Exhibit (10)(iii)(o)
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement, effective as of the
Closing under the Contribution Agreement among The Dow Chemical
Company, The Hartford Steam Boiler Inspection and Insurance
Company, Dow Environmental Inc., and Radian Corporation (the
"Effective Date"), is by and between Radian International LLC
(the "Company") and Donald M. Carlton (the "Executive").
WHEREAS, the parties desire to enter into this Agreement
pertaining to the employment of the Executive by the Company;
NOW THEREFORE, the Company and the Executive agree as follows:
1. Term of Employment
1.1 Term of Employment. "Term of Employment" for purposes of
this Agreement is the period of time beginning on the
Effective Date and ending on the third anniversary of the
Effective Date (unless sooner terminated pursuant to this
Agreement).
2. Employment
2.1 Offer and Acceptance of Employment. Subject to the terms and
conditions of this Agreement, the Company agrees to employ
Executive during the Term of Employment and Executive agrees
to accept such employment and to provide services during the
Term of Employment in accordance with this Agreement.
2.2 Position. At the commencement of the Term of Employment,
Executive shall be employed as a senior executive.
Executive's position, authority and responsibilities and the
type of work Executive is asked to perform, however, shall
be determined by the Company in its sole discretion subject
to the direction of the Members Committee of the Company
(the "Members Committee"); provided that, nothing in this
paragraph shall in any way override Executive's right to
terminate this Agreement for "Good Reason" as set forth in
Paragraph 5.5.
2.3 Performance of Duties. Executive agrees to devote such
attention and time to the business and affairs of the
Company as is customary for the type of position held by
Executive and, to the extent necessary to discharge the
responsibilities and duties assigned to Executive under this
Agreement, to use Executive's reasonable best efforts to
perform such responsibilities faithfully and efficiently.
2.4 Sharing Duties. Nothing in this Agreement shall preclude the
Company from designating another person or persons to share
the responsibilities and the duties of the Executive and,
except as specified by the Company, no such designation
shall be considered a termination of the Executive's
employment with the Company or a basis for Termination by
Executive for Good Reason pursuant to Paragraph 5.5,
provided Executive's continuing responsibilities and duties
are consistent with senior executive status.
3. Base Compensation and Benefits
3.1 Base Salary. During the Term of Employment, Executive shall
receive a base salary at a monthly rate of $30,850. The base
salary shall be reviewed at least annually by the Members
Committee. Base salary may be adjusted upwardly but shall
not be reduced except to the extent that reductions of the
same percentage are being made at the same time to the
salaries of all other Company officers at or above the vice-
president level, and such base salary shall be restored to
its prior level when, and to the same extent as, the
restoration that applies to the other officers.
3.2 Savings and Retirement Plans. During the Term of Employment,
Executive shall be entitled to participate in all savings
and retirement plans and programs applicable to other key
executives of the Company.
3.3 Employee Welfare Benefit Plans. During the Term of
Employment, Executive and/or Executive's family, as the case
may be, shall be eligible for participation in, and shall
receive all benefits under, welfare benefit plans provided
by the Company to its employees.
3.4 Expenses. During the Term of Employment, Executive shall be
entitled to receive prompt reimbursement for all reasonable
expenses for entertainment, travel, meals, lodging and
similar business expenses which are authorized by the
Company and actually incurred by the Executive in the
performance of his employment by the Company in accordance
with the policies and procedures of the Company.
3.5 Vacation. During the Term of Employment, Executive shall be
entitled to paid vacation in accordance with the vacation
policy of the Company.
4. Other Compensation and Benefits
4.1 Short-Term Incentive. Executive will be eligible to
participate in a Company short-term incentive compensation
program covering the one year period beginning on the
Effective Date ("the 1996 Short-Term Plan"). The maximum
amount to be awarded to Executive under the 1996 Short-term
Plan is fifty percent of executive's initial annual base
salary for 1996. The performance criteria used to determine
the actual payout amount shall be determined by the Members
Committee. The rules for the 1996 Short-term Plan, regarding
Method and Time of Award, Rights on Termination of
Employment, and Death of a Participant, shall be the same as
the 1995 Radian Officers' Short-Term Incentive Compensation
Plan, except that payment, if any, under the 1996 Short-Term
Plan will be paid as soon as possible after the first
anniversary of the Effective Date.
