Exhibit 10.80

MBIA INC.

KEY EMPLOYEE EMPLOYMENT PROTECTION PLAN

1. Purpose. The purpose of the MBIA Inc. Key Employee Employment Protection Plan
(the “Plan”) is to assure MBIA Inc. of the services of key executives during any
change in ownership or control of the Company and to provide such executives
certain financial assurances to enable them to perform the responsibilities of
their positions without undue distraction and to exercise their judgment without
bias due to personal circumstances. This Plan is intended to be, and shall be
administered as, an employee welfare benefit plan as defined in Section 3(1) of
ERISA.

2. Definitions.

(a) “Agreement” means the Key Employee Employment Protection Agreement between
the Participant and the Company whereby Participant agrees to be bound by the
covenants described in Section 12 of the Plan.

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

(c) “Cause” means (i) the willful failure by the Participant to perform
substantially his duties under Section 3 of the Agreement (other than due to
physical or mental illness) after reasonable notice to the Participant of such
failure, (ii) the Participant’s engaging in serious misconduct that is injurious
to the Company or any subsidiary of the Company in any way, including, but not
limited to, by way of damage to their respective reputations or standings in
their respective industries, (iii) the Participant’s having been convicted of,
or entered a plea of nolo contendere to, a crime that constitutes a felony or
(iv) the breach by the Participant of any written covenant or agreement with the
Company or any subsidiary of the Company not to disclose or misuse any
information pertaining to, or misuse any property of, the Company or any
subsidiary of the Company or not to compete or interfere with the Company or any
subsidiary of the Company.

(d) “Change of Control” means:

(i) any person (within the meaning of Section 3(a)(9) of the Securities Exchange
Act of 1934, as amended (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 of the Company or any employee benefit plan sponsored or
maintained by the Company or any subsidiary of the Company, acquires “beneficial
ownership” (within the meaning of Rule 13d-3 under the

 

- 1 -

--------------------------------------------------------------------------------

Exchange Act), directly or indirectly, of securities of the Company representing
25% or more of the combined Voting Power of the Company’s Voting Securities; or

(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 (other than in compromise of a proxy contest or to avoid such
contest) 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 in (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.

(e) “Change of Control Date” means the date on which the Change of Control is
deemed to occur.

(f) “Committee” means the Compensation & Organization Committee of the Board or
such other committee of the Board as the Board shall designate from time to
time; provided that, in respect of any period after any Change of Control Date,
the Committee shall mean the Committee as in office and as constituted
immediately prior to the Change of Control.

(g) “Company” means MBIA Inc., a Connecticut corporation, and any successor
thereto.

(h) “Date of Termination” means (i) in the case of a termination for which a
Notice of Termination is required, the date of receipt of such Notice of
Termination or, if later, the date specified therein, as the case may be, and
(ii) in all other cases, the actual date on which a Participant’s employment
terminates during the Employment Period.

 

- 2 -

--------------------------------------------------------------------------------

(i) “Disability” means the Participant has met the conditions to qualify for
long-term disability benefits under the Company’s policies, as in effect
immediately prior to the Change of Control Date.

(j) “Effective Date” means the date on which the Agreement becomes effective.

(k) “Employee” means any employee or officer of the Company.

(l) “Employment Period” has the meaning specified in Section 4 hereof.

(m) “Good Reason” means the occurrence of any of the following, without the
express written consent of the affected Participant, after the occurrence of a
Change of Control:

(i) the assignment to the Participant of any duties inconsistent in any material
adverse respect with the Participant’s position, authority or responsibilities
as contemplated by Section 5 of this Plan, or any other material adverse change
in such position, including titles, authority or responsibilities;

(ii) any failure by the Company to comply with any of the provisions of
Section 6 of this Plan, other than an insubstantial or inadvertent failure
remedied by the Company promptly after receipt of notice thereof given by the
Participant;

(iii) the Company’s requiring the Participant to be based at any office or
location more than 50 miles (or such other distance as shall be set forth in the
Company’s relocation policy as in effect at the Effective Time) from (x) that
location at which he performed his services immediately prior to the Change of
Control and (y) the Participant’s residence immediately prior to the Change of
Control, except for travel reasonably required in the performance of the
Participant’s responsibilities; or

(iv) any failure by the Company to obtain the assumption and agreement to
perform this Agreement by a successor as contemplated by Section 13(b).

With respect to the person or persons serving as the Chief Executive Officer of
the Company at the time of a Change of Control, and to any other Participant
that the Committee shall designate, the definition of Good Reason shall also
include the Participant’s voluntary termination of employment at any time during
the 30-day period commencing on the first anniversary of the date on which a
Change of Control occurs.

 

- 3 -

--------------------------------------------------------------------------------

(n) “Governing Documents” means the Company’s Certificate of Incorporation and
By-Laws.

(o) “Notice of Termination” means a written notice of a Participant’s
termination of employment which (i) indicates the specific termination provision
in this Plan relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Participant’s
employment under the provision so indicated, and (iii) if the termination date
is other than the date of receipt of such notice, specifies the termination date
of the Agreement (which date shall be not more than 15 days after the giving of
such notice).

(p) “Participant” means an Employee who is designated to participate in the Plan
pursuant to Section 3 of the Plan.

(q) “Performance-Vesting Restricted Stock” means awards of restricted stock of
MBIA Inc. which vests based on achievement of predetermined performance goals.

(r) “Potential Change of Control” means:

(i) a Person commences a tender offer (with adequate financing) for securities
representing at least 15% of the Voting Power of the Company’s securities;

(ii) the Company enters into an agreement the consummation of which would
constitute a Change of Control;

(iii) proxies for the election of directors of the Company are solicited by
anyone other than the Company; or

(iv) any other event occurs which is deemed to be a Potential Change of Control
by the Board. Notwithstanding the foregoing, if, after a Potential Change of
Control and before a Change of Control, the Board makes a good faith
determination that such Potential Change of Control will not result in a Change
of Control, the Board may nullify the effect of the Potential Change of Control
(a "Nullification") by resolution (a "Nullification Resolution"), in which case
the Participant shall have no further rights and obligations under this
Agreement by reason of such Potential Change of Control; provided, however, that
if the Participant shall have delivered a Notice of Termination prior to the
date of the Nullification Resolution, such Resolution shall not effect the
Participant’s rights hereunder.

(s) “Time-Vesting Restricted Stock” means awards of restricted stock of MBIA
Inc. which vests based solely on the passage of time.

 

- 4 -

--------------------------------------------------------------------------------

(t) “Voting Power” means such number of the Voting Securities as shall enable
the holders thereof to cast such percentage of all the votes which could be cast
in an annual election of directors.

(u) “Voting Securities” means all securities of a company entitling the holders
thereof to vote in an annual election of directors.

3. Eligibility. Each Employee of the Company who is a direct report of the Chief
Executive Officer whom he or she designates as a member of senior management of
the Company and who is approved by the Committee and each other Employee as the
Committee may from time to time designate as a Participant, shall participate in
the Plan.

4. Employment Period. Subject to Section 7 of this Plan, the Company agrees to
continue the Participant in its employ for the period (the “Employment Period”)
commencing on the Change of Control Date and ending on the second anniversary of
the Change of Control Date.

5. Position and Duties.

(a) No Reduction in Position. During the Employment Period, a Participant’s
position (including titles), authority and responsibilities shall be at least
commensurate with those held, exercised and assigned to the Participant
immediately prior to the Change of Control Date. It is understood that, for
purposes of this Plan, such position, authority and responsibilities shall not
be regarded as not commensurate merely by virtue of the fact that a successor
shall have acquired all or substantially all of the business and/or assets of
the Company as contemplated by Section 13(b) of this Plan. A Participant’s
services shall be performed at the location where the Participant was employed
immediately preceding the Change of Control Date.

(b) Business Time. From and after the Effective Date, a Participant shall devote
his full attention during normal business hours to the business and affairs of
the Company and shall use his best efforts to perform faithfully and efficiently
the responsibilities assigned to him hereunder, to the extent necessary to
discharge such responsibilities, except for (i) time spent in managing his
personal, financial and legal affairs and serving on corporate, civic or
charitable boards or committees, in each case only if and to the extent not
substantially interfering with the performance of such responsibilities, and
(ii) periods of vacation and sick leave to which he is entitled. It is expressly
understood and agreed that a Participant’s continuing to serve on any boards and
committees on which he is serving or with which he is otherwise associated
immediately preceding the Change of Control Date shall not be deemed to
interfere with the performance of the Participant’s services to the Company.

 

- 5 -

--------------------------------------------------------------------------------

6. Compensation.

(a) Base Salary. During the Employment Period, a Participant shall receive a
base salary at a monthly rate at least equal to the monthly salary paid to the
Participant by the Company and any of its affiliated companies immediately prior
to the Change of Control Date. The base salary shall be reviewed at least once
each year after the Change of Control Date, and may be increased (but not
decreased) at any time and from time to time by action of the Board or any
committee thereof or any individual having authority to take such action in
accordance with the Company’s regular practices. The Participant’s base salary,
as it may be increased from time to time, shall hereafter be referred to as
“Base Salary”. Neither the Base Salary nor any increase in Base Salary after the
Change of Control Date shall serve to limit or reduce any other obligation of
the Company hereunder.

(b) Annual Bonus. During the Employment Period, in addition to the Base Salary,
for each fiscal year of the Company ending during the Employment Period, each
Participant shall be afforded the opportunity to receive an annual bonus on
terms and conditions no less favorable to the Participant (taking into account
reasonable changes in the Company’s goals and objectives and taking into account
actual performance) than the annual bonus opportunity that had been made
available to the Participant for the fiscal year ended immediately prior to the
Change of Control Date (the “Annual Bonus Opportunity”). Any amount payable in
respect of the Annual Bonus Opportunity shall be paid as soon as practicable
following the year for which the amount is earned or awarded, unless electively
deferred by the Participant pursuant to any deferral programs or arrangements
that the Company may make available to the Participant.

(c) Long-term Incentive Compensation Programs. During the Employment Period,
each Participant shall participate in all long-term incentive compensation
programs for key executives at a level that is commensurate with the
Participant’s participation in such plans immediately prior to the Change of
Control Date, or, if more favorable to the Participant, at the level made
available to the Participant or other similarly situated officers at any time
thereafter.

(d) Benefit Plans. During the Employment Period, each Participant (and, to the
extent applicable, his dependents) shall be entitled to participate in or be
covered under all pension, retirement, deferred compensation, savings, medical,
dental, health, disability, group life and accidental death insurance plans and
programs of the Company and its affiliated companies at a level that is
commensurate with the Participant’s participation in such plans immediately
prior to the Change of Control Date, or, if more favorable to the Participant,
at the level made available to the Participant or other similarly situated
officers at any time thereafter; provided that, in the event of an across the
board change in the level of benefits available to all employees, each
Participant shall be entitled to participate at the level made available to
other similarly situated officers after giving effect to such change.

 

- 6 -

--------------------------------------------------------------------------------

(e) Expenses. During the Employment Period, each Participant shall be entitled
to receive prompt reimbursement for all reasonable expenses incurred by the
Participant in accordance with the policies and procedures of the Company as in
effect immediately prior to the Change of Control Date. Notwithstanding the
foregoing, the Company may apply the policies and procedures in effect after the
Change of Control Date to the Participant, if such policies and procedures are
not less favorable to the Participant than those in effect immediately prior to
the Change of Control Date.

(f) Vacation and Fringe Benefits. During the Employment Period, each Participant
shall be entitled to paid vacation and fringe benefits at a level that is
commensurate with the paid vacation and fringe benefits available to the
Participant immediately prior to the Change of Control Date, or, if more
favorable to the Participant, at the level made available from time to time to
the Participant or other similarly situated officers at any time thereafter.

(g) Indemnification. During and after the Employment Period, the Company shall
indemnify each Participant and hold each such Participant harmless from and
against any claim, loss or cause of action arising from or out of the
Participant’s performance as an officer, director or employee of the Company or
any of its Subsidiaries or in any other capacity, including any fiduciary
capacity, in which the Participant serves at the request of the Company to the
maximum extent permitted by applicable law and the Company’s Governing
Documents, provided that in no event shall the protection afforded to the
Participant under the Plan be less than that afforded under the Governing
Documents as in effect immediately prior to the Change of Control Date, except
to the extent that any such claim, loss, or cause of action resulted from such
Participant’s bad faith, gross negligence or willful misconduct.

(h) Office and Support Staff. Each Participant shall be entitled to an office
with furnishings and other appointments during the employment period, and to
secretarial and other assistance, at a level that is at least commensurate with
the foregoing provided to other similarly situated officers.

7. Termination.

(a) Death, Disability or Retirement. A Participant’s participation in this Plan
shall terminate automatically upon such Participant’s death, termination due to
Disability or voluntary retirement under any of the Company’s retirement plans
as in effect from time to time.

(b) Voluntary Termination. Notwithstanding anything in this Plan to the
contrary, following a Change of Control a Participant may, upon not less than 60
days’ written notice to the Company, voluntarily terminate employment for any
reason (including early retirement under the terms of any of the Company’s
retirement plans as in effect from time to time), provided that any termination
by a Participant pursuant to

 

- 7 -

--------------------------------------------------------------------------------

Section 7(d) on account of Good Reason shall not be treated as a voluntary
termination under this Section 7(b).

(c) Cause. The Company may terminate the Participant’s employment for Cause. Any
termination by the Company for Cause shall be communicated by Notice of
Termination to the Participant in accordance with Section 14(h).

