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Radian Group Inc. (NYSE:RDN) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Radian Group Inc. (NYSE:RDN) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.

Appointment of New Chief Executive Officer and
Director; Retirement of Current Chief Executive Officer and
Director

On February8, 2017, the Board of Directors (the Board) of Radian
Group Inc. (the Company) appointed Richard G. Thornberry, 58, as
the Companys Chief Executive Officer and as a member of the
Board, both effective March6, 2017. Mr.Thornberry will succeed
Sanford A. Ibrahim, the Companys current Chief Executive Officer,
who has informed the Board that he intends to retire as Chief
Executive Officer and resign as a member of the Board, in each
case effective March5, 2017. The Company had previously disclosed
Mr.Ibrahims intention to retire when his existing employment
agreement terminates on December31, 2017.

Mr.Thornberrys broad understanding of the mortgage finance
industry and experience in leading innovative mortgage industry
businesses gives him a unique perspective and set of skills to
lead the Company and to meaningfully contribute to its Board.
Most recently, Mr.Thornberry has served as Chairman and Chief
Executive Officer of NexSpring Group, LLC (NexSpring Group), a
company he co-founded in 2006. The NexSpring Group provides
mortgage industry advisory and technology services to private
equity investors, mortgage lenders, financial institutions,
mortgage investors and other mortgage industry participants.
Mr.Thornberry also has served as the Chairman and Chief Executive
Officer of NexSpring Financial, LLC (NexSpring Financial), an
early stage fintech company that he co-founded to focus on
improving the overall value proposition for all participants in a
residential mortgage origination transaction. Prior to founding
NexSpring Group, from 1999-2005 Mr.Thornberry served as President
and Chief Executive Officer of Nexstar Financial Corporation, an
end-to-end mortgage business process outsourcing firm, which he
co-founded in 1999
and sold to MBNA Home Finance in 2005. Mr.Thornberry has also
held executive positions with MBNA Home Finance from 2005-2006,
Citicorp Mortgage Inc. from 1996-1998 and Residential Services
Corporation of America/Prudential Home Mortgage Company from
1987-1996. Mr.Thornberry began his career as a certified public
accountant at Deloitte where he primarily worked with financial
services clients and entrepreneurial businesses.

There is no
arrangement or understanding between Mr.Thornberry and any other
person to which he was selected as Chief Executive Officer and
director. He does not have any family relationship with any
director, executive officer or person nominated or chosen to
become a director or executive officer. Mr.Thornberry does not
have a direct or indirect material interest in any transaction in
which the Company is or will be a participant.

New
Employment Agreement and Compensation Arrangements Richard G.
Thornberry, Chief Executive Officer

Employment
Agreement

On February8,
2017, the Company and Mr.Thornberry entered into an Employment
Agreement (the CEO Employment Agreement) to which Mr.Thornberry
will serve as the Companys Chief Executive Officer, beginning
March6, 2017 (the Employment Date). The initial term of the CEO
Employment Agreement is three years (the Initial Term). Set forth
below is a description of the CEO Employment Agreement, which is
qualified in its entirety by reference to the full text of the
CEO Employment Agreement, a copy of which is filed as Exhibit
10.1 and is incorporated by reference in this Current Report on
Form8-K.

2

The CEO Employment
Agreement provides that, subject to the terms and conditions of
the agreement, Mr.Thornberry will serve as the Companys Chief
Executive Officer for the Initial Term, and further provides that
after the Initial Term, the CEO Employment Agreement will
automatically renew for successive one-year periods unless either
party provides the other with written notice of termination at
least 90 days prior to the end of any renewal period (the Initial
Term, together with any renewal periods, collectively, the Term).
In addition, the CEO Employment Agreement provides that
Mr.Thornberry will be appointed to the Board effective as of the
Employment Date, and that during the Term, he will be nominated
as a member of the Board at each annual meeting of stockholders
at which his seat on the Board is up for re-election.