4.2 Long-Term Incentive. The Members Committee will adopt an
incentive compensation plan for the period beginning on the
Effective Date and continuing through 1998 ("the Long-term
Plan"). Under the Long-term Plan, Executive will receive a
minimum payment consisting of a share of a pool of
$1,200,000, which will be established by the Company and
distributed among Executive, [intentionally deleted], with
Executive's share of such pool to be determined by the
Members Committee in its sole discretion. Executive will
also be eligible to receive an additional payment under the
Long-term Plan, contingent upon Company performance. Within
three months of the Effective Date, the Members Committee
will establish financial/business goals under the Long-term
Plan. If the Company achieves the goals set out in the
Long-term Plan established by the Members Committee,
Executive will receive, in addition to the minimum payment
set forth above, a share of a pool of $2,400,000, which will
be established by the Company and distributed among
Executive, [intentionally deleted], with Executive's share of such
pool to be determined by the Members Committee in it sole
discretion. Performance results above or below the Long-term
Plan goal(s) will increase or reduce the amount of this
additional pool, according to the Long-term Plan formula.
Payout to Executive under the Long-term Plan will be made in
the first quarter of 1999. If Executive dies, becomes
totally disabled (as defined in Paragraph 5.2), or retires
with the written consent of the Company, on or before
December 31, 1998, the payment to Executive or his
beneficiary under the Long-term Plan shall be prorated
according to the number of months of employment in the
period beginning on the Effective Date and ending on
December 31, 1998. If Executive's employment with the
Company is terminated on or before December 31, 1998, for
reasons other than Cause (as defined in Paragraph 5.4) or is
terminated on or before December 31, 1998, by Executive for
Good Reason (as defined in Paragraph 5.5) unless in either
case Executive elects under either Paragraph 5.3 or 5.5, as
the case may be, to compete without regard to the Provisions
of Paragraph 8. 1, Executive shall be entitled to receive in
the first quarter of 1999 a payment under the Long-term Plan
as if Executive had remained employed with the Company
through December 31, 1998. If Executive is terminated by the
Company for Cause on or before December 31, 1998, Executive
shall lose any right to receive any payment under the
Long-term Plan. If one or more of the participants in the
Long-term Plan terminates employment with the Company on or
before December 31, 1998, for reasons making them ineligible
for any payout under the Long-term Plan or eligible for only
a prorated payment under the Long-term Plan, the Members
Committee may reduce the size of either or both pools by an
amount or amounts to be determined by the Members Committee
in its sole discretion.
4.3 Radian Corporation Supplemental Executive Retirement Plan.
During the Term of Employment of Executive by the Company,
Company shall maintain the Radian Corporation Supplemental
Executive Retirement Plan, effective January 1, 1991, as
modified and in effect on January 1, 1995, or the
substantial equivalent thereof, in effect for the benefit of
Executive.
4.4 Salary Continuation Agreement. During the Term of Employment
of Executive by the Company, Company shall maintain the
Executive's January 1, 1986, and April 4, 1989, Salary
Continuation Agreements with Radian, or the substantial
equivalent thereof, in effect for the benefit of Executive.
4.5 Post-employment Medical Coverage. In the event of
termination of employment of Executive during the Term of
Employment for reasons other than death, disability, "Cause"
(defined in Paragraph 5.4), or voluntary termination other
than for "Good Reason" (defined in Paragraph 5.5), prior to
the time Executive is eligible for Medicare benefits, then
medical insurance coverage comparable to coverage provided
to officers of the Company on the date of Executive's
termination shall be provided by Company for Executive,
Executive's spouse and dependents, the full cost of which
shall be paid by Executive, until Executive is eligible for
coverage under Medicare or another group plan.
5. Termination of Employment
5.1 Death. This Agreement shall terminate automatically upon
Executive's death during the Term of Employment. In the
event of such termination, the Company shall pay to
Executive's estate within 60 days after the date of
Executive's death, all benefits and compensation accrued
under this Agreement prior to the date of Executive's death,
but will have no further obligation under this Agreement to
pay any additional base salary.
