0
%Dimensional Fund Advisors LP(5)


820,557



5.4
%FMR LLC(6)


1,460,051



9.7
%Third Avenue Management LLC(7)


1,064,023



7.0
%  22




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##### Table of Contents



c/o Triad
  Amount and Nature of


Percent ofName of Beneficial Owner

Beneficial Ownership(1)


Common StockGlenn T. Austin, Jr.


4,336



*Robert T. David


27,356
(9)


*H. Lee Durham, Jr.


2,419



*Kenneth C. Foster


44,272
(9)


*Kenneth W. Jones


28,018
(9)


*Ronnie D. Kessinger


29,058



*Gregory J. McKenzie


38,300



*William T. Ratliff, III(8)


722,072
(9)(10)


4.8
%Michael A. F. Roberts(11)


5,396
(9)


*Richard S. Swanson


4,476



*Mark K. Tonnesen


127,615
(9)


*David W. Whitehurst


40,177
(9)


*Henry G. Williamson, Jr.


1,474



*All directors and executive officers as a group (16 persons)


1,170,447



7.8
%     *
    
    Less than one percent (1%).(1)
    
    Calculated pursuant to
    Rule 13d-3(d)
    under the Securities Exchange Act of 1934. Unless otherwise
    stated below, each such person has sole voting and investment
    power with respect to all such shares. In accordance with Rule
    13d-3(d), shares not outstanding which are subject to options,
    warrants, rights or conversion privileges exercisable within
    sixty (60) days of March 31, 2008 are deemed
    outstanding for the purpose of calculating the number and
    percentage owned by such person, but are not deemed outstanding
    for the purpose of calculating the percentage owned by each
    other person listed.(2)
    
    Collat, Inc. is the general partner of Collateral Holdings, Ltd.
    and as such may be deemed to be the beneficial owner of the
    shares of common stock owned by Collateral Holdings, Ltd.
    Mr. William T. Ratliff, Jr. is vice president and a
    director of Collat, Inc. Mr. Ratliff, Jr. beneficially owns
    29.6% of the outstanding limited partnership interests in
    Collateral Holdings, Ltd. Accordingly, Mr. Ratliff, Jr. may
    be deemed to be the beneficial owner of the shares of common
    stock owned by Collateral Holdings, Ltd. The business address of
    Mr. Ratliff, Jr., Collateral Holdings, Ltd. and Collat,
    Inc. is 1900 Crestwood Boulevard, Birmingham, Alabama
    35210-2034.
    Mr. Ratliff, Jr. is the father of Mr. William T.
    Ratliff, III.(3)
    
    2,012,500 shares of common stock owned by Collateral
    Holdings, Ltd. are pledged to secure loans with three
    (3) banks.(4)
    
    Number of shares reported on Schedule 13G jointly filed by
    Collateral Holdings, Ltd., Collat, Inc., Mr. Ratliff, Jr.
    and Mr. Ratliff, III with the Securities and Exchange
    Commission on February 13, 2008. Collateral Holdings, Ltd.
    has shared voting and dispositive power with respect to all
    2,572,550 shares.(5)
    
    Number of shares reported on Schedule 13G filed by
    Dimensional Fund Advisors LP (Dimensional) with the
    Securities and Exchange Commission on February 6, 2008.
    According to its Schedule 13G, Dimensional is an investment
    advisor registered under Section 203 of the Investment
    Advisors Act of 1940, furnishes investment advice to four
    investment companies registered under the Investment Company Act
    of 1940, and serves as investment manager to certain other
    commingled group trusts and separate accounts (these investment
    companies, trusts and accounts are collectively referred to as
    the Dimensional Funds). In its role as investment
    advisor or manager, Dimensional possesses investment and/or
    voting power over the securities of the Company that are owned
    by the Dimensional Funds, and may be deemed to be the beneficial
    owner of the common stock held by the Dimensional Funds.
    However, all of the common stock reported in 23




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##### Table of Contents



Dimensionals Schedule 13G are owned by the
    Dimensional Funds. Dimensional disclaims beneficial ownership of
    such securities. The business address of Dimensional is 1299
    Ocean Avenue, Santa Monica, California 90401.(6)
    
    Number of shares reported on Schedule 13G filed by FMR LLC
    with the Securities and Exchange Commission on February 14,
    2008. According to the Schedule 13G filed by FMR LLC,
    Fidelity Management & Research Company, a wholly-owned
    subsidiary of FMR LLC and an investment adviser registered under
    Section 203 of the Investment Advisers Act of 1940, is the
    beneficial owner of the common stock as a result of acting as
    investment adviser to various investment companies registered
    under Section 8 of the Investment Company Act of 1940 (the
    funds). One of the funds, Fidelity Low Priced Stock
    Fund, owns 1,438,451 of the 1,460,051 shares reported by
    FMR LLC on its Schedule 13G. Each of FMR LLC and
    Edward C. Johnson, III, Chairman of FMR LLC, through
    control of such funds, has sole power to dispose of the reported
    common stock. However, neither FMR LLC nor Mr. Johnson has
    the sole power to vote or direct the voting of the common stock
    owned directly by the funds. Such voting rights reside with the
    board of trustees of each fund. The business address of FMR LLC,
    Mr. Johnson, Fidelity Management & Research
    Company and the funds is 82 Devonshire Street, Boston,
    Massachusetts 02109.(7)
    
