Document:

Radian Group Inc. Performance Share Plan

 EXHIBIT 10.2 
  
 RADIAN GROUP INC. 
  
 AMENDED AND RESTATED PERFORMANCE SHARE PLAN 
  

	1.	Purpose. The purpose of the Radian Group Inc. Performance Share Plan (the “Plan”) is to enhance the long-term stockholder value of Radian Group Inc. (the
“Company”) by reinforcing the incentives of the Company’s key employees to achieve the Company’s long-term performance goals; to link a significant portion of a participant’s compensation to the achievement by the Company of
such performance goals and to the value of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”); and to attract and motivate key employees and to encourage their continued employment on a competitive basis. The
purposes of the Plan are to be achieved by the grant of Performance Share Awards, as defined below. 

  

	2.	Eligibility and Participation. Key employees of the Company who, through their position or performance, can have a significant, positive impact on the Company’s
financial results, shall be eligible to participate in the Plan. The Compensation and Human Resources Committee of the Company’s Board of Directors (the “Committee”) shall select the recipients of Performance Share Awards (the
“Participants”). Newly-hired and newly-promoted employees may be selected as Participants subject to the provisions of Section 3(d)(ii), if applicable. 

  

	3.	Performance Share Awards. 

  

	 	(a)	Performance Share Award Defined. A “Performance Share Award” is a right to receive shares of Common Stock, contingent on the achievement of certain performance
goals of the Company specified by the Committee. A Performance Share Award shall be subject to such conditions, restrictions and contingencies as the Committee shall determine. 

  

	 	(b)	Combined Award Under Stock Plan. Each Performance Share Award shall be deemed to be a combined award under the Plan and under the Company’s Equity Compensation Plan, as
amended, or under any successor to such plan (the “Stock Plan”). Any shares of Common Stock to be issued pursuant to a Performance Share Award shall be issued under and pursuant to the Stock Plan, and shall be subject to the terms and
conditions of the Stock Plan and of any grant agreement issued thereunder. 

  

	 	(c)	Award Term. Performance Share Awards will be measured over such period of time as shall be established by the Committee (the “Award Term”). Unless the Committee
determines otherwise, the Award Term shall be a period of three consecutive fiscal years of the Company. Award Terms may be of varying and overlapping durations. Performance Share Awards shall be subject to forfeiture until the conclusion of the
Award Term except as may otherwise be provided in Section 3(f) below. 

	 	(d)	Section 162(m) Conditions. Performance Share Awards may be designated as “performance-based compensation” as that term is used in Section 162(m) of the Internal
Revenue Code of 1986, as amended (the “Code”). 

  

	 	(i)	Performance Goals. The performance goal criteria (“Performance Goals”) that may be used by the Committee in granting Performance Share Awards shall include
one or more of the following, as selected by the Committee: 

  

	 	•	 	growth in earnings per share; 

  

	 	•	 	growth in adjusted book value; and 

  

	 	•	 	return on equity. 

  
 The Performance Goals may be measured with respect to the Company alone on an absolute basis, on a relative or comparative basis with such peer companies
or index as the Committee may select, or in such combination thereof as may be determined by the Committee. Performance Goals may be based on the performance of the Company as a whole, or on the performance of a specified business unit or
subsidiary. Performance Goals may be established on a cumulative basis, in the alternative, or in the form of a matrix combining various Performance Goals and weighting them in any manner that the Committee may determine. 
  

	 	(ii)	Establishment of Performance Goals. Performance Share Awards designated as “performance-based compensation” for purposes of Section 162(m) of the Code shall
be granted, and Performance Goals shall be established, by the Committee in writing not later than 90 days after the commencement of the period of service to which the Performance Goals relate, or by such other date as may be required under Section
162(m) of the Code, provided that the outcome is substantially uncertain at the time the Committee establishes the Performance Goals. Following the establishment of the Performance Goals, the Committee shall advise each Participant, through the
issuance of a “Grant Letter” under the Stock Plan, as to the target award and specific Performance Goals applicable to his or her Performance Share Award, and the method or formula for determining the payouts correlating to a range of
performance results over the Award Term. 

  

	 	(iii)	Section162(m) Maximum Award Limit. With respect to a Performance Share Award that is designated as “performance-based compensation” for purposes of Section
162(m) of the Code, the maximum number of shares of Common Stock that may be issued under the award shall be set at the time the Committee grants the award and establishes Performance Goals under the award. Notwithstanding any other provision of
this Plan, the maximum payout under any Performance Share Award may not exceed 250,000 shares of Common Stock as of the end of the Award Term, subject to adjustment as provided in Section 4 and under the Stock Plan.

  

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	 	(iv)	Certification by Committee. Before any payment in shares of Common Stock is made under a Performance Share Award to any Participant who is a person referred to in
Section 162(m) of the Code, the Committee must certify in writing that the Performance Goals and any other material terms established with respect to such Performance Share Award have been achieved. To the extent necessary with respect to any fiscal
year or Award Term, in order to avoid any undue windfall or hardship due to external causes, the Committee may make the determination as to whether a specific Performance Goal has been achieved without regard to the effect of any change in
accounting standards, any acquisition or disposition by the Company not planned for at the time the Performance Goals were established or any other extraordinary, unusual or non-recurring event or item that would otherwise impact the Company’s
reported financial performance. With respect to any Participant who is a person referred to in Section 162(m) of the Code, the Committee shall have the discretion to decrease an award payout under a Performance Share Award for circumstances that the
Committee deems warranted, but may not under any circumstances increase such amount. 

  

	 	(e)	Settlement of Awards. Upon the conclusion of the Award Term of a Performance Share Award, the Company’s determination of the amount of the payout, if any, to which the
Participant is entitled, and the certification by the Committee, if applicable, as provided in Section 3(d)(iv) above, the Participant shall receive payout of the Performance Share Award in shares of Common Stock issued under and pursuant to Section
9 of the Stock Plan. Cash shall be delivered in lieu of any fractional share. 

  

	 	(f)	Termination of Employment, Change of Control and Other Circumstances. Notwithstanding anything to the contrary in the Stock Plan: 

  

	 	(i)	Death or Disability. If a Participant’s employment with the Company terminates as a result of such Participant’s death or disability, any outstanding
Performance Share Awards shall remain in force, and such Participant (or his or her estate, representatives, heirs or beneficiaries, as applicable, in the case of death) shall be entitled to any payout that thereafter becomes due under such
outstanding Performance Share Awards, at the same time, and to the same extent, as though such Participant had remained employed by the Company through the conclusion of the Award Term. For purposes of the Plan, “disability” shall mean a
physical or mental impairment of sufficient severity that the Participant is both eligible for and in receipt of benefits under the applicable long-term disability program maintained by the Company. 

  

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	 	(ii)	Retirement. If a Plan Participant’s employment with the Company terminates by reason of such Participant’s retirement prior to the end of an Award Term, but
after the conclusion of not less than 33% of the Award Term, of any outstanding Performance Share Award, then such Performance Share Award shall remain in force, and such Participant shall be entitled to any payout that thereafter becomes due under
such Performance Share Award, at the same time, and to the same extent, as though such Participant had remained employed by the Company throughout the Award Term. For purposes of the Plan, “retirement” shall mean Participant’s
retirement as defined under the applicable pension plan maintained by the Company. 

  

	 	(iii)	Other Termination. In the event that a Participant’s employment with the Company terminates other than by reason of death, disability or retirement as provided in
Sections 3(f)(i) and (ii) above, then all outstanding Performance Share Awards in such Participant’s name as to which the Award Term has not yet expired shall be deemed forfeited, shall automatically be canceled and shall have no further force
or effect. 

  

	 	(iv)	Change of Control. Notwithstanding the provisions of Sections 3(c) and (d), in the event of a “Change of Control” of the Company as defined in Section 11 of
the Stock Plan, or any successor definition, prior to the end of an Award Term, but after the conclusion of not less than 33% of the Award Term, of any outstanding Performance Share Award, then the Performance Goals applicable to such Performance
Share Award shall be deemed to have been satisfied as of the date of such Change in Control at 100% of the target level, and such Participant shall be entitled to the corresponding payment under such Performance Share Award as of such date.