5.2 Disability. This Agreement shall terminate
automatically upon Executive's permanent total disability
during the Term of Employment. In the event of such
termination, the Company shall pay to Executive within 60
days after the date of termination under this Paragraph 5.2
all benefits and compensation accrued hereunder prior to the
date of such termination but will have no further obligation
under this Agreement to pay any additional base salary. For
the purposes of this Agreement, "total disability" means
physical or mental incapacity that qualifies Executive to
receive disability benefits under the Federal Social
Security Act and prevents Executive from engaging in any
employment with the Company or in any other employment or
occupation for remuneration or profit consistent with
Executive's qualifications and experience.
5.3 Termination by the Company without Cause. The Company may
terminate this Agreement and Executive's employment under
this Agreement without Cause at any time upon written notice
to Executive. Company shall pay Executive his base salary
accrued through the date of such termination. In the event
of termination of Executive's employment pursuant to this
Paragraph 5.3, Executive shall be relieved of his
obligations under Article 2 of this Agreement, and shall be
free to seek other employment and shall have the option
either to (i) compete without regard to the provisions of
Paragraph 8.1 or (ii) to comply with Paragraph 8.1 and
receive from the Company all payments and all benefits under
this Agreement which would have been made to him or accrued
to him in the absence of termination by the Company without
Cause. Executive shall exercise such option by a written
notice to the Company within thirty (30) days following
termination pursuant to this Paragraph 5.3. If Executive
fails to provide written notice to the Company, Executive
will be deemed to have elected to compete without regard to
the provisions of Paragraph 8. 1. In the event that
Executive elects (by notice or by default) to compete
without regard to the provisions of Paragraph 8.1, such
notice shall be accompanied by any payments made by the
Company to Executive which accrued after the date of such
termination and the Company will be relieved from any
further obligations under this Agreement.
5.4 Termination by the Company for Cause. The Company may
terminate Executive's employment for "Cause". For the
purpose of this Agreement, "Cause" for termination of
Executive means (i) the repetitive failure by the Executive
to substantially perform the Executive's duties as requested
by the Members Committee provided that the duties requested
by the Members Committee are consistent with senior
executive status in the Company and with continued residence
in Austin, Texas, (ii) any act or failure to act by
Executive which constitutes gross negligence or willful
misfeasance or malfeasance in the performance of his duties,
(iii) the conviction of Executive of a felony, (iv) conduct
by the Executive that involves theft, fraud or dishonesty,
or (v) the Executive's violation of the provisions of
Articles 7 or 8 of this Agreement. "Cause" does not include
an isolated, insubstantial and inadvertent action taken, or
failure not occurring in bad faith, and which is remedied by
Executive promptly after receipt of written notice thereof
given by the Company. If Executive's employment is
terminated for Cause or if Executive resigns voluntarily,
Company shall pay Executive his base salary accrued through
the date of such termination or resignation, whereupon
Company shall have no further obligations to Executive under
this Agreement.
5.5 Termination by Executive for Good Reason. Executive's
employment may be terminated by Executive for "Good Reason".
For purposes of this Agreement, "Good Reason" means (i) the
assignment to Executive of any duties inconsistent in a
material respect with senior executive status in the
Company; (ii) any material failure by Company to comply with
the provisions of Articles 3 and 4 of this Agreement or
(iii) any requirement by the Company that Executive relocate
to a city other than Austin, Texas, or the assignment of job
duties or responsibilities which are inconsistent with
Executive's continued residence in Austin, Texas (except for
travel reasonably required in the performance of the
Executive's job duties or responsibilities). Executive shall
not be entitled to terminate for Good Reason by reason of an
isolated, insubstantial and inadvertent action taken or
failure not occurring in bad faith and which is remedied by
the Company promptly after receipt of written notice thereof
given by Executive. The parties to this Agreement understand
that although Company has the right pursuant to Article 2 of
this Agreement to change the position, authority,
responsibilities and type of work Executive is asked to
perform, any material change which is inconsistent with
senior executive status shall entitle Executive to exercise
the termination right set out in this Paragraph 5.5.