to the CEO
Employment Agreement, Mr.Thornberry will receive: (1)an annual
base salary of $750,000 (which may be increased, but not
decreased, during the Term); (2)eligibility to earn an incentive
award under the Radian Group Inc. STI/MTI Incentive Plan for
Executive Employees (including any successor plan, the STI/MTI
Plan) in each fiscal year of the Term, with his target level for
the STI/MTI Plan for the 2017-2018 STI/MTI period equal to
$1,500,000 (the 2017 STI/MTI Target); and (3)eligibility to
receive long-term equity incentive awards in each fiscal year of
the Term under the Companys long-term incentive program (LTI) in
amounts and on terms established by independent directors of the
Board, with his 2017 LTI set at $3,000,000. The CEO Employment
Agreement also provides that for each full fiscal year after 2017
during the Term, Mr.Thornberrys total target compensation
(comprised of annual base salary, target award under the STI/MTI
Plan and target LTI awards) will not be less than $5,250,000,
with his STI/MTI target and LTI target for the those years to be
established by the independent directors of the Board in
accordance with the Companys process for setting executive
compensation (for information on the Companys process, see the
Companys Compensation Discussion and Analysis Section of the
Companys previously filed proxy statement for the May11, 2016
annual stockholders meeting).

In addition to his
annual compensation discussed above, Mr.Thornberry will receive:
(1)as an inducement to join the Company and to compensate him for
certain costs associated with transitioning his prior business
activities, a sign-on cash bonus of $500,000; and (2)in order to
further align him with the Companys stockholders, a sign-on grant
on the Employment Date of restricted stock units with a grant
date value equal to $1,000,000 (the Sign-On RSUs).

Mr.Thornberry will
receive relocation assistance in connection with his relocation
to the Philadelphia area, and he will be provided with vacation,
sick leave and holidays at levels commensurate with those
provided to other senior executives at the Company. He will also
be able to participate in the Companys other employee benefit
plans and programs in accordance with their terms.

to the CEO
Employment Agreement, Mr.Thornberry will receive the following
severance benefits, in each case payable in accordance with the
terms of the CEO Employment Agreement, if his employment is
terminated without cause or if he terminates employment for good
reason (as those terms are defined in the CEO Employment
Agreement) and he executes and does not revoke a written release
of any claims against the Company:

(1) two times his base salary;
(2) an amount equal to the greater of two times (a)his target
incentive award under the STI/MTI Plan for the year in which
the termination occurs (or if it has not yet been
established, the target incentive award for the immediately
preceding fiscal year) or (b)the 2017 STI/MTI Target;

3

(3) a prorated target incentive award under the STI/MTI Plan for
the year in which termination occurs based on a pro rata
portion of the greater of the target incentive award for the
year of termination (or if it has not yet been established,
the target incentive award for the immediately preceding
fiscal year) or the 2017 STI/MTI Target;
(4) reimbursement for the monthly cost of continued medical
coverage at or below the level of coverage in effect on the
date of termination until the earlier of: (x)18 months after
the termination date; (y)the date on which Mr.Thornberry
becomes eligible to elect medical coverage under Social
Security Medicare or otherwise ceases to be eligible for
continued coverage under the Companys health plan under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (COBRA); or (z)the date he is eligible to elect
medical coverage under a plan maintained by a successor
employer. During any period of continued medical coverage,
the Company has agreed to reimburse Mr.Thornberry for the
COBRA premiums paid by him, minus the employee contribution
rate for such coverage under the Companys health plan as of
the date of termination;
(5) accelerated vesting of any unvested Sign-On RSUs; and
(6) the Accrued Obligations (as defined in the CEO Employment
Agreement).

The CEO Employment
Agreement does not include any tax gross up for excise taxes. If
an excise tax under section 4999 of the Internal Revenue Code of
1986, as amended is triggered by any payments upon a change of
control, the aggregate present value of the payments to be made
under the CEO Employment Agreement will be reduced to an amount
that does not cause any amounts to be subject to this excise tax
so long as the net amount of the reduced payments, on an
after-tax basis, is greater than or equal to the net amount of
the payments without such reduction, but taking into
consideration this excise tax.

The compensation
payable to Mr.Thornberry under the CEO Employment Agreement is
subject to the Companys written policies, including the Code of
Conduct and Ethics (which includes the Companys securities
trading policy, the Code of Conduct), Incentive Compensation
Recoupment Policy, and stock ownership guidelines, as currently
in place or as may be amended by the Board. The CEO Employment
Agreement further provides that Mr.Thornberry will comply with
the Restrictive Covenants Agreement (described below) and other
written restrictive covenant agreements with the Company.

Restrictive
Covenants Agreement

In connection with
the CEO Employment Agreement, Mr.Thornberry entered into a
Restrictive Covenants Agreement, dated as of February8, 2017,
with the Company (the RCA). As further described in the RCA,
Mr.Thornberry has agreed that for 18 months following termination
of his employment for any reason (the Restriction Period) he will
not compete with the Company. In addition, during the Restriction
Period, he has agreed to restrictions on hiring and soliciting
the Companys employees and on soliciting the Companys customers.
The foregoing description of the RCA is qualified in its entirety
by reference to the full text of the RCA, a copy of which is
filed as Exhibit 10.2 and is incorporated by reference in this
Current Report on Form 8-K.

4

Sign-On
RSUs

As discussed
above, Mr.Thornberry will receive the Sign-On RSUs on the
Employment Date. The Sign-On RSUs will vest
one-third on the second, third and fourth anniversaries of the
grant date. The Sign-On RSUs provide for double trigger vesting
in the event of a change of control of the Company. In the event
of a change of control, if Mr.Thornberrys employment is
terminated by the Company without cause, or he terminates
employment for good reason (as those terms are defined in the CEO
Employment Agreement), in each case within 90 days before or one
year after a change of control, the Sign-On RSUs will become
fully vested and payable upon such termination (or the date of
the change of control, if later).

In addition, any unvested
Sign-On RSUs will automatically vest in full (1)if the Company
terminates Mr.Thornberrys employment without cause or he resigns
with good reason before the Sign-On RSUs become fully
vested or (2)in the event of Mr.Thornberrys death or disability
before the Sign-On RSUs become fully vested. Except as described
in the preceding sentence, in the event of termination of
Mr.Thornberrys employment, no Sign-On RSUs will continue to vest
after the date of such termination and the unvested Sign-On RSUs will be
forfeited.

The Sign-On RSUs also require
Mr.Thornberry to comply with the restrictions contained in the
RCA, the CEO Employment Agreement, the Code of Conduct and other
written agreements between Mr.Thornberry and the
Company.

The foregoing description of
the Sign-On RSUs is qualified in its entirety by reference to the
full text of the Form of Restricted Stock Unit Agreement between
Mr.Thornberry and the Company, a copy of which is filed as
Exhibit 10.3 and is incorporated by reference in this Current
Report on Form 8-K.

Retirement of
Chief Executive Officer and Director and Related
Agreements

In support of the Companys CEO
succession planning efforts and to ensure an orderly transition
to the Companys new CEO, Mr.Ibrahim has agreed to retire from the
Company prior to the end of the term of his existing employment
agreement with the Company (the 2014 Employment Agreement). As
further discussed below, the Company and Mr.Ibrahim have agreed
to enter into agreements that are intended to provide him with an
opportunity to earn amounts that he would have been eligible to
earn had he remained employed with the Company through the end of
the term of his 2014 Employment Agreement on December31, 2017 and
to ensure that the Company has the benefit of Mr.Ibrahims
services during the leadership transition period. The amounts
that Mr.Ibrahim ultimately will be paid under the agreements
referenced below primarily are dependent on the Companys and
Mr.Ibrahims performance.

