Exhibit 10.31

AMENDED AND RESTATED

MBIA INC. DEFERRED COMPENSATION AND EXCESS BENEFIT PLAN

(Formerly the MBIA Inc. 2005 Deferred Compensation and Excess Benefit Plan and
the MBIA

Inc. Pre-2005 Deferred Compensation and Excess Benefit Plan)

WHEREAS, MBIA Inc. maintains the MBIA Inc. 2005 Deferred Compensation and Excess
Benefit Plan (the “2005 Plan”) and the MBIA Inc. Deferred Compensation and
Excess Benefit Plan (the “Pre-2005 Plan”; hereinafter the 2005 Plan and the
Pre-2005 Plan are collectively referred to as the MBIA Inc. Deferred
Compensation and Excess Benefit Plan (the “Plan”));

WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (“Section
409A”), among other things, imposes certain limitations and restrictions on the
times at which certain types of deferred compensation, including benefits under
the Plan, may be payable and the forms of payment of such deferred compensation;

WHEREAS, all documents that provide for the payment of deferred compensation
subject to Section 409A must be brought into written compliance with the
requirements of Section 409A on or before December 31, 2008, or the employee to
whom such compensation is payable will be subjected to certain adverse tax
consequences, including, but not limited to, having to pay an additional Federal
income tax of 20% on such deferred compensation;

WHEREAS, the 2005 Plan has previously been adopted to provide that amounts
deferred on or after January 1, 2005 be so deferred in compliance with
Section 409A under a plan that is in written compliance with 409A;

WHEREAS, the Company has previously amended the Pre-2005 Plan to provide that
all amounts deferred under the Pre-2005 Plan shall be subject to the terms and
provisions of the 2005 Plan and that the operative terms and provisions of the
Pre-2005 Plan shall be deemed amended to contain the terms and provisions,
mutatis mutandis, contained in the 2005 Plan, as the 2005 Plan may be amended
from time to time;

WHEREAS, the Board has authorized any of the Company’s Chief Financial Officer,
Chief Administrative Officer and General Counsel (the “Authorized Officers”), in
the name and on behalf of the Company to execute and deliver such agreements,
certificates and other instruments and documents (including, but not limited
restating and/or merging the 2005 Plan document and the Pre-2005 Plan document),
in such form and with such terms and provisions as any such officer may approve,
his, her or their execution and delivery thereof to be conclusive evidence of
such approval, and to take such other actions as any of them may deem necessary
or appropriate, in each case, to carry out the transactions contemplated by, and
the intent and purposes of, the Board’s resolutions; and

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WHEREAS, the Authorized Officers desire to restate the Plan to incorporate the
Board’s resolutions;

NOW THEREFORE, the Company hereby amends and restates the Plan as follows:

1. Purpose.

The purpose of the Plan is to permit selected employees of MBIA Inc. to defer
compensation and to permit all affected employees to receive benefits, subject
to the terms and conditions hereof, which could not otherwise be provided in
accordance with the terms of the Money Purchase Plan and the 401(k) Plan by
reason of the benefit limitation and nondiscrimination provisions of the Code.

2. Definitions.

(a) “Account” means the account maintained by the Company for the benefit of any
one Participant as described in Section 4 below. A Participant’s Account shall
include, as may be applicable, any elective deferrals, Discretionary
Contributions, Excess Allocations, and Company Matching Contributions credited
on behalf of such Participant.

(b) “Beneficiary” means any person or persons, estate or trust designated in
accordance with Section 7 below, to receive the amount payable under this Plan
upon the death of a Participant.

(c) “Board” means the Board of Directors of the Company.

(d) “Change of Control” shall have the meaning set forth in Section 4(h).

(e) “Code” means the Internal Revenue Code of 1986, as amended, or any
subsequent income tax law of the United States. References to Code sections
shall be deemed to include all subsequent amendments of those sections or the
corresponding provisions of any subsequent income tax law.

(f) “Committee” means the Compensation and Organization Committee of the Board,
as such committee may be constituted from time to time.

(g) “Company” means MBIA Inc., its successors and assigns and any Subsidiary.

