Document:

RDN-EX10.6_2014.06.30

Exhibit 10.6

RADIAN GROUP INC.
2014 EQUITY COMPENSATION PLAN

STOCK OPTION GRANT

TERMS AND CONDITIONS

These Terms and Conditions (“Terms and Conditions”) are part of the Stock Option Grant made as of June 17, 2014 (the “Grant Date”), by Radian Group Inc., a Delaware corporation (the “Company”), to the employee (the “Grantee”) named in the Award Summary delivered in connection with this grant (the “Award Summary”).
RECITALS
WHEREAS, the Radian Group Inc. 2014 Equity Compensation Plan  (the “Plan”), permits the grant of stock options to employees, non-employee directors, independent contractors, consultants, and advisors of the Company to purchase shares of Common Stock, in accordance with the terms and provisions of the Plan; 
WHEREAS, the Company desires to grant a Nonqualified Stock Option to the Grantee, and the Grantee desires to accept such Nonqualified Stock Option, on the terms and conditions set forth herein and in the Plan; and
WHEREAS, the applicable provisions of the Plan are incorporated in these Terms and Conditions by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein). 
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows: 
1.Grant of Option.  The Company hereby awards to the Grantee a Nonqualified Stock Option to purchase the number of shares of Common Stock set forth in the Award Summary at the exercise price per share of $15.44, subject to the vesting and other conditions of these Terms and Conditions (the “Option”).  The Grantee hereby accepts the Option and agrees to be bound by the terms and conditions of these Terms and Conditions and the Plan with respect to the award.    
2.Vesting.  
(a)Provided the Grantee remains employed by the Company or a Subsidiary through the applicable vesting date and meets any applicable vesting requirements set forth in these Terms and Conditions, and provided that the Stock Price Hurdle (as defined below) is met, except as set forth in Sections 3 and 4 below, the Option awarded under these Terms and Conditions shall vest as follows:
		
	Date
	Vested Shares subject to the Option 

(subject to achievement of the Stock Price Hurdle)

June 17, 2017            50% of the shares                

June 17, 2018            Remaining 50% of the shares                
(b)Notwithstanding the foregoing, the Option will only vest if the closing price of the Company’s Common Stock on the New York Stock Exchange equals or exceeds $19.30 (which is 125% of the fair market value of the Company’s Common Stock on the Grant Date) for ten consecutive trading days ending on or after June 17, 2017 (the “Stock Price Hurdle”), except as provided in Sections 3 and 4 below.  If the Stock Price Hurdle has not been met on the third anniversary of the Grant Date (June 17, 2017), the Option with respect to 50% of the shares will vest on the first date after the third anniversary on which the Stock Price Hurdle is met, provided the Grantee remains employed by the Company or a Subsidiary through the applicable vesting date.  If the Stock Price Hurdle has not been met on the fourth anniversary of the Grant Date (June 17, 2018), the Option with respect to the remaining 50% of the shares will vest on the first date after the fourth anniversary on which the Stock Price Hurdle is met, provided the Grantee remains employed by the Company or a Subsidiary through the applicable vesting date.  The Stock Price Hurdle must be met by June 16, 2024 in order for the Option to vest under this Section 2.  
(c)If the vesting schedule above would produce a fractional share, the portion of the Option that is exercisable shall be rounded down to the nearest whole share.   

(d)Except as provided in Sections 3 and 4 below, no portion of the Option will vest after the Grantee’s employment with the Company and its Subsidiaries has terminated for any reason.  In the event of any termination of employment, the Grantee will forfeit the portion of the Option that does not vest either before the termination date or on the termination date associated with such termination.   
3.Retirement, Disability and Death.  
(a)In the event of (i) the Grantee’s termination of employment due to Retirement or (ii) the Grantee’s death or Disability while employed by the Company or a Subsidiary, the Grantee’s Option will automatically vest in full on the date of the Grantee’s Retirement, death or Disability, as applicable, regardless of whether the Stock Price Hurdle has been met.  
(b)For purposes of these Terms and Conditions, “Retirement” shall mean the Grantee’s separation from service, without Cause, other than on account of death or Disability, (A) following the Grantee’s attainment of age 65 and completion of five years of service with the Company or a Subsidiary, or (B) following the Grantee’s attainment of age 55 and completion of 10 years of service with the Company or a Subsidiary.
(c)For purposes of these Terms and Conditions, “Disability” shall mean a physical or mental impairment of sufficient severity that the Grantee is both eligible for and in receipt of benefits under the long-term disability program maintained by the Company, provided that the Grantee completes 30 days of active service with the Company at any time after the Grant Date and prior to the first vesting date.  The date of Disability for purposes of these Terms and Conditions is the date on which the Grantee has been in receipt of such long-term disability benefits for six consecutive months.  In the event that the Grantee is not in active service on the Grant Date (for example, on account of short-term disability) and the Grantee does not return to the Company and complete 30 days of active service with the Company prior to the first vesting date, the Option will be forfeited.
(d)For purposes of these Terms and Conditions, “Cause” shall mean the Grantee’s (A) indictment for, conviction of, or pleading nolo contendere to, a felony or a crime involving fraud, misrepresentation, or moral turpitude (excluding traffic offenses other than traffic offenses involving the use of alcohol or illegal substances), (B) fraud, dishonesty, theft, or misappropriation of funds in connection with the Grantee’s duties with the Company and its Subsidiaries, (C) material violation of the Company’s Code of Conduct or employment policies, as in effect from time to time, (D) gross negligence or willful misconduct in the performance of the Grantee’s duties with the Company and its Subsidiaries, or (E) a breach of any written confidentiality, nonsolicitation, or noncompetition covenant with the Company or an Affiliate, in each case as determined in the sole discretion of the Committee.
4.Change of Control.  
(a)If a Change of Control occurs, the Grantee’s Option shall continue to vest in accordance with Section 2(a) on the third and fourth anniversaries of the Grant Date, without regard to whether the Stock Price Hurdle is met, provided that the Grantee remains continuously employed by the Company and its Subsidiaries through such vesting date.  If the Change of Control occurs after the third anniversary of the Grant Date and before the Stock Price Hurdle has been met, the Option with respect to 50% of the shares will vest on the Change of Control date.  If the Change of Control occurs after the fourth anniversary of the Grant Date and before the Stock Price Hurdle has been met, the Option with respect to all of the shares will vest on the Change of Control date.  However, in no event may the Option be exercised after ten years from the Grant Date. 
(b)Notwithstanding the foregoing, if a Change of Control occurs and the Grantee’s employment with the Company and its Subsidiaries is terminated by the Company or a Subsidiary without Cause or the Grantee terminates employment for Good Reason (as defined herein), and the Grantee’s date of termination occurs (or in the event of the Grantee’s termination for Good Reason, the event giving rise to Good Reason occurs), in each case, during the period beginning on the date that is 90 days before the Change of Control and ending on the date that is one year following the Change of Control, the Option will automatically vest in full on the Grantee’s date of termination (or, if later, on the date of the Change of Control), regardless of whether the Stock Price Hurdle has been met.  However, in no event may the Option be exercised after ten years from the Grant Date.  
(c)For purposes of these Terms and Conditions, “Good Reason” shall mean: 
(i)a material diminution of the Grantee’s authority, duties or responsibilities;
(ii)a material reduction in the Grantee’s base salary, which, for purposes of these Terms and Conditions, means a reduction in base salary of 10% or more that does not apply generally to all similarly situated employees of the Company; or
(iii)any material change in the geographic location at which the Grantee must perform his duties to the Company and its Subsidiaries, which, for purposes of these Terms and Conditions, means the permanent relocation of the Grantee’s principal place of employment to any office or location which is located more than 100 miles from the location where the Grantee is based immediately prior to the change in location.  