Retirement
Agreement

Effective March5, 2017 (the
Retirement Date), Mr.Ibrahim will retire as the Chief Executive
Officer and a director of the Company. On February8, 2017, the
Company and Mr.Ibrahim entered into a Retirement Agreement (the
Retirement Agreement). Except as otherwise provided, the
Retirement Agreement supersedes the 2014 Employment Agreement.
Set forth below is a description of the Retirement Agreement,
which is qualified in its entirety by reference to the full text
of the Retirement Agreement, a copy of which is filed as Exhibit
10.4 and is incorporated by reference in this Current Report on
Form 8-K.

5

Subject to the terms and
conditions set forth therein (including the execution of a
release of claims against the Company), the Retirement Agreement
provides for the following compensation: (1) eligibility to
receive a 2016 short-term incentive (STI) award and a medium-term
incentive (MTI) award for the 2015-2016 performance period, in
each case under the STI/MTI Plan and at the time such awards are
paid to other participants under the plan; (2)eligibility to earn
an MTI award for the 2016-2017 performance period under the
STI/MTI Plan, based on 2017 performance metrics established by
the Compensation and Human Resources Committee of the Board (the
Compensation and HR Committee) for the 2017 performance year,
payable at the time 2017 MTI awards are paid to other
participants under the plan; and (3)a grant of performance-based
restricted stock units (PSUs) with a grant date value of
$1,950,000. In addition, the Company and Mr.Ibrahim will enter
into the Consulting Agreement described
below.

The PSUs will vest if the
closing price of the Companys common stock on the New York Stock
Exchange for any ten consecutive trading days during the
performance period commencing ten trading days prior to the first
anniversary of the Grant Date and ending on the fifth anniversary
of the Grant Date equals or exceeds 120% of the grant date share
price (the PSU Stock Price Hurdle). The PSUs will be forfeited if
the PSU Stock Price Hurdle is not met by the fifth anniversary of
the grant date. The PSUs will vest upon Mr.Ibrahims death or a
change in control of the Company, regardless of whether the PSU
Stock Price Hurdle has been met. The foregoing description of the
PSUs is qualified in its entirety by reference to the full text
of the Form of Restricted Stock Unit Agreement between Mr.Ibrahim
and the Company, a copy of which is filed as Exhibit 10.5 and is
incorporated by reference in this Current Report on Form
8-K

In addition to the foregoing
compensation amounts, if Mr.Ibrahim signs and does not revoke a
written release of claims against the Company on or within five
days of the Retirement Date, he will receive (1)lump sum cash
payments totaling $843,072, representing the base salary and cost
of long-term disability insurance that he would have received
through December31, 2017, as well as amounts that would have been
contributed by the Company to the Companys 401(k) plan and
Benefit Restoration Plan for his benefit had he continued in
employment through December31, 2017 and (2)continued medical
coverage for himself and his spouse for the applicable Coverage
Period (as defined in the Retirement Agreement) under the
Companys health plans in accordance with the terms set forth in
the Retirement Agreement. During any period of continued medical
coverage, Mr.Ibrahim or his spouse, as applicable, will pay the
full monthly COBRA premium cost of such coverage, and the Company
will reimburse Mr.Ibrahim or his spouse, as applicable, for the
COBRA premium cost minus the employee contribution rate for such
coverage under the Companys health
plan.

Under the Retirement
Agreement, Mr.Ibrahim has agreed to comply with restrictive
covenants, including covenants regarding non-competition,
confidentiality, and non-solicitation of customers and employees,
contained in the 2014 Employment Agreement and his outstanding
stock option and restricted stock unit awards (as updated in the
Retirement Agreement). The covenants regarding non-competition
and non-solicitation of customers and employees shall remain in
effect for a period ending on March5,
2018.

Termination of 2014
Employment
Agreement

Except as otherwise provided,
the Retirement Agreement supersedes Mr.Ibrahims 2014 Employment
Agreement, which would have expired by its terms on December31,
2017.