 

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(h) “Compensation” means the aggregate salary and annual bonus paid to a
Participant in any Plan Year (including amounts that would have been paid to him
but for his election to defer part or all of such amounts under this or any
other plan of deferred compensation of the Company) for services rendered as an
employee; provided, however, that amounts earned by an employee before becoming
a Participant shall be excluded.

(i) “Corporate Event” shall have the meaning set forth in Section 4(h)(iii).

(j) “Deferral Election” means the election described in Section 3(a) below.

(k) “Disability” means any medically determined physical or mental impairment
which is expected to last for a continuous period of not less than 12 months,
and which results in the Participant (i) being absent from work for a continuous
period of not less than 12 months and (ii) receiving income replacement benefits
for a period of not less then 3 months under an accident and health plan
maintained for the Company’s employees.

(l) “Discretionary Contribution” means amounts credited by the Company to a
Participant’s Account pursuant to Section 3(e) below.

(m) “Effective Date” means January 1, 2005.

(n) “Eligible Employee” means any employee of the Company selected by the
Committee to participate in the Plan, based on the office or position held by
the employee, the employee’s degree of responsibility for and opportunity to
contribute to the growth and success of the Company, the employee’s term of
service and such other factors as the Committee may deem proper and relevant,
and who is eligible to make “Elective Contributions” under the 401(k) Plan.
Notwithstanding the foregoing, with respect to Excess Allocations, the term
“Eligible Employee” shall include each employee whose benefits under the Money
Purchase Plan or the 401(k) plan are limited by reason of the application of
Section 415 of the Code.

(o) “Excess Allocation” shall mean an allocation to a Participant’s Account
pursuant to Section 3(d) in lieu of a contribution under the Money Purchase
Plan.

(p) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

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(q) “401(k) Plan” means the MBIA Inc. Employees 401(k) Plan, as it may be
amended from time to time, and any successor plan thereto or similar plan or
plans established by the Company.

(r) “Incumbent Directors” shall have the meaning set forth in Section 4(h)(ii).

(s) “Matching Contributions” means amounts credited by the Company to a
Participant’s Account pursuant to Section 3(b) below.

(t) “Maximum Elective Contributions” shall have the meaning set forth in
Section 3(a)(ii) below.

(u) “Money Purchase Plan” means the MBIA Inc. Employees Pension Plan, as it may
be amended from time to time, and any successor plan thereto or similar plan or
plans established by the Company.

(v) “Non-Qualified Deferral Percentage” shall have the meaning set forth in
Section 3(a)(ii), below.

(w) “Participant” means any Eligible Employee from and after the date his
Elective Deferrals become effective or with respect to whom an Account is being
maintained. Notwithstanding the foregoing, the term Participant shall also
include any employee who is an Eligible Employee only with respect to Excess
Allocations.

(x) “Phantom Fund” means a mutual fund or other investment vehicle which shall
be used to determine the hypothetical investment experience of all or a portion
of a Participant’s Account under the Plan.

(y) “Plan Year” means the calendar year.

(z) “Subsidiary” means a corporation, the majority of the voting stock of which
is owned directly or indirectly by the Company.

(aa) “Valuation Date” means the last day of any calendar quarter.

(bb) “Year of Service” means a Plan Year in which a Participant works at least
1,000 hours.

3. Participation.

(a) Deferred Compensation.

(i) An Eligible Employee may make an irrevocable election with respect to any
Plan Year to have a portion of his Compensation for such year deferred under
this Plan (a “Deferral Election”). Any such election shall be:

(A) made no later than the end of the Plan Year preceding the Plan Year during
which the services giving rise to the compensation are performed, to be
effective with the first pay period in such subsequent Plan Year, except as
provided in Section 3(a)(iii)or 3(a)(iv) below; and

 

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(B) subject to such other terms and conditions as are determined by the
Committee.

