Document:

EX-10.12

 

EXHIBIT 10.12

RAM HOLDINGS LTD.

2006 EQUITY PLAN

NOTICE OF RESTRICTED SHARE UNIT GRANT AND

RESTRICTED SHARE UNIT AWARD AGREEMENT

NOTICE OF RESTRICTED SHARE UNIT GRANT

     RAM Holdings Ltd., a Bermuda exempted company (“RAM”), grants to the Grantee named below
restricted share units (the “RSUs”), in accordance with the terms of the RAM Holdings Ltd. 2006
Equity Plan (the “Plan”) and this restricted share unit award agreement (the “Award Agreement”) on
the terms set forth below:

	 	 	 
	GRANTEE
	 	 
	 
	 	 
	TOTAL RESTRICTED SHARE UNITS GRANTED
	 	 
	 
	 	 
	DATE OF GRANT
	 	 
	 
	 	 
	VESTING

	 	The RSUs will vest in four equal
installments on each of the first
four anniversaries of the Date of
Grant.

 

 

RESTRICTED SHARE UNIT AWARD AGREEMENT

1. Incorporation of Plan Terms.

     This Award Agreement and the RSUs granted hereby are subject to the Plan, the terms of which
are incorporated herein by reference. If there is any conflict or inconsistency between the Plan
and this Award Agreement, the Plan shall govern. Capitalized terms used in this Award Agreement
without definition shall have the meanings assigned to them in the Plan, a copy of which has been
furnished to the Grantee.

2. Grant of Restricted Share Units.

     Subject to the conditions contained herein and in the Plan, RAM grants to the Grantee, as of
the Date of Grant, the number of RSUs specified above in the Notice of Restricted Share Unit Grant.

3. Terms and Conditions of the RSUs.

     The RSUs shall have the following terms and conditions:

     (a) General. Each RSU shall represent the unsecured promise of RAM to transfer to the
Grantee, on the settlement date of such RSU and subject to the terms and conditions set
forth in this Award Agreement, one Common Share.

     (b) Vesting.

     (i) Normal Vesting. The RSUs will ordinarily vest in accordance with the
vesting schedule set forth above in the Notice of Restricted Share Unit Grant.

     (ii) Accelerated Vesting. Notwithstanding Section 3(b)(i), any RSUs that have
not previously vested shall vest in full upon the termination of the Grantee’s
employment with RAM and its Subsidiaries (A) by reason of death, Permanent
Disability, or Retirement and in each case after at least three years of continuous
service with RAM and its Subsidiaries (including service within a corporation or
other entity acquired by RAM), (B) for Good Reason or without
Cause, provided that
such termination is within one year following a Change in Control, or (C) without
Cause, provided that such termination is prior to and in anticipation of a Change in
Control at the request of a third party who has indicated an intention to consummate
a Change in Control and such Change in Control occurs and provided
further that such third party does not thereafter re-employ the Grantee in a
similar position and title and with similar responsibilities and at least the same
compensation (as provided in the Grantee’s Employment Agreement if applicable).
“Permanent Disability” shall mean circumstances that entitled the Grantee to receive
benefits under the long-term disability policy maintained by RAM or any of its
Subsidiaries for the Grantee. “Retirement” shall mean the termination of the
Grantee’s employment on or after age 55 with at least ten years of service with RAM,
except for Cause.

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     (iii) Partial Accelerated Vesting. Notwithstanding Sections 3(b)(i) or
3(b)(ii), if the Grantee’s employment with RAM and its Subsidiaries is terminated
for Good Reason due solely to the Grantee’s inability to maintain a valid work
permit from the applicable Bermuda governmental authorities after the Grantee has
used his or her best efforts to maintain such permit, the Grantee shall receive
credit of one additional year towards his or her vested percentage in the RSUs.

     (iv) Forfeiture. Unless the Committee in its sole discretion determines
otherwise, any RSUs that have not vested in accordance with this Section 3(b) shall
be forfeited by the Grantee upon the Grantee’s termination of employment with RAM
and its Subsidiaries. Notwithstanding anything herein to the contrary, if the
Grantee’s employment with RAM and its Subsidiaries is terminated for Cause, any RSUs
that have vested but have not been settled as of the date of such termination of
employment shall be forfeited by the Grantee.

     (v) Cause. Each of the following shall constitute “Cause” for termination of
employment:

	 	(A)	 	the Grantee’s commission of any felony;
	 
	 	(B)	 	the Grantee’s gross negligence, willful
malfeasance or gross misconduct in connection with his employment;
	 
	 	(C)	 	a substantial and continual refusal by the
Grantee, in breach of his or her Employment Agreement if applicable, to
perform the duties, responsibilities or obligations assigned to the
Grantee pursuant to his or her Employment Agreement, if applicable, or
otherwise assigned to the Grantee’s position and title; 
	 
	 	(D)	 	the Grantee’s failure to fully cooperate with a
regulatory investigation involving RAM or any of its Subsidiaries or
affiliates; or
	 
	 	(E)	 	any one or more acts by the Grantee of
dishonesty, theft, larceny, embezzlement or fraud from or with respect
to RAM or any of its Subsidiaries or affiliates.
	 
