Introductory Note
In 2009, Radian Group Inc. (the “Company”) adopted a Tax Benefits Preservation Plan, dated October 9, 2009, as amended as of February 12, 2010 and May 3, 2010, between the Company and the Bank of New York Mellon (“BNY Mellon”), as Rights Agent (the “Plan”). Computershare Limited has since replaced BNY Mellon as Rights Agent under the Plan. Under the Plan, certain Rights (as defined in the Plan) (the “Rights”) were issued for the purpose of preventing, under Internal Revenue Code Section 382 (“Section 382”), an “ownership change” that would result in the limitation on the use of certain tax benefits of value to the Company. The Plan obligated the Company’s board of directors (the “Board”) to at least annually consider whether such limitation would no longer be material to the Company in light of all relevant factors, including, in particular, the amount and anticipated utilization of the tax benefits and the Company’s market capitalization. If the Board were to determine that such limitation would not be material, the Rights would expire pursuant to the terms of the Plan on the date of such determination (the “Expiration Date”).
In connection with the adoption of the Plan, the Company also amended its Amended and Restated Certificate of Incorporation (the “Charter”) andBy-laws (the “CurrentBy-laws”) to include provisions for the same purposes of preventing, under Section 382, an “ownership change” and the resulting limitation on the use of the Company’s tax benefits. These provisions placed restrictions on the transfer of ownership of the Company’s common stock, which restrictions would be released upon the date the Board determined that a limitation on the use of the tax benefits was no longer material to the Company (the “Restriction Release Date”).
| Item 1.02 | Termination of a Material Definitive Agreement. |
The information set forth in the Introductory Note to this Current Report on Form8-K is incorporated herein by reference in its entirety.
On March 19, 2019, the Board determined that a limitation on the use of the tax benefits under Section 382 was no longer material to the Company and accordingly that the Rights were to expire on that date. On that date, in accordance with the terms of the Plan, the Expiration Date occurred, the Rights became null, void, and of no further effect and the Plan was terminated.
The foregoing description of the Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the Plan and the amendments thereto, copies of which are Exhibits 4.2 and 4.3 to the Annual Report on Form10-K filed by the Company on February 28, 2018 and are incorporated herein by reference.
| Item 3.03 | Material Modification to Rights of Security Holders. |
The information set forth in Item 1.02 to this Current Report on Form8-K is incorporated herein by reference in its entirety. As a result of the Board’s determination on March 19, 2019 that a limitation on the use of the tax benefits under Section 382 was no longer material to the Company, as of such date, under the Charter and the CurrentBy-laws, the Restriction Release Date occurred. Accordingly, the restrictions within the Charter and the CurrentBy-laws on the transfer of ownership of the Company’s common stock terminated as of that date.
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