  

	 	(g)	Dividends and Voting. A Participant shall have no rights as a stockholder with respect to Performance Share Awards, including with respect to dividends and voting, unless and
until shares of Common Stock are issued in settlement of the award. 

  

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	 	(h)	Non-transferability. Neither Performance Share Awards, nor any interest therein, nor any shares of Common Stock to be issued thereunder, may be anticipated, alienated,
encumbered, sold, pledged, assigned, transferred or subjected to any charge or legal process, other than by will or the laws of descent and distribution, so long as the shares of Common Stock have not been distributed in accordance with the Plan and
the Stock Plan, and any such sale, pledge, assignment or other attempted transfer shall be null and void. A Participant may receive payment under a Performance Share Award only while an employee of the Company and only if continuously employed from
the date the award was granted, except as may otherwise be provided in Section 3(f) above.  

  

	4.	Adjustment of Shares Subject to Awards. In the event of a corporate transaction involving the Company, the Common Stock or the Company’s corporate or capital structure,
including but not limited to any recapitalization, reorganization, merger, consolidation, stock dividend, stock split, combination or exchange of shares, or any other change in capital structure made without receipt of consideration, the benefits or
potential benefits of the Performance Share Awards shall be preserved by appropriate adjustment of such awards by the Committee pursuant to Section 3(b) of the Stock Plan, or any successor provision. 

  

	5.	Administration. The Plan shall be administered by the Committee. The Committee shall have the authority to administer the Plan; establish policies under the Plan; amend the
Plan, subject to the provisions of Section 8; interpret provisions of the Plan; select Participants; establish Performance Goals; make Performance Share Awards; or terminate the Plan, in its sole discretion. The Committee may delegate administrative
duties and all decisions not required to be exercised by it under Section 162(m) of the Code or Section 16 of the Exchange Act, as it solely determines, including to Company officers. All decisions of the Committee shall be final and binding upon
all parties including the Company, its stockholders and Participants. 

  

	6.	Tax Withholding. The Company shall have the right to deduct from any settlement made under the Plan or to require the Participant to pay the amount of any federal, state or
local taxes of any kind required by law to be withheld with respect to the grant, vesting, payment or settlement of an award under this Plan, or to take such other action as may be necessary in the opinion of the Company to satisfy all obligations
for the payment of such taxes. If Common Stock is withheld or surrendered to satisfy tax withholding, such stock shall be valued at its fair market value as of the date it is withheld or surrendered. The Company may also deduct from any award
settlement any other amounts due the Company by the Participant. 

  

	7.	Governing Law. The Plan, agreements entered into under the Plan and Performance Share Awards shall be construed, administered and governed in all respects under and by the
applicable laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation to the substantive law of another jurisdiction. 

  

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	8.	Plan Amendment and Termination. The Committee may, in its sole discretion, amend, suspend or terminate the Plan at any time, with or without advance notice to Participants,
provided that no amendment to the Plan shall be effective that would increase the maximum award that may be granted under Section 3(d)(iii) to a Participant who is a person referred to in Section 162(m) of the Code; that would change the Performance
Goal criteria applicable to a Participant who is a person referred to in Section 162(m) of the Code for payment of awards as set forth in Section 3(d)(i); or that would modify the requirements as to eligibility for participation under Section 2,
unless the stockholders of the Company shall have approved such change in accordance with the requirements of Section 162(m) of the Code. No amendment, modification or termination of the Plan may adversely affect in a material manner any right of
any Participant with respect to any Performance Share Award theretofore granted without such participant’s written consent. 

  

	9.	General Provisions. 

  

	 	(a)	Certain Definitions. As used in this Plan, the term “Company” refers to Radian Group Inc. and its consolidated subsidiaries as a whole. 

  

	 	(b)	No Right to Awards or Continued Employment. Neither the establishment of the Plan nor the provision for or payment of any amounts hereunder nor any action of the Company, the
Board of Directors of the Company or the Committee in respect of the Plan shall be held or construed to confer upon any person any legal right to receive, or any interest in, an award or any other benefit under the Plan, or any legal right to
continued employment with the Company. 