Executive shall have a period of thirty (30) days from the
date of any event which constitutes "Good Reason" under this
Paragraph 5.5 to exercise his termination right under this
Paragraph 5.5. At the expiration of the thirty (30) day
period, the termination right under this Paragraph 5.5 is
waived with respect to that particular change but not with
respect to any additional change in position, authority,
responsibilities or type of work required by the Company. In
the event of termination of Executive's employment by
Executive for Good Reason pursuant to this Paragraph 5.5,
Executive shall be relieved of his obligations under Article
2 and shall be free to seek other employment and shall have
the option either to (i) compete without regard to the
provisions of Paragraph 8.1 (in which case Company shall be
relieved of all obligations to Executive under this
Agreement, including but not limited to the payments under
the 1996 Short-term Plan set forth in Paragraph 4.1 and the
Long-term Plan set forth in Paragraph 4.2) or (ii) receive
benefits hereunder which would have been made to him or
accrued to him in the absence of termination of this
Agreement by Executive for Good Reason. Executive shall
exercise such option by a written notice to the Company
within 30 days following termination pursuant to this
Paragraph 5.5. If Executive fails to provide written notice
to the Company, Executive will be deemed to have elected to
compete without regard to the provisions of Paragraph 8.l.
If Executive elects (by notice or by default) to compete
without regard to the provisions of Paragraph 8.1, such
notice shall be accompanied by any payments made by the
Company to Executive which accrued after the date of such
termination and the Company will be relieved from any
further obligations under this Agreement.
6. Set-Off
6.1 Set-Off. The Company shall be entitled to set off against
the amounts payable to the Executive under this Agreement,
any amounts owed to the Company by the Executive.
7. Confidential Information
7.1 Non-disclosure of Confidential Information. The Executive
agrees to hold in a fiduciary capacity for the benefit of
the Company all proprietary or confidential information,
knowledge or data relating to the Company which shall have
been obtained by Executive during Executive's employment by
the Company as well as all proprietary and confidential
information of a third party to which Executive has access
during Executive's employment by the Company, provided the
Company is under an obligation of confidence to said third
party regarding such information. During and after the end
of the Term of Employment, except as may be required by the
lawful order of a court or government agency of competent
jurisdiction, Executive shall not, without the prior written
consent of the Company, communicate or divulge any such
information, knowledge or data to anyone not bound by an
obligation of confidence to the Company, or utilize such
information, knowledge or data for any purpose other than
for the Company's benefit and, where applicable, not
communicate or divulge any third party information without
said third party's prior written permission. The Executive's
obligations under this Paragraph 7.1 shall continue for five
years following Executive's termination of employment. For
purposes of this Agreement proprietary or confidential
information does not include information which is or becomes
public knowledge through no fault of the Company or
Executive, or information that is or becomes known to others
as a result of disclosure by a person or entity other than
Executive who is not in breach of a confidentiality
obligation to the Company or, where appropriate, to a third
party in making such disclosure.
7.2 Return of Company Property. Upon the termination of
Executive's employment or at the Company's earlier request,
the Executive will promptly return to the Company any and
all records, documents, physical property, information,
computer disks or other materials relating to the business
of the Company developed or obtained by the Executive during
the Executive's course of employment with the Company.
7.3 Inventions. The Executive shall keep the Company informed
of, and shall execute such assignments as may be necessary
to transfer to the Company the benefits of, any copyrights,
inventions, discoveries, improvements, trade secrets,
developments, processes, and procedures made by the
Executive, in whole or in part, or conceived by the
Executive either alone or with others, which result from any
work which the Executive may do for or at the request of the
Company, whether or not conceived by the Executive while at
work, on holiday, on vacation, or off the premises of the
Company including such of the foregoing items that are
conceived during the course of employment and developed or
perfected after the Executive's termination of employment.
The Executive shall, without additional compensation, assist
the Company or any other person or entity nominated by it,
in an effort to obtain copyrights, patents, trademarks and
service marks and the Executive agrees to execute all
documents and to take all other actions which are necessary
or appropriate to secure to the Company the benefits
thereof. Such copyrights, patents, trademarks and service
marks shall become the property of the Company. The
Executive shall deliver to the Company all sketches,
drawings, models, figures, plans, outlines, descriptions or
other information with respect thereto.
7.4 Disclosure to Court or Agency. To the extent that any court
or government agency seeks to have the Executive disclose
proprietary or confidential information, the Executive shall
promptly inform the Company, and the Executive shall take
all reasonable steps to prevent disclosure of confidential
information until the Company has been informed of such
requested disclosure, and the Company has an opportunity to
respond to such court or government agency. To the extent
that the Executive obtains information on behalf of the
Company that may be subject to attorney-client privilege as
to the Company's attorneys, the Executive shall take all
reasonable steps to maintain the confidentiality of such
information and to preserve such privilege.