In order to terminate employment for Good Reason, the Grantee must provide a written notice of termination with respect to termination for Good Reason to the Company within 90 days after the event constituting Good Reason has occurred.  The Company shall have a period of 30 days in which it may correct the act, or the failure to act, that gave rise to the Good Reason event as set forth in the notice of termination.  If the Company does not correct the act, or the failure to act, the Grantee must terminate employment for Good Reason within 30 days after the end of the cure period, in order for the termination to be considered a Good Reason termination.  Notwithstanding the foregoing, in no event will the Grantee have Good Reason for termination if an event described in Section 4(c)(i) occurs in connection with the Grantee’s inability to perform his or her duties on account of illness or short-term or long-term disability.
(d)For the avoidance of doubt, in no event shall a Change of Control occur as a result of the Company’s participation in the Troubled Asset Relief Program under the Emergency Economic Stabilization Act of 2008, the American Recovery and Reinvestment Act of 2009, or any similar program of the United States, any of its states, or any of their respective political subdivisions, departments, agencies or instrumentalities.
5.Exercise of the Option.  When the Option becomes vested in accordance with Sections 2, 3, or 4 above, the Grantee may exercise part or all of the vested and exercisable Option by delivering a duly completed notice of intent to exercise to the Company, specifying the number of shares as to which the Option is to be exercised and the method of payment.  Payment of the exercise price shall be made in accordance with procedures in effect from time to time based on the type of payment being made but, in any event, prior to issuance of the shares of Common Stock.  The Grantee shall pay the exercise price (i) in cash, (ii) by authorizing a third party to sell shares of Common Stock acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the exercise price and any applicable tax withholding resulting from such exercise, (iii) if so permitted by the Committee and subject to such conditions as may be established by the Committee, (1) by tendering (actually or by attestation) shares of Common Stock owned by the Grantee and valued at the then Fair Market Value thereof or (2) by having shares subject to the exercisable Option withheld to pay the exercise price, with the shares valued at the then Fair Market Value thereof, or (iv) by any combination of the foregoing.  The Company’s obligation to deliver shares of Common Stock upon exercise of the Option shall be subject to all applicable laws, rules and regulations and also to such approvals by governmental agencies as may be deemed appropriate by the Committee.  Upon exercise of the Option (or portion thereof), the Option (or portion thereof) will terminate and cease to be outstanding.   
6.Transferability.
(a)During the Grantee’s lifetime, except as set forth in subsection (b) below, exercise of the Option shall be solely by the Grantee (or his or her legal guardian or legal representative) and, after the Grantee’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solely by the legal representatives of the Grantee, or by the person or persons who acquire the right to exercise such Option by will or by the laws of descent and distribution, to the extent that the Option was outstanding as of the date of the Grantee’s death.  Neither the Option nor any right hereunder shall be assignable or otherwise transferable except by will or by the laws of descent and distribution or except as otherwise permitted by the Plan, nor shall any Option be subject to attachment, execution or other similar process.  In the event of any attempt by the Grantee to alienate, assign, pledge, hypothecate or otherwise dispose of any Option or any right hereunder, except as provided for herein, or in the event of the levy of any attachment, execution or similar process upon the rights or interest hereby conferred, the Company may terminate any Option by notice to the Grantee and the Option and all rights hereunder shall thereupon become null and void. 
(b)Notwithstanding the foregoing, the Committee may provide that a Grantee may transfer this Option to family members, one or more trusts for the benefit of family members, or one or more partnerships of which family members are the only partners, according to such terms as the Committee may determine; provided that the Grantee receives no consideration for the transfer of an Option and the transferred Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.
7.Termination of the Option.  
(a)The Option shall have a term of ten years from the Grant Date and shall terminate at the expiration of that period (on June 16, 2024), unless the Option is terminated at an earlier date pursuant to the provisions of these Terms and Conditions or the Plan.  
(b)The Option granted and subsequently vested hereunder (including pursuant to Section 4 hereof) shall terminate immediately after the first to occur of: (i) one year after the termination of the Grantee’s employment with the Company or a Subsidiary due to an involuntary termination by the Company or a Subsidiary without Cause (except as provided in subsection (c) below), (ii) one year after the termination of the Grantee’s employment with the Company or a Subsidiary by the Grantee for Good Reason during the Change of Control period described in Section 4(b) hereof (except as provided in subsection (c) below), (iii) 90 days after the Grantee’s voluntary termination of employment with the Company and its 

Subsidiaries (except as provided in subsection (c) below or as provided in clause (ii) above), or (iv) ten years from the Grant Date.  
(c)In the event of the termination of the Grantee’s employment on account of Retirement, Disability or death of a Grantee, the Option held by the Grantee may be exercised, pursuant to the terms of the Plan, by the Grantee (or the Grantee’s personal representative) at any time prior to the expiration of the ten-year term of the Option.  
(d)Notwithstanding the foregoing, in no event may the Option be exercised after ten years from the Grant Date (after June 16, 2024).  Any portion of the Option that is not vested at the time the Grantee ceases to be employed by the Company and its Subsidiaries shall immediately terminate.  
(e)In the event a Grantee’s employment is terminated by the Company or a Subsidiary for Cause, the Option (including the vested portion, if any) held by such Grantee shall immediately terminate and be of no further force or effect.
8.Certain Corporate Changes.  If any change is made to the Common Stock (whether by reason of merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination of shares, or exchange of shares or any other change in capital structure made without receipt of consideration), then unless such event or change results in the termination of the Option, the Committee shall adjust, as provided in the Plan, the number and class of shares subject to the Option held by the Grantee and/or the exercise price of such Option, and the Stock Price Hurdle, if appropriate, to reflect the effect of such event or change in the Company’s capital structure in such a way as to preserve the value of the Option. Any adjustment that occurs under the terms of this Section 8 or the Plan will not change the timing or form of payment with respect to any exercised Option or portion thereof.
9.Restrictive Covenants. 
(a)The Grantee acknowledges and agrees that, during the Grantee’s employment with the Company and its Affiliates, and for the 12 month period following the Grantee’s termination of employment for any reason (the “Restricted Period”), the Grantee will not, without the Company’s express written consent, engage (directly or indirectly) in any employment or business activity whose primary business involves or is related to providing mortgage insurance, financial guaranty insurance, or mortgage outsourcing services (including loan review and/or due diligence, surveillance, REO/Short Sale services, and REO component services) within the United States.  The Grantee further agrees that, given the nature of the business of the Company and its Affiliates, a nationwide geographic scope is appropriate and reasonable.
(b)For purposes of these Terms and Conditions, the Grantee acknowledges and agrees that the terms “Confidential Information” and “Trade Secrets” shall mean information that the Company or any of its Affiliates owns or possesses, that the Company or its Affiliates have developed at significant expense and effort, that they use or that is potentially useful in the business of the Company or its Affiliates, that the Company or its Affiliates treat as proprietary, private, or confidential, and that is not generally known to the public.  The Grantee further acknowledges that the Grantee’s relationship with the Company is one of confidence and trust such that the Grantee has in the past been, and may in the future be, privy to Confidential Information and Trade Secrets of the Company or any of its Affiliates.  The Grantee agrees to keep all Confidential Information and Trade Secrets strictly confidential, and to comply with all applicable confidentiality policies of the Company, including the Code of Conduct and Ethics.
(c)The Grantee covenants and agrees that during the term of the Grantee’s employment by the Company and during the Restricted Period, the Grantee shall not, directly or indirectly through others, (i) hire or attempt to hire any employee of the Company or any of its Affiliates, (ii) solicit or attempt to solicit any employee of the Company or its Affiliates to become an employee, consultant, or independent contractor to, for or of any other person or business entity, or (iii) solicit or attempt to solicit any employee, or any consultant or independent contractor of the Company or any of its Affiliates to change or terminate his or her relationship with the Company or any of its Affiliates, unless in each case more than six months shall have elapsed between the last day of such person’s employment or service with the Company or any of its Affiliates and the first date of such solicitation or hiring or attempt to solicit or hire.  If any employee, consultant, or independent contractor is hired or solicited by any entity that has hired or agreed to hire the Grantee, such hiring or solicitation shall be conclusively presumed to be a violation of these Terms and Conditions; provided, however, that any hiring or solicitation pursuant to a general solicitation conducted by an entity that has hired or agreed to hire the Grantee, or by a headhunter employed by such entity, which does not involve the Grantee, shall not be a violation of this Section 9(c).
(d)The Grantee covenants and agrees that during the term of the Grantee’s employment by the Company or its Affiliates and during the Restricted Period, the Grantee shall not, either directly or indirectly through others:
(i)solicit, divert, appropriate or do business with, or attempt to solicit, divert, appropriate, or do business with, any customer for whom the Company or any of its Affiliates provided goods or services within 12 months prior to the Grantee’s date of termination or any actively sought prospective customer of the Company or any of its Affiliates for the purpose of providing such customer or actively sought prospective customer with services or products competitive with those offered by the Company or any of its Affiliates during the Grantee’s employment with the Company or any of its Affiliates, or 