(d) Good Reason. Following the occurrence of a Change of Control, the
Participant may terminate his employment for Good Reason. In no event shall the
mere occurrence of a Change of Control, absent any further impact on a
Participant, be deemed to constitute Good Reason. Any termination by a
Participant for Good Reason shall be communicated by Notice of Termination to
the Company in accordance with Section 14(h) within 90 days of the Participant’s
having actual knowledge of the events giving rise to such termination. The
failure by a Participant to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason shall not waive any
right of the Participant hereunder or preclude the Participant from asserting
such fact or circumstance in enforcing his rights hereunder.

8. Obligations of the Company upon Termination.

(a) Death or Disability. If a Participant’s employment is terminated during the
Employment Period by reason of the Participant’s death or Disability, the
Agreement shall terminate without further obligations to the Participant or the
Participant’s legal representatives under this Plan or the Agreement other than
those obligations accrued hereunder at the Date of Termination, and the Company
shall pay to the Participant (or his beneficiary or estate) (i) the
Participant’s full Base Salary through the Date of Termination (the “Earned
Salary”), (ii) any vested amounts or benefits owing to the Participant under the
Company’s otherwise applicable employee benefit plans and programs, including
any compensation previously deferred by the Participant (together with any
accrued earnings thereon) and not yet paid by the Company and any accrued
vacation pay not yet paid by the Company (the "Accrued Obligations”), and
(iii) any other benefits payable due to the Participant’s death or Disability
under the Company’s plans, policies or programs (the “Additional Benefits”). Any
Earned Salary shall be paid in cash in a single lump sum as soon as practicable,
but in no event more than 10 days (or at such earlier date required by law),
following the Date of Termination. Accrued Obligations and Additional Benefits
shall be paid in accordance with the terms of the applicable plan, program or
arrangement.

(b) Cause and Voluntary Termination. If, during the Employment Period, the
Participant’s employment is terminated for Cause or voluntarily terminated by
the Participant (other than on account of Good Reason following a Change of
Control), the Company shall pay the Participant (i) the Earned Salary in cash in
a single lump sum as soon as practicable, but in no event more than 10 days,
following the Date of

 

- 8 -

--------------------------------------------------------------------------------

Termination, and (ii) the Accrued Obligations in accordance with the terms of
the applicable plan, program or arrangement.

(c) Termination by the Company other than for Cause and Termination by the
Participant for Good Reason.

(i) Severance and Other Termination Payments. If (x) the Company terminates a
Participant’s employment other than for Cause during the Employment Period or
(y) a Participant terminates his employment at any time during the Employment
Period for Good Reason, the Company shall pay the Participant the following:

(A) the Participant’s Earned Salary; and

(B) an amount (the “Pro-Rated Annual Incentive”) equal to the average of the
annual bonuses payable to the Participant for the two fiscal years of the
Company ended prior to the Change of Control Date for which bonuses have been
determined (the “Average Annual Bonus”) multiplied by a fraction, the numerator
of which is the number of months in such fiscal year which have elapsed on or
before (and including) the last day of the month in which the Date of
Termination occurs and the denominator of which is 12; and

(C) the Accrued Obligations; and

(D) a cash amount (the “Severance Amount”) equal to two times the sum of (1) the
Participant’s annual Base Salary; (2) an amount equal to the Average Annual
Bonus.

The Earned Salary and Pro-Rated Annual Incentive shall be paid in cash in a
single lump sum as soon as practicable, but in no event more than 10 days (or at
such earlier date required by law), following the Date of Termination. The
Accrued Obligations shall be paid in accordance with the terms of the applicable
plan, program or arrangement. The Severance Amount shall be paid in cash in a
single lump sum on the date that is six months and one day after the Date of
Termination.

(ii) Continuation of Benefits. If (x) the Company terminates a Participant’s
employment other than for Cause during the Employment Period or (y) a
Participant terminates his employment at any time during the Employment Period
for Good Reason, the Participant (and, to the extent applicable, his dependents)
shall be entitled, after the Date of Termination until the earlier of (1) the
second anniversary of the Date of Termination (the “End Date”) and (2) the date
the Participant becomes

 

- 9 -

--------------------------------------------------------------------------------

eligible for comparable benefits under a similar plan, policy or program of a
subsequent employer, to continue participation in all of the Company’s group
health and group life employee benefits plans (the “Group Benefit Plans”). To
the extent any such benefits cannot be provided under the terms of the
applicable plan, policy or program, the Company shall provide a comparable
benefit under another plan or from the Company’s general assets. The
Participant’s participation in the Group Benefit Plans will be on the same terms
and conditions (including, without limitation, any condition that the
Participant make contributions toward the cost of such coverage on the same
terms and conditions generally applicable to similarly situated employees) that
would have applied had the Participant continued to be employed by the Company
through the End Date.