8. Covenant Not to Compete
8.1 Covenant Not to Compete. If Executive's employment
terminates during the Term of Employment for any reason,
then for the longer of one year following termination or the
unexpired portion of the Term of Employment, Executive shall
not participate in the management of, or act as a consultant
for or an employee of, or directly or indirectly perform
services (as an employee, manager, consultant, independent
contractor, advisor or otherwise) for, or invest in any
business operation, enterprise or organization which engages
in significant competition with any line of business at the
time actively conducted by the Company in any geographic
area where such business is then conducted. This Paragraph
8.1 shall not apply if Executive is terminated without Cause
under Paragraph 5.3 and provides notice under such paragraph
to have this covenant not apply. This Paragraph 8.1 shall
not apply if Executive terminates for Good Reason under
Paragraph 5.5 and provides notice under such paragraph.
9. Equitable Remedies
9.1 Remedy in the Event of Breach. Executive acknowledges that
damages are an inadequate remedy for breach of Articles 7 or
8 because of the difficulty of ascertaining the amount of
damages that would be suffered by the Company in the event
Articles 7 or 8 are breached, and Executive therefore agrees
that the Company may seek injunctive or other equitable
relief against any breach of this Agreement without bond or
any other security being required.
10. Notices and Communications
10.1 All notices and other communications under this Agreement
shall be in writing and shall be effective when hand
delivered to the other party or when sent by facsimile or
when mailed by registered or certified mail, return receipt
requested, postage prepaid, addressed to the parties at the
addresses set forth below or such other address as either
party shall have furnished to the other in writing in
accordance herewith:
In the case of the Company:
Chairman, Members Committee
c/o Radian International LLC
8501 North Mopac Boulevard
Austin, Texas 78759
FAX: (517) 636-0278
with a copy to:
The Dow Chemical Company
Attn.: Human Resources Legal
Employee Development Center
Midland, Michigan 48674
FAX: (517) 638-9793
In the case of the Executive:
Donald M. Carlton
c/o Radian International LLC
8501 North Mopac Boulevard
Austin, Texas 78759
FAX: (512) 419-6282
11. Miscellaneous
11.1 Non-assignability. The rights and obligations extended by
the Company to Executive under this Agreement are personal
to Executive and shall not be assignable by Executive
without the prior written consent of the Company.
11.2 Withholding. All compensation payable under this Agreement
shall be subject to customary withholding taxes and other
employment taxes as required with respect to compensation
paid by a corporation to an employee and the amount of
compensation payable under this Agreement shall be reduced
appropriately to reflect the amount of any required
withholding. The Company shall have no obligation to make
any payments to the Executive or to make the Executive whole
for the amount of any required taxes.
11.3 Nonalienation. The interests of the Executive under this
Agreement are not subject to the claims of the Executive's
creditors, other than the Company, and may not otherwise be
voluntarily or involuntarily assigned, alienated or
encumbered.
11.4 Waiver of Breach. The waiver by either the Company or the
Executive of a breach of any provision of this Agreement
shall not operate as or be deemed a waiver of any subsequent
breach by either the Company or the Executive. Continuation
of payments under this Agreement by the Company following a
breach by the Executive of any provision of this Agreement
shall not preclude the Company from thereafter terminating
said payments based upon the same violation.
11.5 Enforceability . This Agreement shall inure to the benefit
of and be enforceable by the parties, and their respective
heirs, personal representatives, successors and assigns.
11.6 Applicable Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the
State of Delaware.
11.7 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
11.8 Captions. The captions contained in this Agreement are not
part of the provisions of this Agreement and shall have no
force or effect.
11.9 Amendments. This Agreement may not be amended or modified
other than by written agreement executed by the parties, nor
may any provision be waived except by a writing signed by
the party waiving such provision.
11.10 Execution of Agreement. This Agreement may be executed in
duplicate originals.
11.11 Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject
matter of this Agreement.
IN WITNESS WHEREOF, Company and Executive have caused this
Agreement to be executed.
RADIAN INTERNATIONAL LLC EXECUTIVE
By: /s/ P.E. Hudson /s/ Donald M. Carlton
Name: P. E. Hudson Donald M. Carlton
Title: Treasurer (Interim)
Date: January 30, 1996 Date: