Item 5.02.
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Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
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(e) Approval of Radian Group Inc. Equity Compensation Plan
On May 10, 2017, stockholders of Radian Group Inc. (“Radian” or the
“Company”) approved amendments to the Radian Group Inc. 2014 Equity
Compensation Plan (as so amended and restated, the “Radian Group Inc.
Equity Compensation Plan” or “Plan”) to increase the shares available
for issuance under the Plan and to make certain additional changes. The
Plan is described in Proposal 4 in the Company’s proxy statement for the
2017 Annual Meeting of Stockholders, filed with the Securities and
Exchange Commission on April 10, 2017 (the “Proxy Statement”) and is
included in its entirety as Appendix A to the Proxy Statement.
2017 Long-Term Incentive Awards
On May 10, 2017, the Compensation and Human Resources Committee (the
“Committee”) of the Company’s Board of Directors (the “Board”) granted
annual long-term incentive awards (the “2017 LTI Awards”) to the
Company’s executive officers, including Richard G. Thornberry, the
Company’s current Chief Executive Officer, and J. Franklin Hall, Derek
V. Brummer and Edward J. Hoffman, the Company’s named executive officers
(“NEOs”) who continue to serve as executive officers of the Company (Mr.
Thornberry and the NEOs are referred to herein as the “Executives”).
All of the 2017 LTI Awards granted by the Company, including those
awarded to the Executives as described in more detail below, were
granted under the Plan. All of the 2017 LTI Awards will be settled in
shares of the Company’s common stock.
For 2017, each Executive’s target 2017 LTI Award is comprised of the
following components: (1) performance based restricted stock units that
will vest based on Radian’s relative total stockholder return (“TSR”)
which compares Radian's absolute TSR to a designated peer group over a
three-year performance period (the “TSR RSUs”); (2) performance based
restricted stock units that will vest based on growth in the Company’s
“LTI Book Value per Share” (as defined below) over a three-year
performance period (the “BV RSUs” and together with the TSR RSUs, the
“Performance Based RSUs”); and (3) time-based restricted stock units
that will vest over three years in pro rata installments (“Time-Based
RSUs”). Each component of the 2017 LTI Awards represents one-third of
the total target value of the 2017 LTI Awards, with the performance
based components representing 67% of the total awards.
2017 Performance Based RSU Awards
The Committee granted Performance Based RSUs to the Executives in the
following amounts:
|
Executive Officer
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TSR RSUs (#)
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BV RSUs (#)
|
|
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Mr. Thornberry
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62,290
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67,380
|
|
|
|
|
|
|
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Mr. Hall
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10,390
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11,230
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|
|
|
|
|
|
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Mr. Brummer
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11,940
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12,920
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|
|
|
|
|
|
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Mr. Hoffman
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10,390
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11,230
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With respect to the Performance Based RSUs, the amounts granted
represent the Executive’s target award for the TSR RSUs (the “TSR RSU
Target”) and the BV RSUs (the “BV RSU Target”). The 2017 Performance
Based RSU awards will vest on May 10, 2020, based on the attainment of
specified performance goals (as described below), subject to certain
conditions (as specified below) that could accelerate such
vesting. Each vested Performance Based RSU will be payable in one share
of the Company’s common stock.
TSR RSUs.
On the vesting date, each Executive will become
vested in a number of shares of the Company’s common stock (from 0 to
200% of his TSR RSU Target) based on the Company’s relative TSR over a
three-year performance period, as further described below, subject to a
maximum cap of six times the value of his TSR RSU Target on the grant
date.
The Company’s relative TSR will be a comparison of the Company’s
absolute TSR against the median TSR of a designated peer group of 14
peer companies (the “TSR Peer Group”), which primarily comprises the
peer companies selected by the Committee to benchmark compensation for
the executive officers’ 2017 compensation. The Company’s absolute TSR
will be determined based on the change in market value of the Company’s
common stock during the performance period, as measured by comparing (x)
the average closing price of the Company’s common stock on the NYSE for
the 60 consecutive trading days preceding and including May 10, 2017 and
(y) the average closing price for the 60 consecutive trading days
preceding and including the last day of the performance period (May 10,
2020). TSR includes dividends paid during the performance period, as
though they were reinvested in shares of the Company’s common stock.
The payout for the TSR RSUs will be determined by comparing the
Company’s absolute TSR over the performance period against the median
TSR of the TSR Peer Group (the “Median Peer Group TSR”). The starting
point for the payout determination will be 100% of the TSR RSU
Target. For every 1% that the Company’s absolute TSR exceeds the Median
Peer Group TSR, the payout percentage will increase by 2 percentage
points above 100% of the TSR RSU Target. For every 1% that the
Company’s absolute TSR is below the Median Peer Group TSR, the payout
percentage will decrease by 2 percentage points below 100% of the TSR
RSU Target. Regardless of the extent to which the Company’s absolute
TSR may exceed the Median Peer Group TSR, if the Company’s absolute TSR
is negative over the performance period, the maximum potential payout
for the TSR RSUs will be capped at 75% of the TSR RSU Target.