(iii) Time-Vesting Restricted Stock. Any and all awards of Time-Vesting
Restricted Stock held by the Participant at the Date of Termination shall
immediately become fully vested.

(iv) Performance-Vesting Restricted Stock. Performance Vesting Restricted Stock
shall vest to the extent provided in the award agreement granting such
Performance-Vesting Restricted Stock.

(v) Post-Termination Exercise Period. Notwithstanding anything else contained in
Article 5 of the Company’s 2000 Stock Option Plan or in any Company equity
incentive plan to the contrary, in the event that the Participant is entitled to
receive the severance benefits described above pursuant to the terms of the
Plan, all of his outstanding Options or SARs under such 2000 Stock Option Plan
or any Company equity incentive plan shall automatically be and become fully
exercisable on the Date of Termination without further action on anyone’s part
and the Participant shall have the right to exercise any such Option or SAR
until the earlier to occur of the expiration of the term of such Option or SAR
and the fifth anniversary of the Date of Termination.

(vi) Retirement Contribution Credits. The Participant shall receive credits to
the Company’s nonqualified excess benefits plan in an amount equal to the amount
that would otherwise have been contributed on the Participant’s behalf had the
Participant remained employed for two years following the Date of Termination.

(vii) Outplacement Services. The Participant shall be provided at the Company’s
expense with outplacement services customary for executives at his level
(including, without limitation, office space and telephone support services)
provided by a qualified and experienced third party provider selected by the
Company, up to a maximum of $50,000.

 

- 10 -

--------------------------------------------------------------------------------

(d) Discharge of the Company’s Obligations. Except as expressly provided in the
last sentence of this Section 8(d), the amounts payable to a Participant
pursuant to this Section 8 following termination of his employment shall be in
full and complete satisfaction of the Participant’s rights under this Plan and
any other claims he may have in respect of his employment by the Company or any
of its Subsidiaries. Such amounts shall constitute liquidated damages with
respect to any and all such rights and claims and, upon the Participant’s
receipt of such amounts, the Company shall be released and discharged from any
and all liability to the Participant in connection with this Plan or otherwise
in connection with the Participant’s employment with the Company and its
Subsidiaries. Nothing in this Section 8(d) shall be construed to release the
Company from its commitment to indemnify the Participant and hold the
Participant harmless from and against any claim, loss or cause of action arising
from or out of the Participant’s performance as an officer, director or employee
of the Company or any of its Subsidiaries or in any other capacity, including
any fiduciary capacity, in which the Participant served at the request of the
Company to the maximum extent permitted by applicable law and the Governing
Documents.

(e) Certain Further Payments by the Company.

(i) In the event that any amount or benefit paid or distributed to any
Participant pursuant to this Plan, taken together with any amounts or benefits
otherwise paid or distributed to the Participant by the Company or any
affiliated company (collectively, the "Covered Payments”), are or become subject
to the tax (the “Excise Tax”) imposed under Section 4999 of the Internal Revenue
Code of 1986, as amended (the “Code”), or any similar tax that may hereafter be
imposed, and the total amount of the Covered Payments equals or exceeds three
times the “base amount” (as defined in section 280G of the Code) by at least
10%, the Company shall pay to the Participant at the time specified in
Section 8(e)(v) below an additional amount (the “Tax Reimbursement Payment”)
such that the net amount retained by the Participant with respect to such
Covered Payments, after deduction of any Excise Tax on the Covered Payments and
any Federal, state and local income or employment tax and Excise Tax on the Tax
Reimbursement Payment provided for by this Section 8(e), but before deduction
for any Federal, state or local income or employment tax withholding on such
Covered Payments, shall be equal to the amount of the Covered Payments.

(ii) In the event the Covered Payments are or become subject to the Excise Tax
under section 4999 of the Code or any similar tax that may hereafter be imposed,
but such Covered Payments exceed three times the base amount by less than 10% of
such base amount, the Company will

 

- 11 -

--------------------------------------------------------------------------------

reduce the Covered Payments to such amount as would not subject Participant to
the Excise Tax.

(iii) For purposes of determining whether any of the Covered Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (A) such Covered
Payments will be treated as “parachute payments” within the meaning of
Section 280G of the Code, and all “parachute payments” in excess of the “base
amount” (as defined under Section 280G(b)(3) of the Code) shall be treated as
subject to the Excise Tax, unless, and except to the extent that, in the good
faith judgment of the Company’s independent certified public accountants
appointed prior to the Change of Control Date or tax counsel selected by such
Accountants (the “Accountants”), the Company has a reasonable basis to conclude
that such Covered Payments (in whole or in part) either do not constitute
“parachute payments” or represent reasonable compensation for personal services
actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in
excess of the “base amount,” or such “parachute payments” are otherwise not
subject to such Excise Tax, and (B) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Accountants in accordance
with the principles of Section 280G of the Code.