(ii) An Eligible Employee making a Deferral Election shall indicate the
aggregate percentage of his salary and bonus to be withheld and deferred under
both the 401(k) Plan and this Plan. The portion of any such deferrals to be
contributed under the 401(k) Plan shall be determined pursuant to Section 4.2 of
the 401(k) Plan and the remaining portion (the “Non-Qualified Deferral
Percentage”) shall be deferred under this Plan, by holding back such
Non-Qualified Deferral Percentage from each payment of the Participant’s salary
and bonus during the applicable Plan Year. With respect to any Plan Year, in no
event shall the actual amount deferred under this Plan pursuant to a
Participant’s Deferral Election exceed the difference between (A) the aggregate
amount elected for deferral under this Section 3(a)(ii) and (B) the maximum
amount of elective deferrals permitted to be made by such Participant (including
any catch-up contributions) under the 401(k) Plan pursuant to Section 402(g) of
the Code (the “Maximum Elective Contributions”).

(iii) Notwithstanding anything in Section 3(a)(i) above, subject to such
additional rules as the Committee shall establish from time to time, an Eligible
Employee who, pursuant to the requirements of Section 409A of the Code is
eligible to make a Deferral Election with respect to compensation that
constitutes “performance-based compensation” within the meaning of Section 409A
of the Code may make a Deferral Election in respect of such performance-based
compensation not later than six months before the end of the performance period,
provided that the Participant performs services continuously from the later of
the beginning of the performance period or the date the performance criteria are
established through the date the Deferral Election is made and provided further
that, in no event may an election to defer performance-based compensation be
made after such compensation has become “readily ascertainable” within the
meaning of the regulations promulgated under Section 409A of the Code.

 

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(iv) An employee who does not participate and is not otherwise eligible to
participate in an “Account Balance Plan” of the Company within the meaning of
Section 409A of the Code who first becomes an Eligible Employee during a Plan
Year may make an initial Deferral Election within 30 days of first becoming
eligible to participate in the Plan. Such election shall be effective only with
respect to compensation in respect of services performed after the date on which
the Eligible Employee makes the election and, with respect to deferrals of
performance-based compensation made after the performance period has begun,
shall apply only to the portion of the compensation that is attributable on a
pro rata basis to the portion of the performance period that follows such
election.

(v) A Deferral Election shall be effective for the Plan Year to which it relates
and for each future Plan Year until revoked or changed for future Plan Years;
provided that no Deferral Election may be revoked or changed after the Plan Year
to which it relates has commenced.

(b) Matching Contributions. The Company shall make a Matching Contribution on
behalf of any Participant making a Deferral Election in the amount of one dollar
for each dollar deferred pursuant to his Deferral Election, provided that for
any payroll period the total of the Company’s Matching Contributions under this
Section 3(b) shall not exceed (i) five percent of the Participant’s Compensation
for such payroll period minus (ii) the amount that would be contributed on the
Participant’s behalf under the 401(k) Plan had the Participant elected to
contribute the Maximum Elective Contributions ratably from each payroll period
over the Plan Year. Matching Contributions shall be credited to each
Participant’s Account as of the end of the payroll period with respect to which
the corresponding amount is withheld pursuant to the Participant’s Deferral
Election.

(c) Limitation on Deferrals. For any Plan Year, the amount a Participant defers
under the Plan pursuant to a Deferral Election shall not exceed the difference
of (A) thirty percent of such Participant’s Compensation for such Plan Year
minus (B) the Maximum Elective Contributions.

(d) Excess Allocation. Each employee who is eligible to participate in the Money
Purchase Plan and who is credited with contributions under such Money Purchase
Plan for a given Plan Year which are less than the amount which would have been
contributed but for any limitation imposed under the Code, including, but not
limited to, the provisions of Sections 401(a)(4), 401(a)(17) and 415, shall have
an Excess Allocation credited to his Account at such time as, and in an amount
equal to that amount of, the prohibited contribution which would have been made
under the Money Purchase Plan but for such limitations.

 

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(e) Discretionary Contributions. Notwithstanding anything in this Plan to the
contrary, the Company may make one or more additional contributions on behalf of
any Participant in such amounts as may be determined by the Committee. Unless
the Committee shall determine that the Participant does not otherwise have a
legally binding right to such contributions (within the meaning of Section 409A
of the Code) at the time the commitment is made in respect of such
contributions, the Participant’s right to be credited with any such
contributions shall be established in a calendar year prior to the calendar year
in which services relevant to such contributions are to be performed.

4. Participant Accounts and Allocations.

(a) Accounts. The Company shall establish and maintain an Account for each
Participant and shall make additions to and subtractions from such Account as
provided in this Section 4. At the times provided in Sections 3(a)(ii), 3(b),
3(d) and 3(e) above, each Participant’s Account shall be credited with:

(i) any amount withheld and deferred under this Plan pursuant to his Deferral
Election,

(ii) any Matching Contributions made by the Company,

(iii) any Excess Allocation creditable for a Plan Year, and

(iv) any Discretionary Contributions made by the Company.

(b) Additions to Account. Compensation allocated to a Participant’s Account
pursuant to this Section 4 shall be credited to such Account as of the date such
compensation would otherwise have been paid to the Participant.

(c) Designation of Phantom Investment Funds. The Committee shall select one or
more Phantom Funds which shall be used to determine the hypothetical investment
experience of Participants’ Accounts under the Plan; provided, however, that
unless the Committee otherwise determines, the hypothetical investment
experience for any calendar quarter shall be based upon the average of the
long-term component of the Lehman Brothers Government/Corporate Bond Index for
the preceding three (3) months.

(d) Investment Election. In the event the Company establishes multiple Phantom
Funds, each Participant (or, during the period in which installment payments are
being made under Section 6, each Beneficiary) shall from time to time designate
on a form approved by the Committee the Phantom Fund or Funds that shall
determine the investment experience with respect to such Participant’s Account;
provided, however, that the Committee may require that the Participant’s Account
be

 

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credited or debited as though such Account were invested in the same Phantom
Funds, and in the same percentages, as such Participant’s account balance is
invested from time to time under the 401(k) Plan. The Committee may, in its
discretion, (i) establish minimum amounts (in terms of dollar amounts or a
percentage of a Participant’s Account), which may be allocated to any Phantom
Fund, (ii) preclude any Participant who is an executive officer of the Company
from designating any Phantom Fund which invests primarily in securities issued
by the Company, (iii) establish rules regarding the time at which any such
election (or any change in such election permitted under Section 4(e)) shall
become effective, and (iv) permit different designations with respect to a
Participant’s existing Account balance and amounts to be credited to such
Account under Section 4(b) after the date the election form is filed with the
Company. If a Participant (or Beneficiary, if applicable) fails to make a valid
election with respect to any portion of his Account (or if any such election
ceases to be effective for any reason), such Participant (or Beneficiary) shall
be deemed to have elected to have his entire Account deemed invested in the
Phantom Fund which the Committee determines generally to have the least risk of
loss of principal.

(e) Change in Designation of Phantom Fund. Effective as of the first business
day of the calendar quarter commencing more than 10 business days after the
proper form is filed with the Company (or such other time as the Committee shall
require or permit), a Participant (or, during the period in which installments
are being made under Section 6, a Beneficiary) may change the Phantom Funds
designated with respect to all or any portion of such Participant’s Account. Any
such change shall comply with all rules applicable with respect to any initial
designation of such Phantom Funds.

(f) Crediting of Phantom Investment Experience. As of the end each day (or such
other time as the Committee shall establish from time to time), each
Participant’s Account shall be credited or debited, as the case may be, with an
amount equal to the net investment gain or loss which such Participant would
have realized had he actually invested in each Phantom Fund an amount equal to
the portion of his Account designated as deemed invested in such Phantom Fund
during that calendar quarter (or such other period as may have been established
by the Committee). In the event the balance of a Participant’s Account is to be
distributed in installments pursuant to Section 5(a), or, subsequent to a
Participant’s death, pursuant to Section 6, the balance of such Account shall
continue to be credited (or charged) with the hypothetical investment experience
provided for in this Section 4(f) until the entire amount subject to installment
distribution has been paid.

(g) No Actual Investment. Notwithstanding anything else in this Section 4 to the
contrary, no amount standing to the credit of any Participant’s Account shall be
set aside or invested in any actual fund on behalf of such Participant;
provided, however, that, nothing in this Section 4(g) shall be deemed to
preclude the Company from making investments for its own account in any Phantom
Funds (whether directly or through a grantor trust) to assist it in meeting its
obligations to the Participants (or Beneficiaries) hereunder.

 

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(h) Vesting of Accounts. A Participant’s right to amounts withheld and deferred
under this Plan pursuant to his Deferral Election, together with any earnings
thereon, shall at all times be fully vested. A Participant’s right to Matching
Contributions and any Excess Allocation made on his behalf under Sections 3(b)
and 3(d) above, and unless otherwise determined by the Committee, Discretionary
Contributions under Section 3(e), together with any earnings thereon, shall
become vested in accordance with the following schedule:

 

Participant’s Years of Service

   Vested
Percentage  

1

   0 %

2

   20 %

3

   60 %

4

   80 %

5

   100 %

Upon a Participant’s termination of employment for any reason, that portion of
his Account which has not become vested pursuant to the above schedule shall be
forfeited. Amounts thus forfeited shall not be reallocated to other
Participants.

Notwithstanding the vesting schedule above, or any other provision of this
Section 4(h), a Participant shall be 100% vested with respect to Matching
Contributions and any Excess Allocation made on his behalf under Sections 3(b)
and 3(d) above, and unless otherwise determined by the Committee, Discretionary
Contributions under Section 3(e), together with any earnings thereon, upon a
“Change of Control” (as defined below). A “Change of Control” shall mean the
happening of any of the following:

(i) The acquisition by any person (within the meaning of Section 3(a)(9) the
Exchange Act, including any group (within the meaning of Rule 13d-5(b) under the
Exchange Act), but excluding any of the Company, any Subsidiary or any employee
benefit plan sponsored or maintained by the Company or any Subsidiary, of
“beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company’s securities; or

 

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(ii) Within any 24-month period, the persons who were directors of the Company
at the beginning of such period (the “Incumbent Directors”) shall cease to
constitute at least a majority of the Board or the board of directors of any
successor to the Company; provided, however, that any director elected to the
Board, or nominated for election, by a majority of the Incumbent Directors then
still in office shall be deemed to be an Incumbent Director for purposes of this
subclause (ii); or

(iii) Upon the consummation of a merger, consolidation, share exchange,
division, sale or other disposition of all or substantially all of the assets of
the Company which has been approved by the shareholders of the Company (a
“Corporate Event”), and immediately following the consummation of which the
stockholders of the Company immediately prior to such Corporate Event do not
hold, directly or indirectly, a majority of the voting power of (x) in the case
of a merger or consolidation, the surviving or resulting corporation, (y) in the
case of a share exchange, the acquiring corporation or (z) in the case of a
division or a sale or other disposition of assets, each surviving, resulting or
acquiring corporation which, immediately following the relevant Corporate Event,
holds more than 25% of the consolidated assets of the Company immediately prior
to such Corporate Event.

(i) Statements of Accounts. A Participant may request a written statement of the
value of his Account as of the last day of any Plan Year. Upon receipt of such
request, the Company shall furnish said statement as soon as practicable after
the later of:

(i) the date on which a request is received, or

(ii) the last day of the Plan Year to which the request relates.

5. Distribution of Accounts.

(a) Method and Time of Distributions.

(i) Upon a separation from service (within the meaning of Section 409A of the
Code) of a Participant from the Company for any reason, the Committee shall
determine the value of the Participant’s Account as of the Valuation Date
coincident with or next succeeding the date of the Participant’s separation from
service based on such Participant’s account balance under the Plan (as
determined in accordance with the terms of the Plan), and shall cause the vested
portion of such Participant’s Account to be distributed in one lump sum during
the 90 day period commencing immediately following such Valuation Date.

