This excerpt taken from the RDN DEF 14A filed Apr 13, 2009.
Compensation Related Agreements
Employment Agreement with Mr. Ibrahim. On May 5, 2008, we entered into a new employment agreement with Mr. Ibrahim, providing for an employment term commencing on May 5, 2008 and ending on May 3, 2011. Mr. Ibrahims previous employment agreement expired on May 3, 2008. His new employment agreement differs from his previous employment agreement in that it: (1) limits the tax gross-up upon a change of control (as defined in his new agreement and as set forth following the footnotes to the tables below), (2) provides extended health coverage in the event of certain terminations of employment, (3) provides for full vesting of options and other equity grants and a continuation of options for the balance of the term in the event of certain terminations of employment, (4) updates compensation and benefit provisions, (5) makes changes to comply with section 409A of Code, and (6) makes other appropriate changes.
If a change of control occurs, the term of Mr. Ibrahims agreement will be automatically extended to the later of (1) two years from the date of the change of control or (2) the end of the then current term. Either party may terminate the employment agreement with appropriate notice, subject to the terms of the agreement.
Under the agreement, Mr. Ibrahim will continue to serve as the Chief Executive Officer of Radian and will receive an annual base salary of $800,000, which will be subject to annual adjustment by the independent members of our board of directors. His annual target short-term cash incentive award will be at least 1.75 times his annual base salary, and his target long-term equity incentive compensation for each year will be at least three times his annual base salary. Under the agreement, Mr. Ibrahim is to be nominated as a member of our board of directors during the term of the agreement.
If Mr. Ibrahims employment terminates on account of his retirement after five years of service with Radian, death or disability, if we terminate his employment without cause (as defined in the agreement and as set forth
following the footnotes to the tables below), or if he terminates employment for good reason (as defined in the agreement and as set forth following the footnotes to the tables below), we will permit Mr. Ibrahim and his wife to elect continued medical coverage under our group medical plan for a period of time (and subject to certain conditions) as set forth in the employment agreement and as discussed in footnote 8 to the tables below. As an alternative to continuing coverage under our group medical plan, we may provide coverage under a fully insured medical policy at our expense.
Pursuant to his employment agreement, Mr. Ibrahim will receive severance benefits if his employment is terminated by Radian without cause or if he resigns for good reason. If Mr. Ibrahims employment is terminated without cause or he resigns for good reason before a change of control, he will receive the following severance benefits: (1) two times his base salary (payable as follows: the maximum amount that may be paid under the separation pay exception of section 409A of the Code ($490,000 for 2009) to be paid in 12 equal monthly installments following Mr. Ibrahims termination, with the remainder to be paid in a lump sum between March 1st and 15th of the calendar year following his termination) and target annual bonus for the year of termination (payable in a lump sum between March 1st and 15th of the calendar year following Mr. Ibrahims termination), (2) a pro-rated target bonus for the year of termination (payable in a lump sum within 60 days of his termination date or, if Mr. Ibrahim previously made a deferral election with respect to his short-term incentive award, in accordance with the terms of his deferral election), (3) continued medical coverage as described above and in footnote 8 to the tables below, and (4) full vesting of equity awards as described in footnotes 5 and 6 to the tables below. If Mr. Ibrahims employment is terminated without cause or if he resigns for good reason on or after a change of control, the multiplier for (1) above increases to three times his base salary and target annual bonus and the full cash severance will be paid within 60 days of Mr. Ibrahims termination date. The severance benefits are conditioned on Mr. Ibrahim executing a release of claims against Radian and its affiliates.
If an excise tax under section 4999 of the Code will be triggered by any payments upon a change of control, and if the payments are at least 110% of the threshold amount that triggers the excise tax under section 4999 of the Code, we will pay a gross-up amount to Mr. Ibrahim so that the amount he retains after tax is equal to the after-tax amount he would have retained had no excise tax applied. If we do not pay the gross-up amount because the payments are below the threshold, we will reduce payments under Mr. Ibrahims employment agreement to the maximum amount that can be paid under sections 280G and 4999 of the Code without imposition of the excise tax, if the net after-tax amount that Mr. Ibrahim would receive after the reduction is equal to or greater than the net after-tax amount he would receive without the reduction.
Under his employment agreement, Mr. Ibrahim has agreed not to compete with us and not to solicit our employees or customers for a period of 12 months following termination of employment for any reason.
Change of Control Agreements. We have entered into change of control agreements with Mr. Quint and Ms. Bryce. The change of control agreements provide that if, within two years after a change of control of Radian (as defined in the agreements and as set forth following the footnotes to the tables below), the executives employment is terminated (a qualifying termination): (1) by us for any reason, other than (a) the executives continued illness, injury or incapacity for a period of twelve consecutive months or (b) for cause (as defined in the agreements and as set forth following the footnotes to the tables below); or (2) by the executive for good reason (as defined in the agreement and as set forth following the footnotes to the tables below), the executive would be entitled to a lump-sum cash payment (payable within 15 days of the executives termination) equal to two times the sum of (x) the executives then-current base salary and (y) for Ms. Bryce, her target bonus for the year in which her termination occurs, and for Mr. Quint, his maximum cash incentive award eligibility for the year in which his termination occurs. Following the initial term, each agreement automatically extends for successive one-year terms unless terminated by either party. Under Ms. Bryces change of control agreement, for a period of one year following her qualifying termination, Ms. Bryce may not, directly or indirectly, solicit our employees and is required to perform consulting services as may be requested by our Chief Executive Officer or our board of directors.