	 	 	 	By way of example, termination from employment necessitated by the
Grantee’s inability to maintain a valid work permit from the
applicable Bermuda governmental authorities after the Grantee has
used his or her best efforts to maintain such permit or in connection
with a Change in Control does not constitute termination for Cause.
Notwithstanding the foregoing, a termination shall not be treated as
a termination for Cause unless RAM shall have delivered a written
notice to the Grantee within 30 days of the actual knowledge of the
Chief Executive Officer of RAM, or, if the Grantee is the Chief
Executive Officer of RAM, a majority of the members of the Board, of
the occurrence of one or

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	 	 	 	more of such events that may give rise to a termination of employment
for Cause and, for an event described in Section 3(b)(v)(C), if
capable of being cured, shall not have been cured by the Grantee
within 30 days of the receipt of such notice and, for an event
described in Section 3(b)(v)(D), shall not have been cured by the
Grantee immediately after receipt of such notice. If RAM has
provided the notice described in the preceding sentence to the
Grantee on at least two separate occasions which involved
substantially similar behavior, RAM may immediately terminate the
Grantee for Cause upon the occurrence of a third similar event
without regard to the notice and cure period described in the
preceding sentence.

     (vi) Good Reason. A termination of the Grantee’s employment for Good Reason
shall mean a termination of the Grantee’s employment by the Grantee for one or more
of the following reasons: (A) a reduction in the Grantee’s Base Salary, Cost of
Living Allowance or target bonus opportunity (as described in the Grantee’s
Employment Agreement if applicable), (B) RAM’s removal of the Grantee from his or
her position with RAM, (C) a material breach of the Grantee’s Employment Agreement,
if applicable, by RAM, (D) a material diminution in the Grantee’s duties or the
assignment to the Grantee of duties that are not materially consistent with those
customarily assigned to an employee in the position of a [title or position] of a
company of the size and nature of RAM or which do, or would be reasonably expected
to, materially impair his ability to function as the [title or position] of RAM, (E)
a relocation of the corporate headquarters away from Bermuda, (F) the refusal of a
purchaser of all or substantially all of the assets of RAM to continue the Grantee’s
employment with substantially the same position, title and responsibilities and at
least the same compensation and, if applicable, as provided for under the Grantee’s
Employment Agreement, or (G) the Grantee’s inability to maintain a valid work permit
from the applicable Bermuda governmental authorities after the Grantee has used his
or her best efforts to maintain such permit. Notwithstanding the foregoing, a
termination shall not be treated as a termination for Good Reason (1) if the Grantee
shall have consented in writing to the occurrence of the event giving rise to the
claim of termination for Good Reason, or (2) unless the Grantee shall have delivered
a written notice to the Board within 90 days of his having actual knowledge of the
occurrence of one or more of such events stating that he intends to terminate his
employment for Good Reason and specifying the factual basis for such termination,
and such event, if capable of being cured, shall not have been cured by RAM within
30 days of the receipt of such notice.

     (vii) Change in Control. For purposes hereof, a “Change in Control” shall be
deemed to occur on the date on which one of the following events occurs:

	 	(A)	 	The acquisition by any person, entity or
“group” (as defined in Section 13(d) of the Securities Exchange Act of
1934, as amended), other than by The PMI Group, Inc., of 50% or more of

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	 	 	 	the combined voting power of the then outstanding voting securities
of RAM;

	 	(B)	 	the merger, amalgamation, reorganization, or
consolidation of, or share exchange involving RAM, as a result of which
the shareholders of RAM immediately before such transaction do not,
immediately thereafter, own, directly or indirectly, more than 50% of
the combined voting power entitled to vote generally in the election of
directors of the merged or consolidated company;
	 
	 	(C)	 	a sale of all or substantially all of RAM’s
assets; and
	 
	 	(D)	 	approval by RAM of the liquidation or
dissolution of RAM.

Notwithstanding the foregoing, if RAM or any of its Subsidiaries or affiliates has entered,
or enters, into any employment, management retention, change in control, severance or
similar agreement with the Grantee, which agreement sets forth any of the foregoing
definitions, then such definition, rather than the definition set forth above, shall control
for purposes of this Award Agreement.

     (c) Dividends and Distribution on Common Shares. In the event that, following the Date
of Grant and prior to the settlement of any RSU, RAM pays any cash or other dividend or
makes any other distribution in respect of the Common Shares, each RSU shall be credited
with an additional number of RSUs (including fractions thereof) determined by dividing (i)
the amount or cash, or the value (as determined by the Committee) of any other property,
paid or distributed in respect of one outstanding Common Share by (ii) the average of the
high and low selling price of the Common Shares on the New York Stock Exchange or NASDAQ for
the date of such payment or distribution. Any RSUs so credited shall be subject to the same
vesting provisions as the RSU in respect of which they are credited. Except as otherwise
expressly provided in this Award Agreement, the Grantee shall have no right as a shareholder
with respect to any RSUs until a certificate or certificates evidencing such shares shall
have been issued to the Grantee according to the terms of Section 3(d) below.

     (d) Settlement of RSUs and Delivery of Share Certificates.

     (i) Ordinary Settlement. Subject to Section 3(d)(ii), settlement of any RSUs
shall occur as soon as practicable following the date on which such RSUs vest except
that if the Committee elects to accelerate vesting pursuant to Section 3(b)(ii),
such RSUs shall be settled after the normal vesting date as set forth in the Notice
of Restricted Share Unit Grant. RSUs will be settled, at the election of the
Grantee, either by:

	 	(A)	 	Delivery of a share certificate or certificates
representing the number of Common Shares equal to the number of RSUs
being settled (any fractional RSU being rounded up to the next whole

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	 	 	 	RSU). Certificates shall be issued in the name of the Grantee (or of
the person or persons to whom such RSUs were transferred by will or
the laws of descent and distribution or pursuant to a qualified
domestic relations order); or

	 	(B)	 	The transfer of the corresponding number of
Common Shares equal to the number of RSUs being settled (or any
fractional RSU being rounded up to the next whole RSU) to the brokerage
account designated by the Grantee to RAM in writing prior to
settlement.

Notwithstanding the foregoing, RSUs that are attributable to dividends or other
distributions, as provided in Section 3(c) above, will be distributed as described
in paragraphs (A) or (B) of this Section 3(d) or in cash, at the Committee’s sole
discretion.

     (ii) Certain Transfer Restrictions for “Covered Employees.” Subject to the
other terms and conditions of this Award Agreement and the terms of the Plan, RAM
shall settle RSUs on or as soon as practicable following the vesting date but in no
event later than March 15 of the year following the year in which the vesting date
occurred; provided, however, that if the settlement date as defined in this sentence
would occur at a time when the Grantee is considered by RAM to be one of its
“covered employees” within the meaning of Code Section 162(m), then the settlement
date shall automatically be deferred until the first business day after the Grantee
has ceased to be such a covered employee. The provisions of this Section 3(d)(ii)
shall not apply to the extent that the Committee determines in its sole discretion
that the operation of this provision would cause this Award of RSUs to cease to
comply with Code Section 409A.

     (iii) Payment Restrictions for Specified Employees. If the Grantee is a
“Specified Employee” within the meaning of Code Section 409A(a)(2)(B), then,
anything in this Award Agreement to the contrary notwithstanding, no settlement of
RSUs in connection with the Grantee’s termination of employment (other than by
reason of death) shall be made earlier than the date which is six months and one day
following the date of such termination of employment or, if earlier, the date of the
Grantee’s death following termination of employment.

     (iv) Transfer Restrictions on Common Shares. Common Shares issued upon the
settlement of RSUs will not be subject to restrictions on transfer (except for any
restrictions imposed by the federal securities laws or other applicable laws or
regulations and for any restrictions under RAM’s trading policies applicable to
employees).

     (e) Transfer Restrictions on RSUs. RSUs may not be transferred, except by will or the
laws of descent and distribution or pursuant to a qualified domestic relations order.

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     (f) Immediate Cancellation of RSUs and Return of Share Value. Notwithstanding any
other provision of this Award Agreement, the Committee may (i) cancel all or any portion of
the RSUs then outstanding (whether or not then vested and whether or not subject to a
deferred settlement election) and (ii) may require the Grantee to repay to RAM all or any
portion of the Share Value (as hereinafter defined) that the Grantee realizes from the
settlement of RSUs occurring within six months before or one year after the Grantee’s
termination of employment (other than a termination of the Grantee’s employment due to the
expiration of the term of the Grantee’s Employment Agreement, if applicable) with RAM and
its Subsidiaries, if the Grantee engages in Competitive Activity (as defined herein) within
one year following such termination of employment. The Grantee will be considered to engage
in “Competitive Activity” if the Grantee (i) enters into a relationship as an employee,
officer, partner, member, director, independent contractor, consultant, advisor, or agent
of, or in any similar relationship with, any corporation, partnership, limited liability
company, joint venture or other business entity that engages in a financial guaranty
reinsurance business, whether existing or to be formed, without regard to its claims-paying
ability (a “Competitor”), where the Grantee will be responsible for providing services which
are similar or substantially related to the services that the Grantee provided during any of
the last three years of the Grantee’s employment with RAM and its Subsidiaries, or (ii)
either alone, or in concert with others, acquires or maintains beneficial ownership (within
the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended) of 5% or
more of any class of equity securities of a Competitor. For purposes hereof, “Share Value”
in respect of a RSU means a cash amount equal to the amount of income that would be
reportable in respect of the settlement of such RSU on the Grantee’s Form W-2 (or successor
form) if RAM issued such a form to the Grantee, as determined by the Committee in its sole
discretion for the year in which such settlement occurs. If the Grantee is required to
repay any Share Value to RAM pursuant to this Section 3(f), the Grantee shall pay such
amount in such manner and on such terms and conditions as RAM may require, and RAM shall be
entitled to withhold or set-off against any other amount owed to the Grantee by RAM or its
Subsidiaries (other than any amount owed to the Grantee under any retirement plan intended
to be qualified under Code Section 401(a)) up to an amount sufficient to satisfy the unpaid
obligation of the Grantee under this Section 3(f).

4. Tax Withholding.

     (a) Prior to either the transfer of Common Shares to the Grantee’s brokerage account or
the delivery of any certificates evidencing Common Shares to be issued in connection with
the full or partial settlement of the RSUs, RAM shall have the right to require the Grantee
to remit to RAM an amount sufficient to satisfy the minimum Federal, State and local tax
withholding requirements. To the extent permitted by applicable law, RAM may permit the
Grantee to satisfy, in whole or in part, such obligation to remit the minimum statutory
withholding amount of taxes by directing RAM to withhold Common Shares that would otherwise
be received by the Grantee, pursuant to such rules as the Committee may establish from time
to time. Under no circumstances will RAM permit the Grantee to withhold Common Shares in
excess of the maximum Federal, state and local withholding requirements.

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	5.	 	No Restriction on Right to Effect Corporate Changes; No Right to Continued Employment.

     (a) Neither the Plan, this Award Agreement, the grant of the RSUs nor any action taken
hereunder shall affect in any way the right or power of RAM or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other changes in
RAM’s capital structure or its business, or any merger or consolidation of RAM, or any issue
of bonds, debentures, preferred or prior preference shares ahead of or convertible into, or
otherwise affecting the Common Shares or the rights thereof, or the dissolution or
liquidation of RAM, or any sale or transfer of all or any part of its assets or business, or
any other corporate act or proceeding, whether of a similar character or otherwise.

     (b) This Award Agreement is not an employment agreement. Nothing in this Award
Agreement or the Plan, or the granting to the Grantee of the RSUs, shall alter the
Grantee’s status as an “at-will” employee of RAM, unless otherwise provided in the Grantee’s
employment, management retention, change in control, severance or similar agreement between
the Grantee and RAM or any of its Subsidiaries or affiliates, or be construed as
guaranteeing employment by, or as giving the Grantee any right to continue in the employ of,
RAM or any of its Subsidiaries during any period (including without limitation the period
between the Date of Grant and the settlement date of any RSUs, or any portion thereof), or
as limiting or restricting the right of RAM to terminate the Grantee’s employment at any
time, for any reason, with or without Cause.

6. Adjustment of and Changes in Shares.

     In the event of any merger, amalgamation, consolidation, recapitalization, reclassification,
share dividend, bonus issue, special cash dividend, or other change in corporate structure
affecting the Common Shares, the Committee shall, as necessary, make such equitable adjustments, if
any, as it reasonably deems appropriate in the number and class of shares subject to the RSUs. Any
adjustments shall be reasonably determined by the Committee in its sole discretion with a view to
preserving the benefits or potential benefits intended to be made available to the Grantee.

7. Preemption of Applicable Laws and Regulations.

     Anything herein to the contrary notwithstanding, if, at any time specified herein for the
issuance of Common Shares to the Grantee, any law, regulation or requirement of any governmental
authority having jurisdiction requires either RAM or the Grantee to take any action in connection
with the shares then to be issued, the issuance of such shares shall be deferred until such action
shall have been taken.

8. Committee Decisions Final.

     Any dispute or disagreement which shall rise under, or as a result of, or pursuant to, or in
connection with, this Award Agreement shall be determined by the Committee, and any such
determination or any other determination by the Committee under or pursuant to this Award

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Agreement and any interpretation by the Committee of the terms hereof shall be final and
binding on all persons affected thereby.

9. Amendments.

     The Committee shall have the power to alter or amend the terms of the RSUs as set forth
herein, from time to time, in any manner consistent with the Plan; provided, however, that no such
alteration, suspension or amendment may be binding on the Grantee to the extent that is
inconsistent with the terms of any employment, management retention, change in control, severance
or similar agreement between the Grantee and RAM or any of its Subsidiaries or affiliates and
adversely affects the rights of such Grantee under the RSUs without the written consent of the
Grantee, and provided further, that no amendment will be made that is inconsistent with Code
Section 409A. Any alteration or amendment of the terms of the RSUs by the Committee shall, upon
adoption, with written consent to the extent required consistent herewith, become and be binding on
all persons affected thereby without requirement for consent or other action with respect thereto
by any such person. The Committee shall give written notice to the Grantee of any such alteration
or amendment as promptly as practicable after it is adopted. The foregoing shall not restrict the
ability of the Grantee and RAM by mutual consent to alter or amend the terms of the RSUs in any
manner which is consistent with the Plan and approved by the Committee. In addition, the terms of
the RSU may be amended or supplemented by any employment, management retention, severance or
similar agreement entered into between RAM and the Grantee (including any such agreement entered
into prior to the Date of Grant) and approved, to the extent such agreement amends or supplements
the terms of the RSU, by the Committee. Notwithstanding anything in the Plan to the contrary, the
Committee may amend this Award Agreement, without the consent of any Grantee, to the extent it
deems necessary or desirable to comply with Code Section 409A.

10. Notice Requirements.

     Any notice which either party hereto may be required or permitted to give to the other shall
be in writing. Such notice may be delivered to RAM personally or by mail, postage prepaid and
shall be addressed to RAM in care of its Secretary at the principal executive office of RAM and to
the Grantee at the address appearing in the personnel records of RAM for the Grantee or to either
party at such other address as either party hereto may hereafter designate in writing to the other.
Any such notice shall be deemed effective upon receipt thereof by the addressee.

11. Governing Law.

     The terms and conditions stated herein are to be governed by, and construed in accordance
with, the laws of New York.

12. Entire Agreement; Headings.

     This Award Agreement and the other related documents expressly referred to herein set forth
the entire agreement and understanding between the parties hereto and supersede all prior
agreements and understandings relating to the subject matter hereof, with the exception of any
contrary provisions set forth in any employment, management retention, change in control, severance
or similar agreement between the Grantee and RAM or any of its Subsidiaries or

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affiliates. The headings of Sections and subsections herein are included solely for
convenience of reference and shall not affect the meaning of any of the provisions of this Award
Agreement.

     RAM HOLDINGS LTD.

	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

     GRANTEE:

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Print Name:  	 	 

10EX-10.13

 

EXHIBIT 10.13

RAM HOLDINGS LTD.

2006 EQUITY PLAN

NOTICE OF RESTRICTED SHARE UNIT GRANT AND

RESTRICTED SHARE UNIT AWARD AGREEMENT

[Annual Bonus Award]

NOTICE OF RESTRICTED SHARE UNIT GRANT

     RAM Holdings Ltd., a Bermuda exempted company (“RAM”), grants to the Grantee named below
restricted share units (the “RSUs”), in accordance with the terms of the RAM Holdings Ltd. 2006
Equity Plan (the “Plan”) and this restricted share unit award agreement (the “Award Agreement”) on
the terms set forth below:

	 	 	 
	GRANTEE
	 	 
	 
	 	 
	TOTAL RESTRICTED SHARE UNITS GRANTED
	 	 
	 
	 	 
	DATE OF GRANT
	 	 
	 
	 	 
	VESTING

	 	The RSUs will vest in four equal
installments on each of the first
four anniversaries of the Date of
Grant.

 

 

RESTRICTED SHARE UNIT AWARD AGREEMENT

1. Incorporation of Plan Terms.

     This Award Agreement and the RSUs granted hereby are subject to the Plan, the terms of which
are incorporated herein by reference. If there is any conflict or inconsistency between the Plan
and this Award Agreement, the Plan shall govern. Capitalized terms used in this Award Agreement
without definition shall have the meanings assigned to them in the Plan, a copy of which has been
furnished to the Grantee.

2. Grant of Restricted Share Units.

     Subject to the conditions contained herein and in the Plan, RAM grants to the Grantee, as of
the Date of Grant, the number of RSUs specified above in the Notice of Restricted Share Unit Grant.

3. Terms and Conditions of the RSUs.

     The RSUs shall have the following terms and conditions:

     (a) General. Each RSU shall represent the unsecured promise of RAM to transfer to the
Grantee, on the settlement date of such RSU and subject to the terms and conditions set
forth in this Award Agreement, one Common Share.

     (b) Vesting.

     (i) Normal Vesting. The RSUs will ordinarily vest in accordance with the
vesting schedule set forth above in the Notice of Restricted Share Unit Grant.

     (ii) Accelerated Vesting. Notwithstanding Section 3(b)(i), any RSUs that have
not previously vested shall vest in full upon the termination of the Grantee’s
employment with RAM and its Subsidiaries (A) by reason of death, Permanent
Disability, or Retirement and in each case after at least three years of continuous
service with RAM and its Subsidiaries (including service within a corporation or
other entity acquired by RAM), (B) for Good Reason or without Cause, or (C) by
reason of the expiration of Grantee’s employment agreement without an offer by the
Company to extend it on substantially similar terms. “Permanent Disability” shall
mean circumstances that entitled the Grantee to receive benefits under the long-term
disability policy maintained by RAM or any of its Subsidiaries for the Grantee.
“Retirement” shall mean the termination of the Grantee’s employment on or after age
55 with at least ten years of service with RAM, except for Cause.

     (iii) Forfeiture. Unless the Committee in its sole discretion determines
otherwise, any RSUs that have not vested in accordance with this Section 3(b) shall
be forfeited by the Grantee upon the Grantee’s termination of employment with RAM
and its Subsidiaries. Notwithstanding anything herein to the contrary, if the
Grantee’s employment with RAM and its Subsidiaries is terminated for

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Cause, any RSUs that have vested but have not been settled as of the date of
such termination of employment shall be forfeited by the Grantee.

     (iv) Cause. Each of the following shall constitute “Cause” for termination of
employment:

	 	(A)	 	the Grantee’s commission of any felony;
	 
	 	(B)	 	the Grantee’s gross negligence, willful
malfeasance or gross misconduct in connection with his employment;
	 
	 	(C)	 	a substantial and continual refusal by the
Grantee in breach of his or her Employment Agreement to perform the
duties, responsibilities or obligations assigned to the Grantee
pursuant to the terms thereof;
	 
	 	(D)	 	the Grantee’s failure to fully cooperate with a
regulatory investigation involving RAM or any of its Subsidiaries or
affiliates; or
	 
	 	(E)	 	any one or more acts by the Grantee of
dishonesty, theft, larceny, embezzlement or fraud from or with respect
to RAM or any of its Subsidiaries or affiliates.
	 