 

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(ii) Upon the death or Disability of a Participant, the Committee shall
determine the value of the Participant’s Account as of the Valuation Date
coincident with or next succeeding the date of the Participant’s death or
Disability based on such Participant’s account balance under the Plan (as
determined in accordance with the terms of the Plan), and shall cause the vested
portion of such Participant’s Account to be distributed in one lump sum during
the 90 day period commencing immediately following such Valuation Date.

(iii) Notwithstanding the foregoing, other than with respect to Discretionary
Contributions, a Participant may elect to receive a distribution from his or her
Account in a number of annual installments (such number not to exceed 10) as the
Participant shall designate, if such election is made at the time of the initial
Deferral Election or in an amended Deferral Election pursuant to Section 5(b)
below, and subject to such other conditions as the Committee may impose. Unless
a Participant otherwise elects an alternative commencement date pursuant to
rules as established by the Committee, in the case of any distribution being
made in annual installments, the first installment payable hereunder shall be
paid no later than the end of the first calendar month of the Plan Year
immediately following the Participant’s death, Disability or separation from
service and each subsequent installment shall be paid no later than the end of
the first calendar month of each succeeding Plan Year until the entire amount
subject to such installment election shall have been paid. Any installment
payments hereunder shall be calculated in a uniform and non-discriminatory
manner as may be determined by the Committee from time to time in a manner
consistent with Section 409A of the Code.

(iv) Notwithstanding Section 5(a)(i) above, a Participant who is a “specified
employee” under Section 409A of the Code may not receive distributions in
connection with a separation from service earlier than 6 months after the date
of such separation and any distribution that would have been made to such
employee within such 6 month period shall instead be made on the first business
day following such 6 month period.

(v) In lieu of distributions upon a separation from service, death or
disability, as set forth in clauses (i), (ii) and (iii) of this Section 5(a), a
Participant may, subject to such other conditions and limitations as the
Committee or its delegate may impose, elect (i) to receive a distribution from
his or her Account in one lump-sum payment, or in such number of annual
installments (not to exceed ten) as the Participant may designate and (ii) the
year in with such lump sum shall be paid or such annual installment payments
shall commence (with each subsequent annual installment made during each
succeeding year). Such election may also specify that payment shall be made (or
commence to be made) as of the earlier or the later of such pre-determined year
and the date on which the

 

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Participant experiences a separation from service, death, and/or Disability. Any
such election shall be made at the time of the initial Deferral Election or in
an amended Deferral Election pursuant to Section 5(b) below). Any installment
payments hereunder shall be calculated in a uniform and non-discriminatory
manner as may be determined by the Committee or its delegate from time to time
in a manner consistent with Section 409A of the Code.

(vi) The right to a series of installment payments under this Plan shall be
treated as a right to a series of separate payments within the meaning of
Section 409A.

(b) Amendment of Distribution Election.

(i) A Participant may, at any time and from time to time during active
employment, elect to change the method in which distributions from his or her
Account shall be made from that determined under Section 5(a) to any other
method of distribution that would have been permitted under Section 5(a);
provided, however, that (A) no such amended Deferral Election shall be effective
unless it is filed not later than one year prior to the date the first payment
otherwise would have been paid and (B) installment payments and any lump sum
payment made pursuant to the amended Deferral Elections shall not begin until at
least 5 years after the first payment otherwise would have been paid. Such
election shall take effect one year after the amended Deferral Election is made
and shall be subject to such other conditions as the Committee may impose. Any
election made pursuant to this Section 5(b) that does not meet the conditions
specified herein (or any other conditions imposed by the Committee) shall be
void and without effect and any distribution to the Participant shall be made at
the time and in the form determined under Section 5(a). For purposes of this
Section 5(b)(i), a Participant may change the method in which Discretionary
Contributions are distributed to any method permitted for Deferral Elections.

(ii) In Plan Year 2006, a Participant may elect to change the method in which
distributions from his or her Account shall be made from that determined under
Section 5(a) to any other method of distribution that would have been permitted
under Section 5(a) without regard to Section 5(b)(i)(A) or Section 5(b)(i)(B),
above, provided that no such amendment shall (A) change a Deferral Election with
respect to distributions that the Participant otherwise would receive in Plan
Year 2006 or (B) cause a distribution to occur in 2006.

(iii) In Plan Year 2007, a Participant may elect to change the method in which
distributions from his or her Account shall be made from that determined under
Section 5(a) to any other method of distribution that would have been permitted
under Section 5(a) without regard to Section 5(b)(i)(A) or Section 5(b)(i)(B),
above, provided that no such amendment shall (A) change a Deferral Election with
respect to distributions that the Participant otherwise would receive in Plan
Year 2007 or (B) cause a distribution to occur in 2007.

 

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(iv) In Plan Year 2008, a Participant may elect to change the method in which
distributions from his or her Account shall be made from that determined under
Section 5(a) to any other method of distribution that would have been permitted
under Section 5(a) without regard to Section 5(b)(i)(A) or Section 5(b)(i)(B),
above, provided that no such amendment shall (A) change a Deferral Election with
respect to distributions that the Participant otherwise would receive in Plan
Year 2008 or (B) cause a distribution to occur in 2008.

(c) Crediting of Investment Experience on Installment Payments. Where a
Participant receives the balance of his Account in annual installments, the
amount of each installment shall reflect the investment experience as provided
for in Section 4(b).

(d) Distributions for Unforeseeable Emergencies. During a Participant’s
employment with the Company or during the period in which installment payments
are being made to a Participant under Section 5(a) (or, subsequent to a
Participant’s death, to a Beneficiary under Section 6), a Participant (or, if
applicable, a Beneficiary) may request that all or a portion of the vested
amount credited to the Participant’s Account be distributed to him. Such a
distribution shall be permitted only on account of an “unforeseeable emergency”
as defined in Section 409A(a)(2)(B)(ii) of the Code. The amount distributed
shall not exceed the amounts necessary to satisfy the emergency plus amounts
necessary to pay taxes reasonably anticipated as a result of the distribution,
after taking into account the extent to which the unforeseeable emergency is or
may be relieved through reimbursement or compensation by insurance or otherwise
or by liquidation of the participant’s assets (to the extent the liquidation of
the assets would not itself cause severe financial hardship), or any other
limits set by Section 409A of the Code. Payment with respect to an unforeseeable
emergency shall be made 10 days following the date on which the request for
distribution is received by the Company. The Participant (or Beneficiary) shall
provide the Committee with financial data to support his request for
distribution and shall certify as to the financial need and the availability of
funds from other resources. Any action on a Participant’s (or Beneficiary’s)
request will be within the exclusive discretion of the Committee. Such decision
shall be final and binding on all interested parties. If a distribution for an
unforeseeable emergency occurs other than on a Valuation Date, the amount
distributed shall reduce the Participant’s Account as of the immediately
preceding Valuation Date.

(e) Termination of Accounts. Upon a complete distribution of a Participant’s
Account, such Account shall be terminated.

(f) Acceleration of Payment. Notwithstanding anything in the Plan to the
contrary, neither the Participant nor the Company may change the Participant’s

 

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Distribution Election so as to accelerate the date of distribution, other than
as described in Section 5(b)(ii), Section 5(g) or Section 6 or otherwise permit
a deferral or distribution in violation of Section 409A of the Code.

(g) Change of Control. Notwithstanding the foregoing, upon a Change of Control
(as defined in Section 4(h)) that also constitutes a “change in control” within
the meaning of Section 409A of the Code, a Participant’s Account shall
immediately be distributed to a Participant in a lump sum distribution within 15
days following the occurrence of such Change of Control.

6. Distribution on Death. If a Participant shall die before payment of all
amounts credited to such Participant’s Account has been completed, the total
unpaid balance then credited to such Participant’s Account shall be paid to the
Participant’s designated Beneficiary or Beneficiaries or to the legal
representative of the Participant’s estate as provided in Section 7 in a single
lump-sum payment during the 90 day period commencing with the date of the
Participant’s death. Notwithstanding the foregoing, at the time he or she
becomes a Participant or at the time and subject to the conditions specified in
Section 5(b), a Participant may elect that upon such Participant’s death the
unpaid balance credited to such Participant’s Account shall be distributed in
such number of annual installments (not to exceed 10) as the Participant may
designate.

