The amounts granted represent the Executives target award for the BV RSUs (the
BV RSU Target). On the vesting date, each Executive will become vested in a number of BV RSUs (from 0 to 200% of his BV RSU Target, the BV Performance Level) based on how the Companys cumulative growth in LTI Book Value
per Share (as defined below) over a three-year performance period (from March 31, 2019 through March 31, 2022) compares to the following reference points:
|
|
|
LTI Book Value per Share Growth
(1)
|
|
BV Payout Percentage
(1)
(% of BV RSU Target)
|
³
60%
|
|
200%
|
50%
|
|
150%
|
40%
|
|
100%
|
30%
|
|
50%
|
<20%
(2)
|
|
0%
|
(1)
|
If the Companys growth in LTI Book Value per Share falls between two referenced percentages, the payout
percentage will be interpolated.
|
(2)
|
If the Companys growth in LTI Book Value per Share is less than 20%, the payout percentage will be 0.
|
The Companys LTI Book Value per Share is defined as: (A) Book Value adjusted to exclude:
(1) Accumulated Other Comprehensive Income; and (2) the impact, if any, during the three-year performance period from declared dividends on common shares;
divided by
(B) basic shares of common stock outstanding.
The BV RSUs include a
one-year
holding period after vesting, such that the vested BV 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 BV RSUs. However, as set forth in the applicable grant instrument, the
post-vesting holding period will not apply in certain circumstances, such as (i) the Executives death or disability, (ii) an Involuntary Termination (as defined below) in connection with a change of control before the end of the
performance period, or (iii) the occurrence of a change of control after the end of the performance period.
The BV 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, absent an Involuntary Termination (as defined below), the BV
RSUs will become vested at the end of the three-year performance period in an amount equal to the projected BV Performance Level for the full performance period, estimated as of the end of the fiscal quarter immediately prior to the change of
control (the CoC Performance Level).
The treatment of the BV RSU awards upon the occurrence of certain employment termination
events is described under
Termination of Employment Events
below.
2019 Time-Based RSUs
The Committee granted Time-Based RSUs to the Executives in the following amounts: Mr. Thornberry 51,790 RSUs; Mr. Hall
12,580 RSUs; Mr. Brummer 14,800 RSUs; Mr. Hoffman 12,580 RSUs; and Mr. McMahon 11,100 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 15, 2020, May 15, 2021 and May 15, 2022), as long as the Executive is an employee of Radian on the
vesting date.