BV RSUs.
On the vesting date, each Executive will become
vested in a number of shares of the Company’s common stock (from 0 to
200% of his BV RSU Target) based on how the Company’s cumulative growth
in LTI Book Value per Share (as defined below) over a three-year
performance period (from March 31, 2017 through March 31, 2020) compares
to the following reference points:
|
LTI Book Value per Share Growth
(1)
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Payout Percentage
(1)
(% of BV RSU Target)
|
|
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≥50%
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200%
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|
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40%
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150%
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|
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30%
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100%
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|
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20%
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50%
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|
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<10%
(2)
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0%
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|
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(1)
|
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If the Company’s growth in LTI Book Value per Share falls between
two referenced percentages, the payout percentage will be
interpolated.
|
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(2)
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If the Company’s growth in LTI Book Value per Share is less than
10%, the payout percentage will be 0.
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The Company’s “LTI Book Value per Share” is defined as: (A) Tangible
Book Value (Total Stockholders’ Equity less Goodwill and Other
Intangible Assets, net) adjusted to exclude: (1) Accumulated Other
Comprehensive Income; and (2) the impacts, if any, during the three-year
performance period from: (i) repurchases or retirements of convertible
bonds; (ii) merger and acquisition-related expenses; (iii) changes in
goodwill and other intangible assets related to acquisitions or
dispositions; (iv) repurchases of common shares; and (v) declared
dividends on common shares;
divided by
(B) basic shares of
common stock outstanding, as adjusted to exclude the share impact, if
any, related to any of the items identified in (A) above, each applied
on a consistent basis.
Provisions Generally Applicable to Performance Based RSUs.
The Performance Based RSUs include a one-year, post-vesting holding
period, such that the vested Performance Based RSUs will not be
convertible into shares (other than shares withheld to pay taxes due at
vesting) until the one-year anniversary of the vesting date of the
Performance Based RSUs. However, as set forth in the applicable grant
instrument, the post-vesting holding period will not apply in certain
circumstances, such as the Executive's death or disability during
employment, the occurrence of a change of control after the end of the
performance period, or certain terminations of employment in the event
of a change of control before the end of the performance period.
The Performance Based RSU awards provide for “double trigger” vesting in
the event of a change of control. In the event of a change of control of
the Company before the end of the three-year performance period, the
Performance Based RSUs will vest at target at the end of the three-year
performance period on May 10, 2020, provided that the Executive remains
employed by the Company through such date. However, if the Executive’s
employment is terminated by the Company without “cause,” or the
Executive terminates employment for “good reason” (as those terms are
defined in the grant instrument), in each case within 90 days before or
one year after a change of control, the Performance Based RSUs will
become fully vested at target upon such termination (or the date of the
change of control, if later).
If the Executive retires before the end of the three-year performance
period, the award will remain outstanding and will vest at the end of
the performance period to the extent that the performance criteria have
been satisfied (or will vest at the target level in the event of a
change of control as discussed above) and generally will become payable
subject to the one-year holding period. Additionally, the Performance
Based RSUs will become fully vested and payable at target in the event
of the Executive’s death or disability during employment.
Except as described below, if the Executive is involuntarily terminated
by the Company other than for “cause” or the Executive terminates
employment for “good reason,” in each case six months or more after the
award is granted, and the Executive executes a written release of claims
against the Company, a prorated portion of the unvested Performance
Based RSUs (based on the number of months that the Executive was
employed following the date the award was granted) will remain
outstanding and will represent the Executive’s new target award;
provided however, that if such termination occurs within six months
prior to the end of the three-year performance period, the Performance
Based RSUs will not be prorated and the grant date target award will
remain outstanding in its entirety. Any Performance Based RSUs that
remain outstanding will vest at the end of the performance period to the
extent that the performance criteria have been satisfied (or will vest
at the applicable target level in the event of a change of control) and
generally will become payable subject to the one-year holding period
discussed above.
The Performance Based RSUs also include a provision that prohibits the
Executive from competing with the Company and from soliciting the
Company’s employees or customers for a period of eighteen (18) months
with respect to Mr. Thornberry and a period of twelve (12) months for
each of the other Executive’s (in each case, the “Restricted Period”)
following termination of the Executive’s employment for any reason.