7. Designation of Beneficiary.

Unless a Participant shall designate a different beneficiary in accordance with
this Section 7, in the event of the death of the Participant, the Beneficiary
designated by the Participant to receive such Participant’s benefits under the
MBIA Inc. Employees’ Pension Plan shall receive the amount which the Participant
would have been entitled to receive pursuant to Section 5 above. A Participant
may at any time designate a Beneficiary solely for the purposes of this Plan
(subject to such limitations as to the classes and number of Beneficiaries and
contingent Beneficiaries and such other limitations as the Committee may from
time to time prescribe) or revoke or change any designation of Beneficiary. No
such designation shall be valid unless in writing and signed by the Participant,
dated and filed with the Company. Any such designation shall be controlling over
any testamentary or other disposition. In the case of a failure of a designation
or the death of a Beneficiary without a designated successor, distribution shall
be made to the legal representative of the Participant, in which case, the
Company, the Committee and any members thereof shall not be under any further
liability to any other person.

8. Administration of this Plan.

(a) Authority of Committee. Except as otherwise expressly provided herein, full
power and authority to construe, interpret and administer this Plan shall be
vested in the Committee. All expenses of administering this Plan shall be paid
by the

 

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Company. The Committee shall adopt such rules, regulations, policies and
practices as it considers desirable for the conduct of its business and the
administration of this Plan, provided they do not conflict with this Plan. The
Committee may at any time terminate, amend, modify or suspend such rules,
regulations, policies and practices as it, in its sole discretion, may determine
in connection with the administration of or the performance of its
responsibilities under this Plan. The Committee may delegate responsibility with
respect to the administration and operation of the Plan to such employees or
group of employees of the Company as it shall determine. The Committee or its
delegates may hire such agents and consultants, including legal counsel, as it
or they shall determine to be necessary or appropriate to fulfill its or their
duties hereunder.

(b) Determination of Committee. Each determination made pursuant to the
provisions of this Plan by the Committee shall be final and shall be binding and
conclusive for all purposes and upon all persons.

(c) Notices and Elections. All notices given and elections made under this Plan
shall be deemed given or made when received by the Committee.

(d) Operation of the Plan; Good Faith Compliance with Section 409A. From the
Effective Date and until December 31, 2008, this Plan has been and will be
administered by the Committee in accordance as has been and will be necessary to
assure good faith compliance with Section 409A of the Code during such period.

9. Rights of Participants to Accounts.

Anything to the contrary notwithstanding, nothing contained herein shall be
deemed to create a trust of any kind or create any fiduciary relationship.
Amounts deemed invested under this Plan shall continue for all purposes to be
part of the general funds of the Company and no person other than the Company
shall, by virtue of the provisions of this Plan, have any interest in such
funds. To the extent that any person acquires the right to receive payments from
the Company under this plan, such right shall be no greater than the right of
any unsecured general creditor of the Company.

10. Amendment of this Plan.

The Committee shall have the right to amend or modify this Plan at any time and
from time to time; provided, however, that no such amendment or modification
shall affect any right or obligation with respect to any deferral or allocation
previously made.

11. Code Section 409A.

Notwithstanding anything else in the Plan, all deferrals hereunder are intended
to comply with Section 409A of the Code.

 

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12. No Right to Continued Employment.

Neither the establishment of this Plan nor any payment hereunder nor any action
of the Company or of the Committee shall be held or construed to confer upon a
Participant any right to continued employment with the Company, nor shall it
interfere in any way with the right of the Company to terminate a Participant’s
employment at any time.

13. Withholding.

The Company shall provide for the withholding of any taxes required to be
withheld by federal, state or local law in respect of any payment or
distribution made pursuant to this Plan.

14. Inalienability of Accounts.

Except as otherwise required or permitted by law, a Participant’s Account shall
not be assignable or otherwise transferable, or subject to surrender,
anticipation, the debts of any person, or legal process.

15. Governing Law.

This Plan shall be governed by the laws of the State of New York without regard
to the principles of conflict of laws.

 

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