	 	 	 	By way of example, termination from employment necessitated by the
Grantee’s inability to maintain a valid work permit from the
applicable Bermuda governmental authorities after the Grantee has
used his or her best efforts to maintain such permit or in connection
with a Change in Control does not constitute termination for Cause.
Notwithstanding the foregoing, a termination shall not be treated as
a termination for Cause unless RAM shall have delivered a written
notice to the Grantee within 30 days of the actual knowledge of the
Chief Executive Officer of RAM, or, if the Grantee is the Chief
Executive Officer of RAM, a majority of the members of the Board, of
the occurrence of one or more of such events that may give rise to a
termination of employment for Cause and, for an event described in
Section 3(b)(iv)(C), if capable of being cured, shall not have been
cured by the Grantee within 30 days of the receipt of such notice
and, for an event described in Section 3(b)(iv)(D), shall not have
been cured by the Grantee immediately after receipt of such notice.
If RAM has provided the notice described in the preceding sentence to
the Grantee on at least two separate occasions which involved
substantially similar behavior, RAM may immediately terminate the
Grantee for Cause upon the occurrence of a third similar event
without regard to the notice and cure period described in the
preceding sentence.

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     (v) Good Reason. A termination of the Grantee’s employment for Good Reason
shall mean a termination of the Grantee’s employment by the Grantee for one or more
of the following reasons: (A) a reduction in the Grantee’s Base Salary, Cost of
Living Allowance or the target bonus opportunity described in the Grantee’s
Employment Agreement, (B) RAM’s removal of the Grantee from his/her position with
RAM, (C) a material breach of the Grantee’s Employment Agreement by RAM, (D) a
material diminution in the Grantee’s duties or the assignment to the Grantee of
duties that are not materially consistent with those customarily assigned to the
[title of officer] of a company of the size and nature of RAM or which do, or would
be reasonably expected to, materially impair his ability to function as the [title
of officer] of RAM, (E) a relocation of the corporate headquarters away from
Bermuda, (F) the refusal of a purchaser of all or substantially all of the assets of
RAM to continue the Grantee’s employment with substantially the same position, title
and responsibilities and at least the same compensation as provided for under the
Grantee’s Employment Agreement, or (G) the Grantee’s inability to maintain a valid
work permit from the applicable Bermuda governmental authorities after the Grantee
has used his or her best efforts to maintain such permit. Notwithstanding the
foregoing, a termination shall not be treated as a termination for Good Reason (1)
if the Grantee shall have consented in writing to the occurrence of the event giving
rise to the claim of termination for Good Reason, or (2) unless the Grantee shall
have delivered a written notice to the Board within 90 days of his having actual
knowledge of the occurrence of one or more of such events stating that he intends to
terminate his employment for Good Reason and specifying the factual basis for such
termination, and such event, if capable of being cured, shall not have been cured by
RAM within 30 days of the receipt of such notice.

     (vi) Change in Control. For purposes hereof, a “Change in Control” shall be
deemed to occur on the date on which one of the following events occurs:

	 	(A)	 	The acquisition by any person, entity or
“group” (as defined in Section 13(d) of the Securities Exchange Act of
1934, as amended), other than by The PMI Group, Inc., of 50% or more of
the combined voting power of the then outstanding voting securities of
RAM;
	 
	 	(B)	 	the merger, amalgamation, reorganization, or
consolidation of, or share exchange involving RAM, as a result of which
the shareholders of RAM immediately before such transaction do not,
immediately thereafter, own, directly or indirectly, more than 50% of
the combined voting power entitled to vote generally in the election of
directors of the merged or consolidated company;
	 
	 	(C)	 	a sale of all or substantially all of RAM’s
assets; and
	 
	 	(D)	 	approval by RAM of the liquidation or
dissolution of RAM.

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Notwithstanding the foregoing, if RAM or any of its Subsidiaries or affiliates has entered,
or enters, into any employment, management retention, change in control, severance or
similar agreement with the Grantee, which agreement sets forth any of the foregoing
definitions, then such definition, rather than the definition set forth above, shall control
for purposes of this Award Agreement.

     (c) Dividends and Distribution on Common Shares. In the event that, following the Date
of Grant and prior to the settlement of any RSU, RAM pays any cash or other dividend or
makes any other distribution in respect of the Common Shares, each RSU shall be credited
with an additional number of RSUs (including fractions thereof) determined by dividing (i)
the amount or cash, or the value (as determined by the Committee) of any other property,
paid or distributed in respect of one outstanding Common Share by (ii) the average of the
high and low selling price of the Common Shares on the New York Stock Exchange or NASDAQ for
the date of such payment or distribution. Any RSUs so credited shall be subject to the same
vesting provisions as the RSU in respect of which they are credited. Except as otherwise
expressly provided in this Award Agreement, the Grantee shall have no right as a shareholder
with respect to any RSUs until a certificate or certificates evidencing such shares shall
have been issued to the Grantee according to the terms of Section 3(d) below.

     (d) Settlement of RSUs and Delivery of Share Certificates.

     (i) Ordinary Settlement. Subject to Section 3(d)(ii), settlement of any RSUs
shall occur as soon as practicable following the date on which such RSUs vest except
that if the Committee elects to accelerate vesting pursuant to Section 3(b)(ii),
such RSUs shall be settled after the normal vesting date as set forth in the Notice
of Restricted Share Unit Grant. RSUs will be settled, at the election of the
Grantee, either by:

	 	(A)	 	Delivery of a share certificate or certificates
representing the number of Common Shares equal to the number of RSUs
being settled (any fractional RSU being rounded up to the next whole
RSU). Certificates shall be issued in the name of the Grantee (or of
the person or persons to whom such RSUs were transferred by will or the
laws of descent and distribution or pursuant to a qualified domestic
relations order); or
	 
	 	(B)	 	The transfer of the corresponding number of
Common Shares equal to the number of RSUs being settled (or any
fractional RSU being rounded up to the next whole RSU) to the brokerage
account designated by the Grantee to RAM in writing prior to
settlement.

Notwithstanding the foregoing, RSUs that are attributable to dividends or other
distributions, as provided in Section 3(c) above, will be distributed as described
in paragraphs (A) or (B) of this Section 3(d) or in cash, at the Committee’s sole
discretion.

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     (ii) Certain Transfer Restrictions for “Covered Employees.” Subject to the
other terms and conditions of this Award Agreement and the terms of the Plan, RAM
shall settle RSUs on or as soon as practicable following the vesting date but in no
event later than March 15 of the year following the year in which the vesting date
occurred; provided, however, that if the settlement date as defined in this sentence
would occur at a time when the Grantee is considered by RAM to be one of its
“covered employees” within the meaning of Code Section 162(m), then the settlement
date shall automatically be deferred until the first business day after the Grantee
has ceased to be such a covered employee. The provisions of this Section 3(d)(ii)
shall not apply to the extent that the Committee determines in its sole discretion
that the operation of this provision would cause this Award of RSUs to cease to
comply with Code Section 409A.

     (iii) Payment Restrictions for Specified Employees. If the Grantee is a
“Specified Employee” within the meaning of Code Section 409A(a)(2)(B), then,
anything in this Award Agreement to the contrary notwithstanding, no settlement of
RSUs in connection with the Grantee’s termination of employment (other than by
reason of death) shall be made earlier than the date which is six months and one day
following the date of such termination of employment or, if earlier, the date of the
Grantee’s death following termination of employment.

     (iv) Transfer Restrictions on Common Shares. Common Shares issued upon the
settlement of RSUs will not be subject to restrictions on transfer (except for any
restrictions imposed by the federal securities laws or other applicable laws or
regulations and for any restrictions under RAM’s trading policies applicable to
employees).

     (e) Transfer Restrictions on RSUs. RSUs may not be transferred, except by will or the
laws of descent and distribution or pursuant to a qualified domestic relations order.

     (f) Immediate Cancellation of RSUs and Return of Share Value. Notwithstanding any
other provision of this Award Agreement, the Committee may (i) cancel all or any portion of
the RSUs then outstanding (whether or not then vested and whether or not subject to a
deferred settlement election) and (ii) may require the Grantee to repay to RAM all or any
portion of the Share Value (as hereinafter defined) that the Grantee realizes from the
settlement of RSUs occurring within six months before or one year after the Grantee’s
termination of employment (other than a termination of the Grantee’s employment due to the
expiration of the term of the Grantee’s Employment Agreement) with RAM and its Subsidiaries,
if the Grantee engages in Competitive Activity (as defined herein) within one year following
such termination of employment. The Grantee will be considered to engage in “Competitive
Activity” if the Grantee (i) enters into a relationship as an employee, officer, partner,
member, director, independent contractor, consultant, advisor, or agent of, or in any
similar relationship with, any corporation, partnership, limited liability company, joint
venture or other business entity that engages in a financial guaranty reinsurance business,
whether existing or to be formed, without regard to its claims-paying ability (a
“Competitor”), where the Grantee

6

 

will be responsible for providing services which are similar or substantially related
to the services that the Grantee provided during any of the last three years of the
Grantee’s employment with RAM and its Subsidiaries, or (ii) either alone, or in concert with
others, acquires or maintains beneficial ownership (within the meaning of Section 13(d) of
the Securities Exchange Act of 1934, as amended) of 5% or more of any class of equity
securities of a Competitor. For purposes hereof, “Share Value” in respect of a RSU means a
cash amount equal to the amount of income that would be reportable in respect of the
settlement of such RSU on the Grantee’s Form W-2 (or successor form) if RAM issued such a
form to the Grantee, as determined by the Committee in its sole discretion for the year in
which such settlement occurs. If the Grantee is required to repay any Share Value to RAM
pursuant to this Section 3(f), the Grantee shall pay such amount in such manner and on such
terms and conditions as RAM may require, and RAM shall be entitled to withhold or set-off
against any other amount owed to the Grantee by RAM or its Subsidiaries (other than any
amount owed to the Grantee under any retirement plan intended to be qualified under Code
Section 401(a)) up to an amount sufficient to satisfy the unpaid obligation of the Grantee
under this Section 3(f).

4. Tax Withholding.

     (a) Prior to either the transfer of Common Shares to the Grantee’s brokerage account or
the delivery of any certificates evidencing Common Shares to be issued in connection with
the full or partial settlement of the RSUs, RAM shall have the right to require the Grantee
to remit to RAM an amount sufficient to satisfy the minimum Federal, State and local tax
withholding requirements. To the extent permitted by applicable law, RAM may permit the
Grantee to satisfy, in whole or in part, such obligation to remit the minimum statutory
withholding amount of taxes by directing RAM to withhold Common Shares that would otherwise
be received by the Grantee, pursuant to such rules as the Committee may establish from time
to time. Under no circumstances will RAM permit the Grantee to withhold Common Shares in
excess of the maximum Federal, state and local withholding requirements.

			
	5.	 	No Restriction on Right to Effect Corporate Changes; No Right to Continued Employment.

     (a) Neither the Plan, this Award Agreement, the grant of the RSUs nor any action taken
hereunder shall affect in any way the right or power of RAM or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other changes in
RAM’s capital structure or its business, or any merger or consolidation of RAM, or any issue
of bonds, debentures, preferred or prior preference shares ahead of or convertible into, or
otherwise affecting the Common Shares or the rights thereof, or the dissolution or
liquidation of RAM, or any sale or transfer of all or any part of its assets or business, or
any other corporate act or proceeding, whether of a similar character or otherwise.

     (b) This Award Agreement is not an employment agreement. Nothing in this Award
Agreement or the Plan, or the granting to the Grantee of the RSUs, shall alter the
Grantee’s status as an “at-will” employee of RAM, unless otherwise provided in the

7

 

Grantee’s employment, management retention, change in control, severance or similar
agreement between the Grantee and RAM or any of its Subsidiaries or affiliates, or be
construed as guaranteeing employment by, or as giving the Grantee any right to continue in
the employ of, RAM or any of its Subsidiaries during any period (including without
limitation the period between the Date of Grant and the settlement date of any RSUs, or any
portion thereof), or as limiting or restricting the right of RAM to terminate the Grantee’s
employment at any time, for any reason, with or without Cause.

6. Adjustment of and Changes in Shares.

     In the event of any merger, amalgamation, consolidation, recapitalization, reclassification,
share dividend, bonus issue, special cash dividend, or other change in corporate structure
affecting the Common Shares, the Committee shall, as necessary, make such equitable adjustments, if
any, as it reasonably deems appropriate in the number and class of shares subject to the RSUs. Any
adjustments shall be reasonably determined by the Committee in its sole discretion with a view to
preserving the benefits or potential benefits intended to be made available to the Grantee.

7. Preemption of Applicable Laws and Regulations.

     Anything herein to the contrary notwithstanding, if, at any time specified herein for the
issuance of Common Shares to the Grantee, any law, regulation or requirement of any governmental
authority having jurisdiction requires either RAM or the Grantee to take any action in connection
with the shares then to be issued, the issuance of such shares shall be deferred until such action
shall have been taken.

8. Committee Decisions Final.

     Any dispute or disagreement which shall rise under, or as a result of, or pursuant to, or in
connection with, this Award Agreement shall be determined by the Committee, and any such
determination or any other determination by the Committee under or pursuant to this Award Agreement
and any interpretation by the Committee of the terms hereof shall be final and binding on all
persons affected thereby.

9. Amendments.

     The Committee shall have the power to alter or amend the terms of the RSUs as set forth
herein, from time to time, in any manner consistent with the Plan; provided, however, that no such
alteration, suspension or amendment may be binding on the Grantee to the extent that is
inconsistent with the terms of any employment, management retention, change in control, severance
or similar agreement between the Grantee and RAM or any of its Subsidiaries or affiliates and
adversely affects the rights of such Grantee under the RSUs without the written consent of the
Grantee, and provided further, that no amendment will be made that is inconsistent with Code
Section 409A. Any alteration or amendment of the terms of the RSUs by the Committee shall, upon
adoption, with written consent to the extent required consistent herewith, become and be binding on
all persons affected thereby without requirement for consent or other action with respect thereto
by any such person. The Committee shall give written notice to the Grantee of any such alteration
or amendment as promptly as practicable after it is adopted.

8

 

The foregoing shall not restrict the ability of the Grantee and RAM by mutual consent to alter
or amend the terms of the RSUs in any manner which is consistent with the Plan and approved by the
Committee. In addition, the terms of the RSU may be amended or supplemented by any employment,
management retention, severance or similar agreement entered into between RAM and the Grantee
(including any such agreement entered into prior to the Date of Grant) and approved, to the extent
such agreement amends or supplements the terms of the RSU, by the Committee. Notwithstanding
anything in the Plan to the contrary, the Committee may amend this Award Agreement, without the
consent of any Grantee, to the extent it deems necessary or desirable to comply with Code Section
409A.

10. Notice Requirements.

     Any notice which either party hereto may be required or permitted to give to the other shall
be in writing. Such notice may be delivered to RAM personally or by mail, postage prepaid and
shall be addressed to RAM in care of its Secretary at the principal executive office of RAM and to
the Grantee at the address appearing in the personnel records of RAM for the Grantee or to either
party at such other address as either party hereto may hereafter designate in writing to the other.
Any such notice shall be deemed effective upon receipt thereof by the addressee.

11. Governing Law.

     The terms and conditions stated herein are to be governed by, and construed in accordance
with, the laws of New York.

12. Entire Agreement; Headings.

     This Award Agreement and the other related documents expressly referred to herein set forth
the entire agreement and understanding between the parties hereto and supersede all prior
agreements and understandings relating to the subject matter hereof, with the exception of any
contrary provisions set forth in any employment, management retention, change in control, severance
or similar agreement between the Grantee and RAM or any of its Subsidiaries or affiliates. The
headings of Sections and subsections herein are included solely for convenience of reference and
shall not affect the meaning of any of the provisions of this Award Agreement.

9

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