6

Consulting
Agreement

On February8, 2017, the
Company entered into a consulting agreement with Mr.Ibrahim (the
Consulting Agreement) that will commence on March6, 2017,
following Mr.Ibrahims retirement. A consulting agreement was
contemplated by the 2014 Employment Agreement, which provided
that if Mr.Ibrahim continued in employment through December31,
2017, the Company and Mr.Ibrahim would enter into a consulting
agreement covering the 12-month period following Mr.Ibrahims
termination date. to the Consulting Agreement, Mr.Ibrahim has
agreed to provide consulting services to the Company from March6,
2017 through March5, 2018. The description of the Consulting
Agreement set forth herein is qualified in its entirety by
reference to the full text of the Consulting Agreement, a copy of
which is filed as Exhibit 10.6 and is incorporated by reference
in this Current Report on Form
8-K.

to the Consulting Agreement,
the Company will pay Mr.Ibrahim a consulting fee of $79,166 per
month. In addition, Mr.Ibrahim will be eligible to earn a
performance-based cash incentive award (the Incentive Award)
based on performance measured over a two-year period. The target
Incentive Award is $3,000,000 with the actual payout to be
determined based on the attainment of specified performance goals
(as described below), subject to certain conditions. The
Compensation and HR Committee has established the following
performance metrics for the first year of the performance
period:

Forty percent of the Incentive Award (the Plan Component)
will be based on the Companys performance in satisfying its
financial and strategic objectives for 2017. The payout
percentage for the Plan Component (which is from 0% to 200%)
will be equal to the level awarded by the Compensation and HR
Committee to Radian Group participants in the STI/MTI Plan
for the 2017 performance period under that plan.
The remaining 60% of the Incentive Award the (Transition
Component) will be based on the Compensation and HR
Committees assessment of Mr.Ibrahims performance of the
services required under the Consulting Agreement. The amount
that may be awarded under this metric is from 0% to 50%.

Following the first year of
the performance period (January 1, 2017 through December31,
2017), the Compensation and HR Committee will determine the
amount, if any, of the Incentive Award that Mr.Ibrahim is
eligible to receive based on the performance metrics and
allocations described above. Fifty percent of any such amount
will be paid to Mr.Ibrahim as an Incentive Award between
January1, 2018 and March15, 2018. The remaining fifty percent
will become the target incentive award (MTI Target Incentive
Award) for the two-year performance period (January 1, 2017
through December31, 2018). At the end of the two-year performance
period, the Compensation and HR Committee will award Mr.Ibrahim a
percentage of the MTI Target Incentive Award between 0% and 115%
(the MTI Payout), based on the performance of the mortgage
insurance written during 2017, through the end of the two-year
performance period. Any MTI Payout that Mr.Ibrahim is eligible to
receive will be paid to him between January1, 2019 and March15,
2019.

The Incentive Award may be
reduced by the Compensation and HR Committee, in its discretion,
in the event of: (1)the occurrence of an event that results in a
recoupment of Mr.Ibrahims prior compensation under the Companys
Incentive Compensation Recoupment Policy; or (2)any other
material negative impact on the Company resulting from
Mr.Ibrahims prior performance as CEO or as a consultant under the
Consulting Agreement.

7

The Consulting Agreement
contains provisions relating to confidentiality, and provides
that Mr.Ibrahim will comply with the restrictive covenants
contained in the Retirement Agreement (as discussed
above).

Amendment of
STI/MTI Plan

On February7, 2017, the
Compensation and HR Committee approved amendments to the STI/MTI
Plan that apply to awards calculated under the STI/MTI Plan for
years beginning on or after January1,
2017.

The STI/MTI Plan is designed
to provide the Companys eligible senior officers, including the
Companys executive officers, with the opportunity to earn cash
awards during a two-year performance period, based on achievement
of corporate and individual performance goals. Following the
first year of the performance period, 50% of the amount allocated
to a participant under the STI/MTI Plan, based on performance, is
paid to the participant as a STI award (the STI Award). The
remaining 50% is established as the participants target MTI award
(MTI Award) for the full two-year performance period. MTI Awards
are paid after the second year of the performance period, based
on performance.

Generally, a participant must
remain employed through the payment date for the STI Award in
order to be eligible for the STI Award. However, to the STI/MTI
Plan, if a participant is terminated without cause (as that term
is defined in the STI/MTI Plan) on or after December31 of the
first year of the performance period and the participant executes
an appropriate release, the participant will receive an STI Award
based on the achievement of the performance goals. In addition,
the STI/MTI Plan provides the Compensation and HR Committee with
discretion to pay a bonus upon the death of a participant based
on the achievement of the performance goals. The amendments
adopted by the Compensation and HR Committee modify the
circumstances under which awards may be paid after termination of
employment, as follows:

If a participant has an executive employment or severance
agreement that provides for termination for cause or good
reason, as those terms are defined in the applicable
agreement, and the participant is terminated without cause or
the participant terminates for good reason after December31
of the first year of the performance period, then if the
participant executes an appropriate release, the participant
will receive an STI Award based on the achievement of the
performance goals; and
If a participant dies or incurs a Disability (as that term is
defined in the STI/MTI Plan) before the payment date for the
STI Bonus, the participant will receive a prorated bonus
based on achievement of the performance goals (without giving
consideration to achievement of the individuals performance
goals).

The amendments to the STI/MTI
Plan also allow for certain employees to be eligible for only STI
Awards, and not MTI Awards, that would be paid in full following
the end of the first year of the performance
period.

The foregoing summary is not a
complete description of the STI/MTI Plan, as amended and
restated, and is qualified in its entirety by reference to the
full text of the amended and restated STI/MTI Plan, a copy of
which is filed as Exhibit 10.7 and is incorporated by reference
in this Current Report on Form
8-K.

8

Item9.01. Financial Statements and Exhibits.

(d)
Exhibits
.

Exhibit

No.

Description
10.1* Employment Agreement, dated as of February8, 2017, between
Radian Group Inc. and Richard G. Thornberry
10.2* Restrictive Covenants Agreement, dated as of February8, 2017,
between Radian Group Inc. and Richard Thornberry
10.3* Form of Restricted Stock Unit Agreement between Richard
Thornberry and Radian Group Inc.
10.4* Retirement Agreement, dated as of February8, 2017, between
Radian Group Inc. and Sanford A. Ibrahim
10.5* Consulting Agreement, dated as of February8, 2017, between
Radian Group Inc. and Sanford A. Ibrahim
10.6* Form of Performance Based Restricted Stock Unit Agreement
between Sanford A. Ibrahim and Radian Group Inc.
10.7* Radian Group Inc. STI/MTI Incentive Plan for Executive
Employees, as amended and restated
* Management contract, compensatory plan or arrangement.

9

About Radian Group Inc. (NYSE:RDN)
Radian Group Inc. is a holding company that provides mortgage insurance, and products and services to the real estate and mortgage finance industries. The Company operates in two segments: Mortgage Insurance and Services. The Mortgage Insurance segment provides credit-related insurance coverage, principally through private mortgage insurance to mortgage lending institutions. The Services segment provides outsourced services, information-based analytics and specialty consulting for buyers and sellers of, and investors in, mortgage- and real estate-related loans and securities, as well as other asset-backed securities (ABS). It also offers mortgage insurance products, such as primary mortgage insurance and pool insurance. Its Services segment is engaged in offering loan review and due diligence; surveillance; valuation and component services; real estate owned (REO) management services, and services for the United Kingdom and European mortgage markets through its EuroRisk operations. Radian Group Inc. (NYSE:RDN) Recent Trading Information
Radian Group Inc. (NYSE:RDN) closed its last trading session up +0.10 at 19.72 with 1,363,712 shares trading hands.

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