(ii)encourage any customer for whom the Company or any of its Affiliates provided goods or services within 12 months prior to the Grantee’s date of termination to reduce the level or amount of business such customer conducts with the Company or any of its Affiliates.
(e)The Grantee acknowledges and agrees that the business of the Company and its Affiliates is highly competitive, that the Confidential Information and Trade Secrets have been developed by the Company at significant expense and effort, and that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and its Affiliates.
(f)Because the Grantee’s services are personal and unique and the Grantee has had and will continue to have access to and has become and will continue to become acquainted with Confidential Information and Trade Secrets, the parties to these Terms and Conditions acknowledge and agree that any breach by the Grantee of any of the covenants or agreements contained in Section 9 will result in irreparable injury to the Company or any of its Affiliates, as the case may be, for which money damages could not adequately compensate such entity.  Therefore, the Company or any of its Affiliates shall have the right (in addition to any other rights and remedies which it may have at law or in equity and in addition to the forfeiture requirements set forth in Section 9(g) below) to seek to enforce Section 9 and any of its provisions by injunction, specific performance, or other equitable relief, without bond and without prejudice to any other rights and remedies that the Company or any of its Affiliates may have for a breach, or threatened breach, of the restrictive covenants set forth in Section 9.  The Grantee agrees that in any action in which the Company or any of its Affiliates seeks injunction, specific performance, or other equitable relief, the Grantee will not assert or contend that any of the provisions of Section 9 are unreasonable or otherwise unenforceable.  The Grantee irrevocably and unconditionally (i) agrees that any legal proceeding arising out of this paragraph may be brought in the United States District Court for the Eastern District of Pennsylvania, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in Philadelphia County, Pennsylvania, (ii) consents to the non-exclusive jurisdiction of such court in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any such court.  The Grantee also irrevocably and unconditionally consents to the service of any process, pleadings, notices or other papers.
(g)The Grantee acknowledges and agrees that in the event the Grantee breaches any of the covenants or agreements contained in this Section 9:
(i)The Committee may in its discretion determine that the Grantee shall forfeit the outstanding Option (without regard to whether any portion of the Option has vested), and the outstanding Option shall immediately terminate, and
(ii)The Committee may in its discretion require the Grantee to return to the Company any shares of Common Stock received upon exercise of the Option, net of the exercise price paid by the Grantee upon exercise of the Option; provided, that if the Grantee has disposed of any shares of Common Stock received upon exercise of the Option, then the Committee may require the Grantee to pay to the Company, in cash, the fair market value of such shares of Common Stock as of the date of disposition, net of the exercise price paid by the Grantee upon exercise of the Option.   The Committee shall exercise the right of recoupment provided in this Section 9(g)(ii) within 180 days after the Committee’s discovery of the Grantee’s breach of any of the covenants or agreements contained in this Section 9.
(h)If any portion of the covenants or agreements contained in this Section 9, or the application hereof, is construed to be invalid or unenforceable, the other portions of such covenants or agreements or the application thereof shall not be affected and shall be given full force and effect without regard to the invalid or unenforceable portions to the fullest extent possible.  If any covenant or agreement in this Section 9 is held to be unenforceable because of the duration thereof or the scope thereof, then the court making such determination shall have the power to reduce the duration and limit the scope thereof, and the covenant or agreement shall then be enforceable in its reduced form.  The covenants and agreements contained in this Section 9 shall survive the termination of these Terms and Conditions.
10.Grant Subject to Plan Provisions.  These Terms and Conditions are made pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and shall in all respects be interpreted in accordance therewith.  The decisions of the Committee shall be conclusive upon any question arising hereunder.  The Grantee’s receipt of the Option awarded under these Terms and Conditions constitutes such Grantee’s acknowledgment that all decisions and determinations of the Committee with respect to the Plan, these Terms and Conditions, and/or the Option shall be final and binding on the Grantee, his or her beneficiaries, and any other person having or claiming an interest in such Option.  The settlement of any award with respect to the Option is subject to the provisions of the Plan and to interpretations, regulations, and determinations concerning the Plan as established from time to time by the Committee in accordance with the provisions of the Plan.  A copy of the Plan will be furnished to each Grantee upon request. Additional copies may be obtained from the Corporate Secretary of the Company, 1601 Market Street, Philadelphia, Pennsylvania 19103-2197.
11.No Employment or Other Rights.  Neither the granting of the Option, nor any other action taken with respect to such Option, shall confer upon the Grantee any right to continue in the employ of the Company or a Subsidiary or shall interfere in any way with the right of the Company or a Subsidiary to terminate Grantee’s employment at any time.  The right of the 

Company or a Subsidiary to terminate at will the Grantee’s employment or service at any time for any reason is specifically reserved.
12.No Stockholder Rights.  Neither the Grantee, nor any person entitled to exercise the Grantee’s rights in the event of the Grantee’s death or in accordance with the terms of these Terms and Conditions, shall have any of the rights and privileges of a stockholder with respect to the shares subject to the Option, except to the extent that certificates for such shares shall have been issued upon the exercise of the Option as provided for herein (or an appropriate book entry has been made).  Except as described in the Plan, no adjustments are made for dividends or other rights if the applicable record date occurs before Grantee’s shares are issued (or an appropriate book entry has been made).
13.Assignment and Transfers.  The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and other Affiliates.  These Terms and Conditions may be assigned by the Company without the Grantee’s consent.
14.Income Taxes; Withholding Taxes.  All obligations of the Company under these Terms and Conditions shall be subject to the rights of the Company as set forth in the Plan to withhold amounts required to be withheld for any taxes, if applicable.  At the time of exercise, the Company shall have the right to deduct from other compensation, or to withhold shares of Common Stock, in an amount equal to the federal (including FICA), state, local, and foreign income taxes and other amounts as may be required by law to be withheld with respect to the exercise of the Option, provided that any share withholding shall not exceed the Grantee’s minimum applicable withholding tax rate for federal (including FICA), state, local, and foreign tax liabilities.
15.Applicable Law.  The validity, construction, interpretation, and effect of this instrument shall exclusively be governed by, and determined in accordance with, the applicable laws of the State of Delaware, excluding any conflicts or choice of law rule or principle.  This Option award shall be subject to any required approvals by any governmental or regulatory agencies.  This Option award shall also be subject to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time.  Notwithstanding anything in these Terms and Conditions to the contrary, the Plan, these Terms and Conditions, and the Option awarded hereunder shall be subject to all applicable laws, including any laws, regulations, restrictions, or governmental guidance that becomes applicable in the event of the Company’s participation in any governmental programs, and the Committee reserves the right to modify these Terms and Conditions and the Option as necessary to conform to any restrictions imposed by any such laws, regulations, restrictions, or governmental guidance or to conform to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time.  As a condition of participating in the Plan, and by the Grantee’s acceptance of the Option, the Grantee is deemed to have agreed to any such modifications that may be imposed by the Committee, and agrees to sign such waivers or acknowledgments as the Committee may deem necessary or appropriate with respect to such modifications.
16.Notice.  Any notice to the Company provided for in these Terms and Conditions shall be addressed to it in care of the Corporate Secretary of the Company, 1601 Market Street, Philadelphia, Pennsylvania 19103-2197, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll of the Company or an Affiliate, or to such other address as the Grantee may designate to the Company in writing in accordance with this Section.  Except as otherwise provided by this Section, any notice provided for hereunder shall be delivered by hand, sent by telecopy or electronic mail, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage and registry fee prepaid in the United States mail or other mail delivery service.  Notice to the Company shall be deemed effective upon receipt.  By receipt of the Option granted hereunder, Grantee hereby consents to the delivery of information (including without limitation, information required to be delivered to the Grantee pursuant to the applicable securities laws) regarding the Company, the Plan, and the Option via the Company’s electronic mail system or other electronic delivery system.

IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute and attest this instrument, and the Grantee has placed his or her signature hereon, effective as of the Grant Date set forth above.

RADIAN GROUP INC.

By:       /s/ Anita Scott
Name:    Anita Scott
Title:    SVP, Chief Human Resources Officer
By electronically acknowledging and accepting this Option award following the date of the Company’s electronic notification to the Grantee, the Grantee (a) acknowledges receipt of the Plan incorporated herein, (b) acknowledges that he or she has read the Award Summary and these Terms and Conditions and understands the terms and conditions of them, (c) accepts the award of the Option described in these Terms and Conditions, (d) agrees to be bound by the terms of the Plan and these Terms and Conditions, and (e) agrees that all decisions and determinations of the Committee with respect to the Option shall be final and binding.RDN-EX10.7_2014.06.30

Exhibit 10.7

May 1, 2014

Mr. Paul T. Bossidy
34 Wild Turkey Court
Ridgefield, CT  06877

Re:    Terms of Employment
Dear Paul,
Reference is made to the Securities Purchase Agreement by and among Radian Group Inc. (the “Company”), Clayton Holdings LLC and the other parties thereto, dated as of the date hereof (the “Purchase Agreement”).  This letter agreement will become effective as of the consummation of the transactions contemplated by the Purchase Agreement (the “Transactions”).  If the Transactions do not occur, this letter agreement shall not become effective and shall be void ab initio.
This letter agreement sets forth the terms of your employment as President of Clayton Holdings LLC, a direct subsidiary of the Company.  
The specifics of your employment are as follows:
		
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	Duties and Reporting:  Your duties and responsibilities will be commensurate with your position, as may be assigned from time to time.  You will initially report to the Chief Executive Officer of the Company.  You will devote substantially all of your business time and efforts towards performing your duties and responsibilities for the Company.

		
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	Location and Office:  You will initially provide services from the Company’s offices in Shelton, Connecticut, subject to reasonable business travel (including to other offices of the Company or its subsidiaries) commensurate with your duties and responsibilities; provided, that, the Chief Executive Officer of the Company may, at any time following the date that is nine months after the consummation of the Transactions, require you to relocate your principal place of employment to Philadelphia, Pennsylvania or New York, New York, as determined by the Chief Executive Officer of the Company in his sole discretion.  If you are required to relocate, you will be entitled to reimbursement of expenses in accordance with the Company’s relocation policy as in effect from time to time.

		
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	Annual Base Salary:  You will receive an annual base salary of $500,000.

		
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	Short- and Medium-Term Incentive:  You will be eligible to participate in the Company’s STI/MTI Incentive Plan for Executive Employees, as in effect from time to time (“STI/MTI”); provided, that, with respect to the 2014 fiscal year of the Company, (i) you will participate in the STI/MTI without giving effect to the MTI component of the STI/MTI and (ii) your earned bonus will be pro-rated based on the number of days from the consummation of the Transactions through the end of the 2014 fiscal year.  Your target annual bonus opportunity under the STI/MTI will equal 150% of your annual base salary (“Target Bonus Amount”), with the actual amount earned to be determined by the Compensation and Human Resources Committee of the Board of Directors of the Company (the “Compensation Committee”) in accordance with the terms of the STI/MTI, taking into account applicable performance goals.  Except as otherwise provided herein, your STI/MTI bonus will be paid in accordance with the terms of the STI/MTI.

		
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	Long-Term Incentive Plan:  With respect to the 2014 fiscal year of the Company, you will be eligible to receive an annual equity award grant in respect of Company common stock under the Company’s 2014 Equity Compensation Plan, as in effect from time to time (“Equity Plan”), with a target annual opportunity based on a grant date fair value equal to $750,000 (the “2014 LTI Award”).  The 2014 LTI Award will be made upon, or as soon as reasonably practicable following, the consummation of the Transactions and shall have the same terms as equity awards granted as part of the annual Equity Plan grants to the Company’s executive officers with respect to fiscal year 2014 generally, as determined by the Compensation Committee; provided, that, the exercise price of any stock options granted as part of the 2014 LTI Award will be the greater of the fair market value of Company’s common stock on the date of grant and the exercise price of the stock options granted as part of the 2014 grant; provided, further, that, any request to relocate as described under the heading “Location and Office” above will not constitute “Good Reason” under the applicable individual award agreement evidencing the terms and conditions of your 2014 LTI Award.  With respect to the 2015 fiscal year of the Company and each fiscal year thereafter, you will be eligible to receive an annual equity award in respect of Company common stock under the Equity Plan or any successor plan.  

		
	•
	You and the Company will enter into the severance agreement (“Executive Officer Agreement”) attached as Appendix A to become effective as of the consummation of the Transactions, which includes the terms and conditions of your eligibility for severance payments and restrictive covenants, including non-competition and non-solicitation covenants, that will apply during the term of your employment and for the periods following termination of your employment for any reason as specified therein.

As we discussed, the compensation of executive officers of Radian and its affiliates is reviewed and determined in the sole discretion of the Compensation Committee.  Following its review, which is performed at least annually, the Compensation Committee may make changes to your compensation as set forth above.
This letter agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) or an exemption from Section 409A, and shall in all respects be administered in accordance with Section 409A.  Any payments under this letter agreement that qualify for the “short-term deferral” exception shall be paid under such exception.  Notwithstanding anything in this letter agreement to the contrary, payments upon termination of employment, if any, may only be made upon a Section 409A “separation from service.”  For purposes of Section 409A, the right to a series of payments under this letter agreement, if any, shall be treated as a right to a series of separate payments.  In no event may you, directly or indirectly designate the calendar year of payment. Any reimbursements and in-kind benefits provided under this letter agreement shall be made or provided in accordance with the requirements of Section 409A.
This letter agreement and the Executive Officer Agreement supersede any and all employment and compensation agreements between you and the Company or its affiliates, including the Employment Agreement with Clayton Holdings LLC dated as of October 20, 2008, as amended and restated December 31, 2012, and as further amended March __, 2014; provided, that, nothing herein shall be deemed to waive your rights to any payments with respect to your Class A or Class B Units pursuant to the Purchase Agreement, including but not limited to any payments that may be due to you as a result of the release of any escrow amount, and in the case of any indemnity obligation of yours that is not fulfilled via the escrow pursuant to the Purchase Agreement, Company shall have the right to offset any compensation otherwise due to you.
Your employment with the Company is at will.  This means that you and the Company or its designee have the right to terminate the employment relationship with or without cause, at any time, with or without notice, subject to the terms of the Executive Officer Agreement, once executed.  Nothing in this letter agreement or any other employment materials you may receive is intended, nor should any of it be construed or implied, to create an employment contract between you the Company or Clayton Holdings LLC.  The Company retains the right to amend or terminate its and Clayton Holdings LLC’s compensation programs and benefit plans at any time.  All compensation described in this letter agreement is subject to applicable tax withholding.
This letter agreement shall be governed, construed, and interpreted under the laws of the State of Delaware without giving effect to any conflict of laws provisions.