(iv) For purposes of determining the amount of the Tax Reimbursement Payment,
the Participant shall be deemed to pay: (A) Federal income taxes at the highest
applicable marginal rate of Federal income taxation for the calendar year in
which the Tax Reimbursement Payment is to be made, and (B) any applicable state
and local income taxes at the highest applicable marginal rate of taxation for
the calendar year in which the Tax Reimbursement Payment is to be made, net of
the maximum reduction in Federal income taxes which could be obtained from the
deduction of such state or local taxes if paid in such year.

(v) In the event that the Excise Tax is subsequently determined by the
Accountants or pursuant to any proceeding or negotiations with the Internal
Revenue Service to be less than the amount taken into account hereunder in
calculating the Tax Reimbursement Payment made, the Participant shall repay to
the Company, at the time that the amount of such reduction in the Excise Tax is
finally determined, the portion of such prior Tax Reimbursement Payment that
would not have been paid if such Excise Tax had been applied in initially
calculating such Tax Reimbursement Payment, plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code.

Notwithstanding the foregoing, in the event any portion of the Tax Reimbursement
Payment to be refunded to the Company has been paid to

 

- 12 -

--------------------------------------------------------------------------------

any Federal, state or local tax authority, repayment thereof shall not be
required until actual refund or credit of such portion has been made to the
Participant, and interest payable to the Company shall not exceed interest
received or credited to the Participant by such tax authority for the period it
held such portion. The Participant and the Company shall mutually agree upon the
course of action to be pursued (and the method of allocating the expenses
thereof) if the Participant’s good faith claim for refund or credit is denied.
In the event that the Excise Tax is later determined by the Accountants or
pursuant to any proceeding or negotiations with the Internal Revenue Service to
exceed the amount taken into account hereunder at the time the Tax Reimbursement
Payment is made (including, but not limited to, by reason of any payment the
existence or amount of which cannot be determined at the time of the Tax
Reimbursement Payment), the Company shall make an additional Tax Reimbursement
Payment in respect of such excess (plus any interest or penalty payable with
respect to such excess) at the time that the amount of such excess is finally
determined.

(vi) The Tax Reimbursement Payment (or portion thereof) provided for in
Section 8(e)(i) above shall be paid to the Participant not later than 10
business days following the payment of the Covered Payments; provided, however,
that if the amount of such Tax Reimbursement Payment (or portion thereof) cannot
be finally determined on or before the date on which payment is due, the Company
shall pay to the Participant by such date an amount estimated in good faith by
the Accountants to be the minimum amount of such Tax Reimbursement Payment and
shall pay the remainder of such Tax Reimbursement Payment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as
the amount thereof can be determined, but in no event later than 45 calendar
days after payment of the related Covered Payment. In the event that the amount
of the estimated Tax Reimbursement Payment exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by the Company
to the Participant, payable on the fifth business day after written demand by
the Company for payment (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code).

9. Non-exclusivity of Rights. Except as expressly provided herein, nothing in
this Plan shall prevent or limit any Participant’s continuing or future
participation in any benefit, bonus, incentive or other plan or program provided
by the Company or any of its affiliated companies and for which the Participant
may qualify, nor shall anything herein limit or otherwise prejudice such rights
as the Participant may have under any other agreements with the Company or any
of its affiliated companies, including employment agreements or stock option
agreements. Amounts which are vested benefits or which any

 

- 13 -

--------------------------------------------------------------------------------

Participant is otherwise entitled to receive under any plan or program of the
Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan or program.

10. No Offset. The Company’s obligation to make the payments provided for under
this Plan and otherwise to perform its obligations hereunder shall not be
affected by any circumstances, including, without limitation, any set-off,
counterclaim, recoupment, defense or other right which the Company may have
against a Participant or others whether by reason of the subsequent employment
of the Participant or otherwise.

11. Legal Fees and Expenses. If any Participant asserts any claim in any contest
(whether initiated by the Participant or by the Company) as to the validity,
enforceability or interpretation of any provision of this Plan or the Agreement
and the Participant prevails on such claim in a proceeding before an arbitrator
referred to in Section 14(e) or a court of competent jurisdiction, then the
Company shall pay the Participant’s legal expenses (or cause such expenses to be
paid) including, without limitation, his reasonable attorney’s fees, upon
presentation of proof of such expenses in a form acceptable to the Company.