    Number of shares reported on Schedule 13G filed by Third
    Avenue Management LLC with the Securities and Exchange
    Commission on February 14, 2008. According to its
    Schedule 13G, Third Avenue Real Estate Value Fund, an
    investment company registered under the Investment Company Act
    of 1940, has the right to receive dividends from and the
    proceeds from the sale of the common stock reported by Third
    Avenue Management LLC. The business address of Third Avenue
    Management LLC is 622 Third Avenue, 32nd Floor, New York, NY
    10017.(8)
    
    Mr. Ratliff, III beneficially owns 7.7% of the
    outstanding limited partnership interests in Collateral
    Holdings, Ltd. Mr. Ratliff, III is also president and
    a director of Collat, Inc., the general partner of Collateral
    Holdings, Ltd., and beneficially owns 50.2% of the outstanding
    voting capital stock of Collat, Inc. Accordingly,
    Mr. Ratliff, III may be deemed to be the beneficial
    owner of the shares of common stock owned by Collateral
    Holdings, Ltd. The business address of
    Mr. Ratliff, III is 1900 Crestwood Boulevard,
    Birmingham, Alabama
    35210-2034.
    Mr. Ratliff, III is the son of Mr. Ratliff, Jr.
    No other director or executive officer of the Company
    beneficially owns any partnership interests in Collateral
    Holdings, Ltd.(9)
    
    Includes shares of common stock which could be acquired through
    the exercise of stock options as follows: Mr. David,
    6,880 shares; Mr. Foster, 27,780 shares;
    Mr. Jones, 900 shares; Mr. Ratliff, III,
    61,285 shares; Mr. Roberts, 920 shares;
    Mr. Tonnesen, 65,778 shares; Mr. Whitehurst,
    20,360 shares; all directors and executive officers as a
    group, 183,903 shares.(10)
    
    Includes 2,617 shares owned by
    Mr. Ratliff, IIIs wife; 12,390 shares held
    of record in trusts for his minor children; 74,555 shares
    held through RaS I, Ltd., a family limited partnership; and
    246,518 shares held by Mr. Ratliff, III as one
    (1) of five (5) trustees for the Grandchildrens
    Trust U/A, December 4, 1990.(11)
    
    In April 2008, Mr. Roberts relinquished his rights to the
    1,474 shares of our restricted common stock that had been
    granted to him in May 2007 as director compensation. Although
    those 1,474 shares are included in the number of our
    securities beneficially owned by Mr. Roberts disclosed in
    this table, which speaks as of March 31, 2008,
    Mr. Roberts beneficial ownership of our securities
    has been reduced by 1,474 shares at the date of filing of
    this Amendment No. 1 to
    Form 10-K.  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence   24




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##### Table of Contents



Item 14.
    Principal
    Accounting Fees and Services  Audit
    Fees
    Audit
    Related Services
    Tax
    Fees
    All Other
    Fees
    de minimus
 25




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##### Table of Contents



SIGNATURES  th
   By:
    /s/  Mark
    K. Tonnesen   President and Chief Executive Officer
  th
  Signature

Title/s/  William
    T. Ratliff, IIIWilliam
    T. Ratliff, III

Chairman of the Board/s/  Mark
    K. TonnesenMark
    K. Tonnesen

President, Chief Executive Officer, and Director
    (Principal Executive Officer)/s/  Kenneth
    W. JonesKenneth
    W. Jones

Senior Vice President and Chief Financial Officer
    (Principal Financial Officer)/s/  Kenneth
    S. DwyerKenneth
    S. Dwyer

Vice President and Chief Accounting Officer
    (Principal Accounting Officer)/s/  Glenn
    T. Austin, Jr.Glenn
    T. Austin, Jr.

Director/s/  Robert
    T. DavidRobert
    T. David

Director/s/  H.
    Lee Durham, Jr.H.
    Lee Durham, Jr.

Director/s/  Richard
    S. SwansonRichard
    S. Swanson

Director/s/  David
    W. WhitehurstDavid
    W. Whitehurst

Director/s/  Henry
    G. Williamson, Jr.Henry
    G. Williamson, Jr.

Director  26




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##### Table of Contents



EXHIBIT INDEX Form 10-K/A
    for Fiscal Year Ended December 31, 2007
  ExhibitNumber

Description of Document31
.1

Certification of the Chief Executive Officer pursuant to
    Rule 13a-14(a)
    or 15d-14(a) of the Securities Exchange Act of 1934, as amended,
    as adopted pursuant to Section 302 of the Sarbanes-Oxley
    Act of 200231
.2

Certification of the Chief Financial Officer pursuant to
    Rule 13a-14(a)
    or 15d-14(a) of the Securities Exchange Act of 1934, as amended,
    as adopted pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.Our SEC file number reference for documents filed with the SEC
    pursuant to the Securities Exchange Act of 1934, as amended, is
    000-22342.  27