Two copies of this letter and the Executive Officer Agreement are enclosed (sending electronically and hard copy).  If you agree to their terms, please keep one copy of each for your files, and sign, date and return the other copies to me.
We are pleased with your decision to accept this position and we believe this opportunity will result in a mutually beneficial and rewarding relationship.  Please contact me at 215-231-1437 with any questions.

Radian Group Inc.
By: /s/ Anita Scott
Anita Scott, SVP, Chief Human Resources Officer
cc:  S. A. Ibrahim

I agree to the terms of this letter agreement, including the Appendices attached hereto.

___/s/ Paul T. Bossidy___________    _______5/1/2014__________________
Paul T. Bossidy                Date

APPENDIX A
    
EXECUTIVE OFFICER AGREEMENT
THIS AGREEMENT (the “Agreement”) is made and entered into this _____ day of May, 2014 by and between Radian Group Inc. (the “Company”) and Paul T. Bossidy (the “Executive”).   
WHEREAS, reference is hereby made to that certain Securities Purchase Agreement by and among Clayton Holdings LLC, the Company and the other parties thereto, dated as of May 6, 2014 (the “Purchase Agreement”);
WHEREAS, this Agreement will be effective (the “Effective Date”) as of the consummation of the transactions contemplated by the Purchase Agreement (the “Transactions”) and, if the Transactions do not occur, this Agreement shall not become effective and shall be void ab initio;
WHEREAS, concurrently with the execution of the Purchase Agreement, the Executive and the Company have entered into a Letter Agreement setting forth the terms of the Executive’s employment with the Company and its subsidiaries, which will be effective as of the consummation of the Transactions (the “Letter Agreement”); and
WHEREAS, the Compensation and Human Resources Committee of the Board of Directors of the Company (the “Board”) has determined that an agreement providing severance benefits in the event of certain terminations of employment is important for recruiting, motivating and retaining Executive in the competitive and consolidating industries in which the Company participates.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, the parties hereto agree as follows:
1.Term.  The term of this Agreement (the “Term”) shall begin on the Effective Date and shall end on December 31, 2014 or, if earlier, the Executive’s Termination Date (as defined below).  On December 31, 2014, and each December 31st thereafter, the Term shall be extended for one (1) additional year unless the Company gives the Executive at least forty-five (45) days prior written notice that the Term will not be extended, or the Executive shall have incurred a Termination of Employment (as defined below) before such date. A notice by the Company not to extend the Term shall not, in and of itself, be considered a Termination of Employment or a Good Reason event (as defined below) for purposes of this Agreement.
		
	2.
	Definitions. When used in this Agreement, the following terms shall have the specific meanings shown in this Section unless the context of any provision of this Agreement clearly requires otherwise:

(a)“Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
(b)“Cause” shall mean (i) misappropriation of funds with respect to the Company or its Affiliates, (ii) habitual insobriety, (iii) substance abuse, (iv) a material violation of the Code of Conduct and Ethics or employment policies of the Company or an Affiliate, as in effect from time to time, (v) a breach of any written confidentiality, nonsolicitation or noncompetition covenant with the Company or an Affiliate, (vi) conviction of a crime involving moral turpitude, or (vii) gross negligence in the performance of duties, which gross negligence has had a material adverse effect on the business, operations, assets, properties or financial condition of the Company and its Affiliates taken as a whole or, where the Executive’s professional efforts are principally on behalf of a single Affiliate of the Company, a material adverse effect on the business, operations, assets, properties or financial condition of such Affiliate.
(c) “Code” shall mean the Internal Revenue Code of 1986, as amended.
(d)“Disability” shall mean a long-term disability under the applicable long-term disability plan of the Company. 
(e)“Good Reason” shall mean one or more of the following events:
(A)any material diminution by the Company of the authority, duties or responsibilities of the Executive;
(B)any material reduction in the Executive’s base salary, which, for purposes of this Agreement, means a reduction in base salary of ten (10) percent or more that does not apply generally to all similarly situated employees of the Company;

(C)without Executive’s consent, any material change in the geographic location at which the Executive must perform his duties to the Company, which, for purposes of this Agreement, means the permanent relocation of the Executive’s principal place of employment to any office or location which is located more than one hundred (100) miles from the location where the Executive is based immediately prior to the change in location; provided, that, the Chief Executive Officer of the Company may, at any time following the date that is nine months after the consummation of the Transactions, require the Executive to relocate the Executive’s principal place of employment to Philadelphia, Pennsylvania or New York, New York, as determined by the Chief Executive Officer of the Company in his sole discretion, and any such required relocation shall not constitute “Good Reason” hereunder; or
(D)any action or inaction that constitutes a material breach by the Company of this Agreement, including without limitation, any failure of the Company to obtain an agreement from any successor of the Company to perform this Agreement in accordance with Section 13 hereof.
The Executive must provide a written Notice of Termination (as defined below) with respect to a termination for Good Reason to the Company within ninety (90) days after the event constituting Good Reason has occurred.  The Company shall have a period of thirty (30) days in which it may correct the act, or the failure to act, that gave rise to the Good Reason event as set forth in the Executive’s Notice of Termination.  If the Company does not correct the act, or the failure to act, the Executive must terminate employment for Good Reason within thirty (30) days after the end of the cure period, in order for the termination to be considered a Good Reason termination.  Notwithstanding the foregoing, in no event will the Executive have Good Reason for termination if an event described in (A) above occurs in connection with the Executive’s inability to perform his or her duties on account of illness or short-term or long-term disability.
(f)“Person” shall mean any individual, firm, corporation, partnership or other entity.
(g)“Qualifying Termination” shall mean a Termination of Employment that is either:
(i)initiated by the Company for any reason other than the Executive’s Disability or for Cause; or
(ii)initiated by the Executive for Good Reason.
(h)“Release” shall mean a release of claims as described in Section 4(b)(vi).
(i)“Termination Date” shall mean the date on which the Executive’s employment with the Company and its Affiliates terminates.
(j)“Termination of Employment” shall mean the termination of the Executive’s employment relationship with the Company and its Affiliates.
3.Notice of Termination. Any Qualifying Termination or other Termination of Employment shall be communicated by a Notice of Termination to the other party hereto given in accordance with Section 14 hereof. For purposes of this Agreement, a “Notice of Termination” means a written notice which (a) indicates the specific termination provision in this Agreement relied upon, (b) briefly summarizes the facts and circumstances deemed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (c) specifies the Termination Date. Any Notice of Termination by the Executive with respect to a Good Reason termination must specify a Termination Date that is consistent with the notice and cure provisions of Section 2(e). Any other Notice of Termination by the Executive shall specify a Termination Date not less than thirty (30) days after the date of the Notice of Termination, unless the Company agrees to an earlier Termination Date.
		