12. Confidential Information, Company Property. By and in consideration of the
salary and benefits to be provided by the Company hereunder, including the
severance arrangements set forth herein, each Participant shall enter into an
Agreement with the Company whereby the Participant shall agree that:

(a) Confidential Information. Each Participant shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, (i) obtained by the Participant during his
employment by the Company or any of its affiliated companies and (ii) not
otherwise public knowledge (other than by reason of an unauthorized act by the
Participant). After termination of a Participant’s employment with the Company,
the Participant shall not, without the prior written consent of the Company,
unless compelled pursuant to an order of a court or other body having
jurisdiction over such matter, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.

(b) Non-Competition. For two years after the Date of Termination, a Participant
shall not, except with the prior written consent of the Board, directly or
indirectly, own any interest in, operate, join, control or participate as a
partner, director, principal, officer, or agent of, enter into the employment
of, act as a consultant to, or perform any services for any entity which has
operations that compete in any material respect with the Business of the
Company. Notwithstanding anything herein to the contrary, the foregoing shall
not prevent the Participant from acquiring as an investment securities
representing not more than two percent (2%) of the outstanding voting securities
of any publicly held corporation.

 

- 14 -

--------------------------------------------------------------------------------

(c) Non-Disparagement. During the Employment Period and at any time thereafter,
Participant shall not, directly or indirectly, engage in any conduct or make any
statement, whether in commercial or noncommercial speech, disparaging or
criticizing in any way the Company or any of its affiliates any products or
services offered by any of these, nor shall he engage in any other conduct or
make any other statement that could be reasonably expected to impair the
goodwill of any of them, in each case except to the extent required by law, and
then only after consultation with the Company.

(d) Nonsolicitation of Employees. For two years after the Date of Termination, a
Participant shall not attempt, directly or indirectly, to induce any employee of
the Company, or any subsidiary or any affiliate thereof to be employed or
perform services elsewhere or otherwise to cease providing services to the
Company, or any subsidiary or affiliate thereof.

(e) Nonsolicitation of Clients. During the Employment Period and for two years
after the Date of Termination, Participant shall not, directly or indirectly,
for his own account or for the account of any other Person, in any jurisdiction
in which the Company or any of its affiliates has commenced or made plans to
commence operations, solicit or otherwise attempt to establish any business
relationship of a nature that is competitive with the business or relationship
of the Company or any of its affiliates with any person throughout the world
which is or was a customer, client or distributor of the Company or any of its
affiliates at any time during which Participant was employed by the Company (in
the case of any such activity during such time) or during the twelve-month
period preceding the Date of Termination (in the case of any such activity after
the Date of Termination), other than any such solicitation on behalf of the
Company or any of its affiliates during the Employment Period.

(f) Company Property. Except as expressly provided herein, promptly following a
Participant’s termination of employment, such Participant shall return to the
Company all property of the Company and all copies thereof in the Participant’s
possession or under his control.

(g) Injunctive Relief and Other Remedies with Respect to Covenants. The
covenants and obligations of each Participant with respect to confidentiality
and Company property relate to special, unique and extraordinary matters and a
violation of any of the terms of such covenants and obligations will cause the
Company irreparable injury for which adequate remedies are not available at law.
Therefore, the Company shall be entitled to an injunction, restraining order or
such other equitable relief (without the requirement to post bond) restraining a
Participant from committing any violation of the covenants and obligations
contained in this Section 12. These remedies are cumulative and are in addition
to any other rights and remedies the Company may have at law or in equity. In no
event shall an asserted violation of the provisions of this Section 12
constitute a basis for deferring or withholding any amounts otherwise payable to
the Participant under this Plan or the Agreement.

 

- 15 -

--------------------------------------------------------------------------------

(h) In the event the Participant breaches any provision of this Section 12 in
any material respect following the Date of Termination, in addition to any
remedy at law or in equity, the Participant shall (i) not be entitled to
receive, if not already paid, the benefits described in Section 8 hereof, and
(ii) return to the Company any and all payments previously made by the Company
(or any of its affiliates) pursuant to Section 8 hereof within 15 days after
written demand for such repayment is made to Participant by the Company.

13. Successors.

(a) Each Participant’s rights under this Plan and the Agreement are personal to
the Participant and, without the prior written consent of the Company, shall not
be assignable by the Participant other than by will or the laws of descent and
distribution. The Agreement shall inure to the benefit of and be enforceable by
a Participant’s legal representatives.