  

	 	(c)	No Funding of Plan. The Company shall not be required to fund or otherwise segregate any Common Stock or any other assets which may at any time be delivered to Participants
under the Plan. The Plan shall constitute an “unfunded” plan of the Company. The Company shall not, by any provisions of the Plan, be deemed to be a trustee of any property, and any rights of any Participant or former Participant shall be
no greater than those of a general unsecured creditor or shareholder of the Company, as the case may be. 

  

	 	(d)	Non-Exclusivity. The Plan does not limit the authority of the Company, the Board of Directors of the Company or the Committee to grant awards or authorize any other
compensation to any person under any other plan or program, including, without limitation, the issuance of stock options or any other awards under the Stock Plan. 

  

	 	(e)	Severability. If any provision of the Plan is held unenforceable, the remainder of the Plan shall continue in full force and effect and shall be applied as though the
unenforceable provision were not contained in the Plan. 

  

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	10.	Effective Date of the Plan and Amendments; Term. The Plan first became effective upon its adoption by the Board of Directors of the Company on February 8, 2005, for
Award Terms commencing on January 1, 2005. This amendment and restatement of the Plan became effective upon its adoption by the Board of Directors of the Company effective March 30, 2005, and applies to all awards made under the Plan before and
after such date. Any further amendment to the Plan shall be effective on the date established by the Committee, subject to stockholder approval, if required under the provisions of Section 8. The Plan shall expire on December 31, 2009, unless sooner
terminated or extended pursuant to the provisions hereof; provided, however, that such expiration shall not affect the administration of any Performance Share Awards then outstanding. 

  
 * * * 
  

 7Form of Performance Share Award Agreement

 EXHIBIT 10.3 
  
 RADIAN GROUP INC. 
  
 FORM OF PERFORMANCE SHARE AWARD AGREEMENT 
  
 This Agreement is entered into as of
[                    , 20    ,] by and between
[                    ] (“Executive” or “you”) and Radian Group Inc., a Delaware corporation (“Radian” or
“we”), to set forth the terms and conditions of a Performance Share Award granted to you by the Compensation and Human Resources Committee of Radian’s Board of Directors (the “Committee”) pursuant to the Radian Group Inc.
Performance Share Plan (the “Plan”). Capitalized terms used herein and not defined shall have the meanings given to them under the Plan. 
  
 1. Performance Share Award. Radian hereby grants to you a Performance Share Award under the Plan, for a performance period to be measured over the
following three (3) Radian fiscal years: 2005, 2006 and 2007 (the “Award Term”), subject to the terms and conditions of this Agreement and of the Plan and to your consent to those terms and conditions. This Agreement shall also constitute
a grant of a Performance Share Award under and pursuant to the Radian Group Inc. Equity Compensation Plan, and shall be subject to the terms thereof. 
  
 a. Nature of Award. A Performance Share Award is a right to receive shares of Radian Common Stock, par value $0.001 per
share (the “Common Stock,” or a “Payout”), contingent on the achievement of the Performance Goals specified herein. 
  
 b. Performance Goals and Target Levels. Exhibit A which is attached hereto and forms a part hereof sets forth, among
other information determined by the Committee: 
  
 (i) your applicable Target Performance Share Award (your “Target Payout”); 
  
 (ii) a series of matrices for determining, with respect to each of three (3) specified performance criteria, your potential Payout as a
percentage of your Target Payout, under specified combinations of absolute and relative financial performance by Radian (the “Performance Goals”); and 
  
 (iii) the method of calculating your actual Payout, if any, based on the relative weights assigned the
Performance Goals by the Committee. 
  
 c.
Form of Payout. Your Payout, if any, will be in the form of shares of Common Stock. 
  
 d. Stockholder Approval. This Performance Share Award is subject to and contingent upon approval by Radian’s
stockholders of the Plan or the material terms thereof at Radian’s 2005 Annual Meeting of Stockholders. 

 2. Important Considerations Regarding Potential Payout. If the Performance Goals are achieved at
100% of target levels, you will receive your Target Payout. If the Performance Goals are achieved at levels above or below the target levels, the Payout you will receive will be increased or reduced, including to zero, in accordance with Exhibit
A and as provided in the Plan. You may not receive a greater number of shares of Common Stock than the Maximum Potential Payout set forth on Exhibit A. 
  
 The Target Payout referred to in this Agreement is used solely as a component of a formula to calculate the actual Payout, if any, in
accordance with this Agreement, and does not create any separate right or entitlement. THE ACTUAL PAYOUT, IF ANY, WILL BE CALCULATED FOLLOWING THE FISCAL YEAR ENDING DECEMBER 31, 2007, BASED ON THE METRICS AND METHODOLOGIES DESCRIBED IN EXHIBIT
A, AND BASED ON ANY ADJUSTMENTS PERMITTED UNDER THE PLAN OR THIS AGREEMENT. 
  
 This Agreement represents Radian’s unfunded and unsecured promise to issue Common Stock at a future date, subject to the terms of this Agreement and the Plan. Executive has no rights under this Agreement other than the rights of a
general unsecured creditor. 
  
 The metrics and methodologies set forth in
Exhibit A measure Radian’s performance on an absolute basis and relative to its peers. Such performance will be measured using the methods and procedures that Radian uses for its business purposes, and these methods and procedures may
change without notice or consent. 
  
 If there is a significant change in
accounting rules or in Radian’s business or business strategy (for example, an extraordinary event, acquisition or divestiture), as the Committee determines in its sole discretion, the Committee may adjust the calculation of the Performance
Goals in such manner as they consider appropriate in light of the change. 
  
 The
final determination of the Payout to which the Executive is entitled will be made by the Committee in its sole discretion. Compensation attributable to this Agreement is intended to constitute qualified “performance-based compensation”
under Section 162(m) of the Code and the regulations thereunder. This Agreement shall be construed and administered by the Committee in a manner consistent with this intent. 
  
 3. Termination and Change of Control. 
  
 a. Termination of Relationship with Company. If your employment with Radian terminates during
the Award Term then, depending upon the reason for such termination, this Performance Share Award may continue in force or may terminate, as provided in the applicable subsection of Section 3(f) of the Plan. 
  
 b. Change of Control. Upon a Change of Control
of Radian, this Performance Share Award shall be treated in accordance with Section 3(f)(iv) of the Plan. 
  
 4. Dividends and Voting. You will have no rights as a stockholder with respect to Performance Share Awards, including with respect to dividends and
voting, unless and until shares of Common Stock are issued in settlement of this award. No adjustments will be made for dividends or other rights for which the record date is prior to issuance of the Common Stock. 
  

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 5. Non-transferability. Neither the Performance Share Award nor any interest in the award or this
Agreement may be anticipated, alienated, encumbered, sold, pledged, assigned, transferred or subjected to any charge or legal process, other than by will or the laws of descent and distribution, so long as shares of Common Stock have not been
distributed in accordance with the Plan, and any such sale, pledge, assignment or other attempted transfer shall be null and void. 
  
 6. Successors and Heirs. This Agreement shall be binding upon and inure to the benefit of Radian and its successors and assigns, and upon any
person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of Radian’s assets and business. In the event of your death, any Payout to which you may become entitled will be delivered to your
estate, personal representative, heirs or beneficiaries in accordance with the terms of the Plan. 
  
 7. Governing Law. This Performance Share Award Agreement and the Plan will be construed, administered and governed in all respects under and by the
applicable laws of the State of Delaware. 
  
 8. Tax
Withholding. Radian has the right to deduct from any award payment made under this Agreement or to require you to pay the amount of any federal, state or local taxes of any kind required by law to be withheld with respect to the grant, vesting,
payment or settlement of an award under this Agreement, or to take such other action as may be necessary in our opinion to satisfy all obligations for the payment of such taxes. If Common Stock is withheld or surrendered to satisfy tax withholding,
such stock will be valued at fair market value as of the date such Common Stock is withheld or surrendered. Radian may also deduct from any award payment any other amounts due by you to Radian. 
  
 9. Miscellaneous. Notwithstanding anything in this Agreement to the
contrary, the terms of this Agreement shall be subject to the terms of the Plan. In accordance with the Plan, all decisions of the Committee shall be final and binding upon you and Radian. 
  
 [Signatures appear on following page.] 
  

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 IN WITNESS WHEREOF, this Performance Share Award Agreement has been executed and delivered by
Radian on the terms and conditions set forth above. 
  

			
	RADIAN GROUP INC.
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  
 Acknowledgement by Executive 
  
 I hereby
agree to the terms and conditions of this Performance Share Award Agreement as a condition to the grant made to me. 
  

	
	  

	 Signature of Executive

	
	 Name:

  

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 Exhibit A 
  
 TARGET LEVELS AND PERFORMANCE GOALS 
  
 Name of Executive :
[                                        
                                        
            ] 
  
 Award Term: Fiscal Years 2005, 2006 and 2007 
  
 Target Performance Share Award (in Shares): [                     shares] 
  
 Maximum Potential Payout (in Shares):
[                     shares] 
  
 Performance Matrices: 
  

	 	1.	Growth in Earnings per Share/Payout as a Percentage of Target 

  

											
	 [Cumulative/Annual]
   Growth Rate Target

	  	Relative Performance (Rank among Peers)

	  	9th/10th

	  	7th/8th

	  	5th/6th

	  	3rd/4th

	  	1st/2nd

	             %
	  	 	  	 	  	 	  	 	  	 
	             %
	  	 	  	 	  	 	  	 	  	 
	             %
	  	 	  	 	  	 	  	 	  	 
	             %
	  	 	  	 	  	 	  	 	  	 
	             %
	  	 	  	 	  	 	  	 	  	 

  

	 	2.	Growth in Adjusted Book Value/Payout as a Percentage of Target 

  

											
	 [Cumulative/Annual]
   Growth Rate Target

	  	Relative Performance (Rank among Peers)

	  	9th/10th

	  	7th/8th

	  	5th/6th

	  	3rd/4th

	  	1st/2nd

	             %
	  	 	  	 	  	 	  	 	  	 
	             %
	  	 	  	 	  	 	  	 	  	 
	             %
	  	 	  	 	  	 	  	 	  	 
	             %
	  	 	  	 	  	 	  	 	  	 
	             %
	  	 	  	 	  	 	  	 	  	 

  

	 	3.	Return on Equity/Payout As a Percentage of Target 

  

											
	 [Cumulative/Annual]
     R.O.E. Target

	  	Relative Performance (Rank among Peers)

	  	9th/10th

	  	7th/8th

	  	5th/6th

	  	3rd/4th

	  	1st/2nd

	             %
	  	 	  	 	  	 	  	 	  	 
	             %
	  	 	  	 	  	 	  	 	  	 
	             %
	  	 	  	 	  	 	  	 	  	 
	             %
	  	 	  	 	  	 	  	 	  	 
	             %
	  	 	  	 	  	 	  	 	  	 

  

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 Calculation of Payout: 
  

													
	 Performance Criteria

	  	 Payout As a Percentage of
 Target

	  	 	  	 Relative
 Weight

	 	 	 	  	 Weighted
 Payout As a
 Percentage of
 Target

	 
	 Growth in Earnings per Share . . .
	  	Percentage from Table 1	  	x	  	33	%	 	=	  	A	%
	 Growth in Adjusted Book Value . . .
	  	Percentage from Table 2	  	x	  	33	%	 	=	  	B	%
	 Return on Equity . . .
	  	Percentage from Table 3	  	x	  	33	%	 	=	  	C	%

  
 Add: A% + B% + C% = D%

  
 Multiply: Target No. of Shares x D% = No. of Shares for Payout

  
 Peer Group Companies (for Purposes of Relative Performance): 
  

			
	Ambac Financial	 	Old Republic International
	Assured Guaranty	 	PMI Group
	Genworth Financial	 	Triad Guaranty
	MBIA	 	XL Capital
	MGIC Investment	 	 

  

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