2017 Time-Based RSUs
The Committee granted Time-Based RSUs to the Executives in the following
amounts: Mr. Thornberry – 60,210 RSUs; Mr. Hall – 10,040 RSUs; Mr.
Brummer – 11,540 RSUs; and Mr. Hoffman – 10,040 RSUs.
The Time-Based RSUs are scheduled to vest in pro rata installments on
each of the first three anniversaries of the grant date (i.e., May 10,
2018, May 10, 2019 and May 10, 2020), as long as the Executive is an
employee of Radian on the vesting date.
In the event of the Executive’s retirement, death or disability before
the end of the three-year vesting period, any unvested Time-Based RSUs
will become fully vested. Additionally, if the Executive is
involuntarily terminated by the Company other than for “cause” or the
Executive terminates employment for “good reason” and the Executive
executes a written release of claims against the Company, any unvested
Time-Based RSUs will become fully vested.
The Time-Based RSU awards provide for “double trigger” vesting in the
event of a change of control.
The Time-Based RSUs also include a provision that prohibits the
Executive from competing with the Company and from soliciting the
Company’s employees or customers for the applicable Restricted Period
following termination of the Executive’s employment for any reason.
The foregoing summary of the 2017 LTI Awards is not a complete
description of all of the terms and conditions of the Performance Based
RSU awards and the Time-Based RSUs and is qualified in its entirety by
reference to the full text of the form of grant instruments, which the
Company plans to file as exhibits to its Quarterly Report on Form 10-Q
for the quarter ended June 30, 2017.
Item 5.07.
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Submission of Matters to a Vote of Security Holders.
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At the Company’s 2017 Annual Meeting of Stockholders held on May 10,
2017, the following proposals were submitted to a vote of the Company’s
stockholders, with the voting results indicated below:
(1) Election of ten (10) directors for a term of one year each, to
serve until their successors have been duly elected and qualified or
until their earlier removal or resignation:
|
FOR
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AGAINST
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ABSTAIN
|
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BROKER
NON-VOTES
|
|
|
|
|
|
|
|
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Herbert Wender
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171,252,864
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3,640,238
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|
244,201
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|
17,662,419
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|
|
|
|
|
|
|
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David C. Carney
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172,855,251
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2,025,121
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256,931
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17,662,419
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|
|
|
|
|
|
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Howard B. Culang
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171,772,868
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3,108,498
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|
255,937
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17,662,419
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|
|
|
|
|
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Lisa W. Hess
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170,874,442
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3,993,774
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|
269,087
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|
17,662,419
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|
|
|
|
|
|
|
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Stephen T. Hopkins
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171,774,142
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3,092,411
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270,750
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17,662,419
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|
|
|
|
|
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Brian D. Montgomery
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|
|
|
|
|
|
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172,256,106
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2,624,456
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256,741
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17,662,419
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|
|
|
|
|
|
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Gaetano Muzio
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170,816,809
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|
4,051,776
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|
268,718
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17,662,419
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|
|
|
|
|
|
|
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Gregory V. Serio
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171,072,560
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3,799,061
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|
265,682
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17,662,419
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FOR
|
|
AGAINST
|
|
ABSTAIN
|
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BROKER
NON-VOTES
|
|
|
|
|
|
|
|
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Noel J. Spiegel
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174,242,527
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650,726
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|
244,050
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|
17,662,419
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|
|
|
|
|
|
|
|
Richard G. Thornberry
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|
|
|
|
|
|
|
173,922,076
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958,238
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|
256,989
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|
17,662,419
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(2) Approval, by an advisory, non-binding vote, of the compensation of
the Company’s named executive officers:
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
BROKER NON-VOTES
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115,909,399
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|
58,914,659
|
|
313,245
|
|
17,662,419
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(3) Advisory, non-binding vote, on the frequency of the advisory vote
to approve the compensation of the Company’s named executive officers:
One Year
|
|
Two Years
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|
Three Years
|
|
Abstain
|
|
BROKER
NON-VOTES
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171,584,198
|
|
423,497
|
|
2,835,148
|
|
294,460
|
|
17,662,419
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In light of the voting results on this advisory vote, and consistent
with its recommendation to stockholders, on May 10, 2017, the Board
approved an annual advisory vote regarding the compensation of the
Company’s named executive officers.
(4) Approval of the Amended and Restated Radian Group Inc. Equity
Compensation Plan:
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
BROKER NON-VOTES
|
168,637,164
|
|
6,216,941
|
|
283,198
|
|
17,662,419
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(5) Ratification of the appointment of PricewaterhouseCoopers LLP as
the Company’s independent registered public accounting firm for the year
ending December 31, 2017:
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
191,322,961
|
|
1,124,528
|
|
352,233
|
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