Severance Agreements. We entered into severance agreements with Mr. DelGatto and Mr. Theobald. These agreements provide that if the executives employment is terminated by us for any reason other than for cause (as defined in the agreements and as set forth following the footnotes to the tables below) at any time prior to December 31, 2010, the executive would be entitled to severance payments equal to: (1) 78 weeks of the executives base salary (payable in bi-weekly installments, beginning within 15 days after the executives termination); and (2) an amount equal to 150% of the executives short-term incentive target for the year in which termination occurs (payable in a single lump sum within 15 days after termination). To receive any payment of severance under these agreements, Mr. DelGatto and Mr. Theobald would be required to execute a general release of claims against us and our affiliates.
This excerpt taken from the RDN DEF 14A filed Apr 24, 2008.
Compensation Related Agreements
Employment Agreement with Mr. Ibrahim. On April 20, 2005, we entered into an employment agreement with Mr. Ibrahim under which Mr. Ibrahim agreed to serve as our Chief Executive Officer, effective May 4, 2005. The term of the employment agreement ends May 3, 2008, unless terminated earlier by either party. It is the intention of the independent directors and Mr. Ibrahim to enter into a new employment agreement prior to, or concurrent with, the expiration of Mr. Ibrahims current agreement on May 3, 2008. Mr. Ibrahim is entitled
to payments and benefits under the agreement upon his termination of employment or a change of control of Radian, as quantified in the first table below. Mr. Ibrahim also agreed not to compete with us or to solicit (1) our employees to leave Radian or (2) our customers to purchase competitive products or services during the term of the agreement and for twelve months following Mr. Ibrahims termination under the agreement for any reason. We have agreed to nominate Mr. Ibrahim to our board of directors during each year of the agreement.
Transition Agreement with Mr. Kasmar. As discussed above under Compensation Discussion and Analysis Named Executive Officers, on January 9, 2007, we entered into a Transition Agreement and General Release with Mr. Kasmar. Under this agreement, Mr. Kasmar has agreed to restrictions on competitive activities while receiving payments under the agreement, and to refrain from soliciting or hiring our employees for twelve months from his termination. The agreement also includes Mr. Kasmars release of Radian from any claims, known or unknown.
Transition Agreement with Mr. Casale. As discussed above under Compensation Discussion and Analysis Named Executive Officers, on December 11, 2007, we entered into a Transition Agreement and General Release with Mr. Casale. Under this agreement, for a period of six months following termination of his employment, Mr. Casale has agreed not to: (1) without our express written consent, be employed by, associated with or otherwise engaged with certain companies (specified in the agreement) whose primary businesses involve providing mortgage insurance or financial guaranty insurance; (2) directly or indirectly solicit any of our customers or prospective customers or those of our subsidiaries and affiliates; (3) directly or indirectly solicit or hire any of our employees or those of our subsidiaries and affiliates; or (4) without the prior written consent of our board of directors, directly or indirectly (a) acquire more than 5% of our outstanding voting securities, (b) make or participate in any solicitation of proxies to vote or consents with respect to the voting of our securities, (c) initiate or support any stockholder proposal with respect to Radian, (d) make a proposal or offer with respect to any extraordinary transaction involving us or our subsidiaries, (e) seek or propose to influence or control our management or policies or (f) negotiate or influence the terms and conditions of employment of our employees. The agreement also includes Mr. Casales release of Radian from any claims, known or unknown.
Change of Control Agreements. We entered into substantially similar change of control agreements at various times with each named executive officer other than Mr. Ibrahim. Following the initial term, each agreement automatically extends for successive one-year terms unless terminated by either party. Our change of control agreements with Mr. Kasmar and Mr. Casale terminated on July 1, 2007 and November 1, 2007, respectively, pursuant to the terms of the their transition agreements discussed above. Our change of control agreement with Mr. Croner will terminate on May 2, 2008, the effective date of his resignation.
On December 11, 2007, Radian Asset Assurance entered into an additional amended and restated change of control agreement with Mr. Cooke. Under both his change of control agreement with us and with Radian Asset Assurance, Mr. Cooke is obligated to provide on a limited basis consulting services to us or Radian Asset Assurance, as applicable, for a period of twelve months following notice of a qualifying termination, unless the consulting services would materially impair Mr. Cookes ability to perform in any subsequent full-time employment. In addition, Mr. Cooke is prohibited for twelve months following his termination from directly or indirectly soliciting any of our employees to leave their employment. Any amounts due to Mr. Cooke under his agreement with Radian Asset Assurance will be offset against any payments due to Mr. Cooke under his agreement with us.