	4.
	Benefits Upon a Qualifying Termination. 

(a)If the Executive fails to execute, or revokes, a written Release, upon a Qualifying Termination, the Executive shall receive only any accrued but unpaid salary through the Termination Date and any benefits accrued and due under any applicable benefit plans and programs of the Company. No other payments or benefits shall be due under this Agreement to the Executive.
(b)In the event of the Executive’s Qualifying Termination, if the Executive executes and does not revoke a Release, the Executive shall be entitled to receive the following severance benefits:
(i)The Company shall pay to the Executive an amount in cash equal to one and one-half (1 1/2) times the Executive’s annual base salary as in effect at the Termination Date.  This severance amount will be paid in equal installments in accordance with the Company’s normal payroll practices over the eighteen (18) month period following the Termination Date (the “Severance Period”). The first payment will be made on the thirtieth (30th) day following the Termination Date, and the first payment will include the installments for the first thirty (30) days after the Termination Date.  
(ii)The Company shall pay to the Executive an amount in cash equal to one and one-half (1 1/2) times the Executive’s Target Incentive Award under the Company’s STI/MTI Incentive Plan for Executive Employees, or any successor plan applicable to executive officers (“STI/MTI Program”) for the year in which the Termination Date occurs. The payment shall be made in a lump sum payment on the thirtieth (30th) day following the Termination Date.

(iii)The Company shall pay to the Executive a prorated Target Incentive Award under the STI/MTI Program for the year in which the Termination Date occurs. The prorated bonus will be an amount in cash equal to the Executive’s Target Incentive Award under the STI/MTI Program for the year in which the Termination Date occurs multiplied by a fraction, the numerator of which is the number of days that the Executive was employed by the Company and its Affiliates during the year of termination and the denominator of which is three hundred and sixty five (365). The payment shall be made in a lump sum payment on the thirtieth (30th) day following the Termination Date. The payment under this Section 4(b)(iii) shall not affect the Executive’s right to any accrued but unpaid STI Bonus or MTI Bonus amounts that may be payable under the STI/MTI Program in accordance with the terms of the STI/MTI Program.
(iv)For the period beginning on the Termination Date and ending on the earlier of (A) the date on which the Executive first becomes covered by any other “group health plan,” as described in section 4980B(g)(2) of the Code, or (B) the last day of the Severance Period (the “Coverage Period”), the Executive may elect continued health coverage under the Company’s health plan in which the Executive (and the Executive’s spouse and eligible dependents) participated at the Termination Date, as in effect from time to time, provided that the Executive shall be responsible for paying the full monthly cost of such coverage. The monthly cost of such coverage shall be the premium determined for purposes of continued coverage under section 4980B(f)(4) of the Code (“COBRA Premium”) in effect from time to time. During the Coverage Period, the Company shall reimburse the Executive for the COBRA Premium that the Executive pays for continued health coverage under the Company’s health plan, less the premium charge that is paid by the Company’s active employees for such coverage as in effect on the Termination Date. Such amounts shall be payable monthly over the Coverage Period and shall commence on the thirtieth (30th) day after the Executive’s Termination Date.  Each payment under this Section 4(b)(iv) shall be made on an after-tax basis, after taking into consideration the federal, state and local income and payroll taxes imposed on such payment.  The Company shall reimburse the Executive for COBRA Premiums pursuant to this Section 4(b)(iv) only for the portion of the Coverage Period during which the Executive continues coverage under the Company’s health plan. The Executive agrees to promptly notify the Company of the Executive’s coverage under an alternate health arrangement upon becoming covered by such alternative arrangement. The COBRA health care continuation coverage period under section 4980B of the Code shall run concurrently with the Coverage Period.
(v)The Executive shall be eligible for executive outplacement services, for up to eighteen (18) months after the Termination Date, not to exceed a maximum of twenty thousand dollars ($20,000) in cost. The Company will pay the cost of these services directly to the outplacement provider.  
(vi)Notwithstanding the foregoing, all payments and benefits described in this Section 4(b) shall be conditioned on the Executive’s executing and not revoking a written release, substantially in the form attached as Exhibit A (the “Release”), of any and all claims against the Company and all related parties (other than claims based upon any entitlements under the terms of this Agreement or accrued benefits under any plans or programs of the Company under which the Executive has accrued and is due a benefit).
(c)Upon any Termination of Employment, the Company shall pay any accrued but unpaid salary through the Termination Date and any benefits accrued and due under any applicable benefit plans and programs of the Company.
5.Enforcement.  If the Company fails to perform under this Agreement, the Company shall pay the Executive on demand the amount necessary to reimburse the Executive in full for all expenses (including attorney’s fees and legal expenses) incurred by the Executive in enforcing the obligations of the Company under this Agreement, but only with respect to claims as to which the Executive prevails in material respects.
6.No Mitigation. The Executive shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise. Except as provided in Section 4(b)(iv), the amount of any payment or benefit provided for herein shall not be reduced by any compensation earned by other employment or otherwise.
7.Non-Exclusivity of Rights; Other Severance Plans. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by the Company or any of its subsidiaries or Affiliates and for which the Executive may qualify; provided, however, that with respect to a Qualifying Termination, the Executive hereby waives the Executive’s right to receive any payments under any severance pay plan or program applicable to other employees of the Company or its Affiliates, and agrees to accept the payments provided in Section 4 hereof, in lieu of any other severance pay plan or program. 
8.No Set-Off.  Except as provided in Section 9(h) and Section 20 below, the Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Executive or others.  

		
	9.
	Restrictive Covenants.

(a)The Executive acknowledges and agrees that, during the Executive’s employment with the Company or its Affiliates, and for the eighteen (18) month period following the Executive’s Termination of Employment for any reason (the “Restricted Period”), the Executive will not, without the Company’s express written consent, engage (directly or indirectly) in any employment or business activity whose primary business involves or is related to providing (i) mortgage insurance, financial guaranty insurance, mortgage outsourcing services (including loan review and/or due diligence, surveillance, REO/Short Sale services, and REO component services) within the United States, or (ii) outsourced mortgage services, including due diligence, asset management, portfolio assessment and evaluation or consulting, in the United Kingdom and other European locations.  The Executive further agrees that, given the nature of the business of the Company and its Affiliates, the geographic scope of this Section 9(a) is appropriate and reasonable.  
(b)For purposes of this Agreement, the Executive acknowledges and agrees that the terms “Confidential Information” and “Trade Secrets” shall mean information that the Company or any of its Affiliates owns or possesses, that the Company or its Affiliates have developed at significant expense and effort, that they use or that is potentially useful in the business of the Company or its Affiliates, that the Company or its Affiliates treat as proprietary, private or confidential, and that is not generally known to the public. The Executive further acknowledges that the Executive’s relationship with the Company and its Affiliates is one of confidence and trust such that the Executive has in the past been, and may in the future be, privy to Confidential Information and Trade Secrets of the Company or any of its Affiliates.
(c)The Executive covenants and agrees that during the term of the Executive’s employment by the Company or its Affiliates, and at all times thereafter, the Executive shall keep all Confidential Information and Trade Secrets strictly confidential and that the Executive shall safeguard the Confidential Information and Trade Secrets from exposure to, or appropriation by, unauthorized Persons, and that the Executive shall not, without the prior written consent of the Company, divulge, reveal, report, publish, transfer or use, for any purpose whatsoever, such Confidential Information and Trade Secrets. Notwithstanding the foregoing, this Section 9(c) shall not apply (i) when disclosure is required by law, legal process or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with actual or apparent jurisdiction to order the Executive to disclose or make accessible any information, (ii) when disclosure is required with respect to any litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement, or (iii) as to Confidential Information or Trade Secrets that become generally known to the public other than due to the Executive’s violation of Section 9(b) or Section 9(c). If Executive is required to provide or disclose information in accordance with subsection (i) or (ii) of this Section 9(c), Executive shall, within three (3) days of receiving notice of such requirement, notify the Company of such requirement and the terms of and circumstances surrounding such requirement.  Furthermore, the Executive shall cooperate with the Company in any attempts it may make in seeking a protective order or injunction with respect to the Confidential Information and/or Trade Secrets that are subject to the required disclosure.
(d)The Executive covenants and agrees that during the term of the Executive’s employment by the Company or its Affiliates and during the Restricted Period, the Executive shall not, directly or indirectly through others, (i) hire or attempt to hire any employee of the Company or any of its Affiliates, (ii) solicit or attempt to solicit any employee of the Company or its Affiliates to become an employee, consultant or independent contractor to, for or of any other person or business entity, or (iii) solicit or attempt to solicit any employee, or any consultant or independent contractor of the Company or any of its Affiliates to change or terminate his or her relationship with the Company or any of its Affiliates, unless in each case more than three (3) months shall have elapsed between the last day of such person’s employment or service with the Company or any of its Affiliates and the first date of such solicitation or hiring or attempt to solicit or hire. If any employee, consultant or independent contractor is hired or solicited by any entity that has hired or agreed to hire the Executive, such hiring or solicitation shall be conclusively presumed to be a violation of this Agreement; provided, however, that any hiring or solicitation pursuant to a general solicitation conducted by an entity that has hired or agreed to hire the Executive, or by a headhunter employed by such entity, which does not involve the Executive, shall not be a violation of this subsection (d).
(e)The Executive covenants and agrees that during the term of the Executive’s employment by the Company or its Affiliates and during the Restricted Period, the Executive shall not, either directly or indirectly through others:
(i)solicit, divert, appropriate or do business with, or attempt to solicit, divert, appropriate or do business with, any customer for whom the Company or any of its Affiliates provided goods or services within twelve (12) months prior to the Executive’s Termination Date or any actively sought prospective customer of the Company or any of its Affiliates for the purpose of providing such customer or actively sought prospective customer with services or products competitive with those offered by the Company or any of its Affiliates during the Executive’s employment with the Company or any of its Affiliates, or 
(ii)encourage any customer for whom the Company or any of its Affiliates provided goods or services within twelve (12) months prior to the Executive’s Termination Date to reduce the level or amount of business such customer conducts with the Company or any of its Affiliates.

(f)The Executive covenants and agrees that during Executive’s employment by the Company or its Affiliates and at all times thereafter, Executive will not willfully or knowingly, in any way, disparage the Company or any of its Affiliates, its principals, shareholders, officers, directors, employees or agents in any way relating to the Company or any of its Affiliates, including, but not limited to, its name, business reputation or business practices. The Company agrees that it will not, and will direct its senior executives and directors not to, willfully or knowingly disparage Executive in any way.  Notwithstanding the foregoing, nothing in this Section 9(f) shall prevent any person from (a) responding publicly by a truthful statement to incorrect, disparaging or derogatory public statements to the extent reasonably necessary to correct or refute such public statement, or (b) making any truthful statement to the extent (i) necessary with respect to any litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement, or (ii) required by law, legal process or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with actual or apparent jurisdiction to order such person to disclose or make accessible such information.
(g)The Executive acknowledges and agrees that the business of the Company and its Affiliates is highly competitive, that the Confidential Information and Trade Secrets have been developed by the Company at significant expense and effort, and that the restrictions contained in this Section 9 are reasonable and necessary to protect the legitimate business interests of the Company and its Affiliates.
(h)Because the Executive’s services are personal and unique and the Executive has had and will continue to have access to and has become and will continue to become acquainted with Confidential Information and Trade Secrets, the parties to this Agreement acknowledge and agree that any breach by the Executive of any of the covenants or agreements contained in Section 9 will result in irreparable injury to the Company or any of its Affiliates, as the case may be, for which money damages could not adequately compensate such entity. Therefore, the Company or any of its Affiliates shall have the right (in addition to any other rights and remedies which it may have at law or in equity) to seek to enforce Section 9 and any of its provisions by injunction, specific performance or other equitable relief, without bond and without prejudice to any other rights and remedies that the Company or any of its Affiliates may have for a breach, or threatened breach, of the restrictive covenants set forth in Section 9. The Executive agrees that in any action in which the Company or any of its Affiliates seeks injunction, specific performance or other equitable relief, the Executive will not assert or contend that any of the provisions of Section 9 are unreasonable or otherwise unenforceable. The Executive irrevocably and unconditionally (a) agrees that any legal proceeding arising out of this paragraph may be brought in the United States District Court for the Eastern District of Pennsylvania, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in Philadelphia County, Pennsylvania, (b) consents to the non-exclusive jurisdiction of such court in any such proceeding, and (c) waives any objection to the laying of venue of any such proceeding in any such court. The Executive also irrevocably and unconditionally consents to the service of any process, pleadings, notices or other papers.
(i)If any portion of the covenants or agreements contained in this Section 9, or the application hereof, is construed to be invalid or unenforceable, the other portions of such covenants or agreements or the application thereof shall not be affected and shall be given full force and effect without regard to the invalid or unenforceable portions to the fullest extent possible. If any covenant or agreement in this Section 9 is held to be unenforceable because of the duration thereof or the scope thereof, then the court making such determination shall have the power to reduce the duration and limit the scope thereof, and the covenant or agreement shall then be enforceable in its reduced form. The covenants and agreements contained in this Section 9 shall survive the termination of this Agreement. The covenants and agreements contained in this Section 9 are in addition to any covenants and agreements to which Executive may be bound as provided under the Purchase Agreement.
		
	10.
	Taxes. All payments under this Agreement shall be subject to applicable tax withholding.

		
	11.
	Reduction of Payment Amount. 

(a) Notwithstanding any other provisions of this Agreement to the contrary, in the event that it shall be determined that any payment or distribution in the nature of compensation (within the meaning of section 280G(b)(2) of the Code) to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Payments”), would constitute an “excess parachute payment” within the meaning of section 280G of the Code, the Company shall reduce (but not below zero) the aggregate present value of the Payments under the Agreement to the Reduced Amount (as defined below), if reducing the Payments under this Agreement will provide the Executive with a greater net after-tax amount than would be the case if no reduction was made. The Payments shall be reduced as described in the preceding sentence only if (A) the net amount of the Payments, as so reduced (and after subtracting the net amount of federal, state and local income and payroll taxes on the reduced Payments), is greater than or equal to (B) the net amount of the Payments without such reduction (but after subtracting the net amount of federal, state and local income and payroll taxes on the Payments and the amount of Excise Tax (as defined below) to which the Employee would be subject with respect to the unreduced Payments). Only amounts payable under this Agreement shall be reduced pursuant to this subsection (a). The “Reduced Amount” shall be an amount expressed in present value that  maximizes the aggregate present value of Payments under this Agreement without causing any Payment under this Agreement to be subject to the Excise Tax, determined in accordance with section 280G(d)(4) of the Code. The term “Excise Tax” means the excise tax imposed under section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.  
(b)All determinations to be made under this Section 11 shall be made by an independent registered public accounting firm or consulting firm selected by the Company immediately prior to a change in control, which shall provide its 

determinations and any supporting calculations both to the Company and the Executive within ten (10) days prior to the change in control. Any such determination by such firm shall be binding upon the Company and the Executive. All of the fees and expenses of the accounting or consulting firm in performing the determinations referred to in this Section shall be borne solely by the Company.  
12.Death. In the event the Executive dies after a Qualifying Termination occurs, (a) any payments due to the Executive under this Agreement and not paid prior to the Executive’s death shall be made to the personal representative of the Executive’s estate and (b) the Executive’s spouse and dependents then covered under the health plan described in Section 4(b)(iv) shall be eligible for continued coverage in accordance with Section 4(b)(iv).
13.Successors. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of the Executive hereunder shall not be assignable in whole or in part by the Executive or the Company. The Company shall require any successor or successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to the Executive, to acknowledge expressly that this Agreement is binding upon and enforceable against the Company in accordance with the terms hereof, and to become jointly and severally obligated with the Company to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession or successions had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement. As used in this Agreement, the Company shall mean the Company as hereinbefore defined and any successor or successors to its business or assets, jointly and severally.
14.Notice. All notices and other communications required or permitted hereunder or necessary or convenient herewith shall be in writing and shall be delivered personally or mailed by registered or certified mail, return receipt requested, or by overnight express courier service, or by electronic delivery, delivery receipt requested, as follows:
If to the Company, to:

Edward J. Hoffman
1601 Market Street
Philadelphia, PA  19103
Attention:  Corporate Secretary

If to the Executive, to the most current address on file with the Company

or to such other names or addresses as the Company or the Executive, as the case may be, shall designate by notice to the other party hereto in the manner specified in this Section 14. Any such notice shall be deemed delivered and effective when received in the case of personal or electronic delivery; five days after deposit, postage prepaid, with the U.S. Postal Service in the case of registered or certified mail; or on the next business day in the case of an overnight express courier service.
15.Amendment.  This Agreement cannot be changed, modified, extended or terminated except upon written amendment executed by the Executive and the Company. 
16.No Employment Rights.  Nothing in this Agreement shall be construed as giving the Executive any right to be retained in the employ of the Company or its Affiliates.
17.Severability. If any provision of this Agreement or application thereof to anyone or under any circumstances shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions or applications of this Agreement which can be given effect without the invalid or unenforceable provision or application.
18.Survival.  The respective rights and obligations of the parties hereunder shall survive the termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.
19.Remedies Cumulative; No Waiver. No right conferred upon the Executive by this Agreement is intended to be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and shall be in addition to any other right or remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by the Executive in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof, except as provided in Section 2(e) with respect to Good Reason.
20.Entire Agreement. This Agreement and the Letter Agreement will supersede any and all prior employment and compensation agreements or arrangements between the Executive and the Company or its Affiliates, including the Employment Agreement with Clayton Holdings LLC dated as of October 20, 2008, as amended and restated December 31, 2012, and as further amended March __, 2014; provided, that, nothing herein shall be deemed to waive Executive’s rights to any payments with respect to Executive’s Class A or Class B Units pursuant to the Purchase Agreement, including but not limited to any payments that may be due to Executive as a result of the release of any escrow amount, and in the case of any indemnity obligation of the Executive’s that is not fulfilled via the escrow pursuant to the Purchase Agreement, the Company shall have the right to offset the overpayment from any compensation otherwise due to Executive.

21.Indemnification. As to any matter occurring or arising during the Executive’s employment with the Company or its Affiliates, the Company hereby covenants and agrees to indemnify the Executive and hold him harmless fully, completely, and absolutely against and in respect to any and all actions, suits, proceedings, claims, demands, judgments, costs, reasonable expenses (including reasonable attorney’s fees), losses and damages resulting from his good faith performance of his duties and obligations as an employee, officer or director of the Company or any of its Affiliates to the extent provided by the bylaws of the Company and its Affiliates; provided, however, that this indemnity shall not apply with respect to any breach by the Executive of the terms of this Agreement.
		
	22.
	Section 409A.

(a)The Agreement is intended to comply with the requirements of Section 409A of the Code (“Section 409A”) or an exemption from Section 409A, and shall in all respects be administered in accordance with Section 409A. Any payments that qualify for the “short-term deferral” exception shall be paid under such exception. Notwithstanding anything in the Agreement to the contrary, payments upon termination of employment may only be made upon a Section 409A “separation from service.” For purposes of Section 409A, the right to a series of payments under the Agreement shall be treated as a right to a series of separate payments. In no event may the Executive, directly or indirectly designate the calendar year of payment. In no event shall the timing of the Executive’s execution of the Release, directly or indirectly, result in the Executive designating the calendar year of payment. All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A.
(b)Notwithstanding anything in the Agreement to the contrary, if required by Section 409A, any amount that is considered “deferred compensation” under this Agreement and that is required to be postponed for a period of six months after separation from service pursuant to Section 409A shall be postponed as required by Section 409A. The accumulated postponed amount shall be paid in a lump sum payment within ten (10) days after the end of the six-month period. If the Executive dies during the postponement period prior to the payment of the postponed amount, the amounts withheld on account of Section 409A, shall be paid to the personal representative of the Executive’s estate within sixty (60) days after the date of Executive’s death.
23.Miscellaneous. All section headings are for convenience only. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.
24.Applicable Law. This Agreement shall be governed, construed, and interpreted under the laws of the Commonwealth of Pennsylvania without giving effect to any conflict of laws provisions.  In addition, the Agreement shall be subject to any required approvals by any governmental or regulatory agencies. Notwithstanding anything in the Agreement to the contrary, the Agreement shall be subject to all applicable laws, including any laws, regulations, restrictions or governmental guidance that becomes applicable in the event of the Company’s participation in any governmental programs, and the Board reserves the right to modify this Agreement as necessary to conform to any restrictions imposed by any such laws, regulations, restrictions or governmental guidance. As a condition of the Agreement, the Executive agrees to any such modifications that may be imposed by the Board and the Executive agrees to sign such waivers or acknowledgments as the Board may deem necessary or appropriate with respect to such modifications.

[Signature Page Follows]    

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written.
RADIAN GROUP INC.

By:  /s/ Anita Scott
Anita Scott, SVP, Chief Human Resources Officer

cc:  S. A. Ibrahim

EXECUTIVE 

By:    /s/ Paul T. Bossidy 5/1/2014
Print Name: Paul T. Bossidy

EXHIBIT A
FORM OF RELEASE
In further consideration of compensation and benefits provided to Paul T. Bossidy (“Executive”) pursuant to the Agreement between Executive and Radian Group Inc. (the “Company”) entered into as of the _____ day of May, 2014 (the “Agreement”), Executive hereby executes this Release to the Company (herein the “Release”) and does hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company and each of its past or present subsidiaries and Affiliates, its and their past or present officers, directors, stockholders, employees and agents, their respective successors and assigns, heirs, executors and administrators, the pension and employee benefit plans of the Company, or of its past or present subsidiaries or Affiliates, and the past or present trustees, administrators, agents, or employees of the pension and employee benefit plans (hereinafter collectively included within the term the “Released Parties”), acting in any capacity whatsoever, of and from any and all manner of actions and causes of actions, suits, debts, claims and demands whatsoever in law or in equity, whether known or unknown, which Executive ever had, now have, or hereafter may have, or which Executive’s heirs, executors or administrators hereafter may have against the Released Parties, by reason of any matter, cause or thing whatsoever from the beginning of Executive’s employment with the Company to the date of this Release and particularly, but without limitation of the foregoing general terms, any claims arising from or relating in any way to Executive’s employment relationship and the termination of Executive’s employment relationship with the Company and its Affiliates, including but not limited to, any claims which have been asserted, could have been asserted, or could be asserted now or in the future under any federal, state or local laws, including any claims under the Pennsylvania Human Relations Act, [insert other applicable state law] the Rehabilitation Act of 1973, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the WARN Act, the Family and Medical Leave Act, the Americans with Disabilities Act, and the Employee Retirement Income Security Act, all as amended, and any other federal, state or local statutes or common law under which Executive can waive Executive’s rights, any contracts between the Released Parties and Executive, and all claims for counsel fees and costs.
Notwithstanding anything in this Agreement to the contrary, Executive does not waive (i) any entitlements under the terms of the Agreement, (ii) Executive’s existing right to receive accrued benefits under any plans or programs of the Company in which Executive participated and under which Executive has accrued and become or may become entitled to benefits (other than under any Company separation or severance plan or programs), (iii) any claims that, by law, may not be waived and (iv) any right to indemnification under the bylaws of the Company or its Affiliates, or under any directors and officers or other applicable insurance policy, with respect to Executive’s performance of his duties and obligations as an employee, officer or director of the Company or any of its Affiliates. 
I hereby execute this Release as of ___________.
                            
Paul T. Bossidy

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