(b) This Plan and the Agreement shall inure to the benefit of and be binding
upon the Company and its successors. The Company shall require any successor to
all or substantially all of the business and/or assets of the Company, whether
direct or indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, by an agreement in form and substance satisfactory to the
Participant, expressly to assume and agree to maintain this Plan and perform in
the same manner and to the same extent as the Company would be required to
perform under the Agreement if no such succession had taken place.

14. Miscellaneous.

(a) Administration. The Plan shall be administered by the Committee. The
Committee shall have full and complete authority to interpret the Plan and to
make all determinations hereunder relating to the participation and eligibility
of eligible Employees for benefits, including, but not limited to, making
determinations as to eligibility for benefits or to participate in the Plan, the
amount of benefits payable, the time at which benefits cease to be payable, and
other comparable issues. The Committee may delegate any of its authority and
responsibilities, subject to Committee review and to the extent permitted by
law, to any officer or committee of officer(s) of the Company. The
determinations made by the Committee or its delegate shall be final, binding and
conclusive on all persons affected thereby, including, but not limited to, each
Participant and the Company. The Company and/or the Committee, as the case may
be, shall maintain such procedures and records as each deems necessary or
appropriate. Each Participant shall receive a copy of the Plan, and written
confirmation of his or her participation thereunder.

 

- 16 -

--------------------------------------------------------------------------------

(b) Applicable Law. Except to the extent that they may be preempted by Federal
law, this Plan shall be governed by and construed in accordance with the laws of
the State of New York, applied without reference to principles of conflict of
laws.

(c) Gender and Number. Except when otherwise indicated by the context, words in
the masculine gender used in the Plan shall include the feminine gender, the
singular shall include the plural, and the plural shall include the singular.

(d) Effective Date of the Plan. This Plan shall become effective on the date
approved by the Committee.

(e) Arbitration. Except to the extent provided in Section 12(g), any dispute or
controversy arising under or in connection with the Plan shall be resolved by
binding arbitration. The arbitration shall be held in the city of White Plains,
New York and, except to the extent inconsistent with this Agreement, shall be
conducted in accordance with the Expedited Employment Arbitration Rules of the
American Arbitration Association then in effect at the time of the arbitration
(or such other rules as the parties may agree to in writing), and otherwise in
accordance with principles which would be applied by a court of law or equity.
The arbitrator shall be acceptable to both the Company and the Participant
involved in such arbitration. If the parties cannot agree on an acceptable
arbitrator, the dispute shall be heard by a panel of three arbitrators, one
appointed by each of the parties and the third appointed by the other two
arbitrators.

(f) Amendments. This Plan may be amended, modified or terminated at any time;
provided that any amendment which occurs within one year of a Change of Control
and which reduces the benefits available under the Plan in respect of any
Employees participating in the Plan at the date such amendment is adopted shall
be void and without effect; provided further that any such amendment,
modification or termination which adversely affect the rights of any Participant
shall be agreed to, in writing, by such Participant.

(g) Entire Agreement. This Plan and the Agreement constitute the entire
agreement between the parties hereto with respect to the matters referred to
herein. No other agreement relating to the terms of any Participant’s employment
by the Company, oral or otherwise, shall be binding between the parties unless
it is in writing and signed by the party against whom enforcement is sought.
There are no promises, representations, inducements or statements between the
parties other than those that are expressly contained herein.

(h) Notices. All notices and other communications hereunder shall be in writing
and shall be given by hand-delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

 

- 17 -

--------------------------------------------------------------------------------

If to a Participant, at the home address of the Participant noted on the records
of the Company

 

If to the Company:      

MBIA Inc.

113 King Street

Armonk, New York 10504

Attn.: Secretary

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

(i) Tax Withholding. The Company shall withhold from any amounts payable under
this Plan such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.

(j) Severability; Reformation. In the event that one more of the provisions of
this Plan shall become invalid, illegal or unenforceable in any respect, the
validity, legality, and enforceability of the remaining provisions contained
herein shall not be affected thereby. In the event that any of the provisions of
Section 12 is not enforceable in accordance with its terms, such Section shall
be reformed to make such Section enforceable in a manner which provides the
Company the maximum rights permitted at law.

(k) Survival. The provisions of Sections 8 and 12 shall survive the termination
of the Employment Period hereunder and shall be binding upon and enforceable
against the Company or a Participant, as the case may be, in accordance with its
terms. In the event that any dispute arises with respect to the Participant’s
entitlement to such enhanced retirement benefits, the dispute resolutions
provisions contained in Section 14(c) and the legal fees provision contained in
Section 11 shall also survive the end of the Employment Period and shall be
applied as though the dispute arose within the Employment Period.

(l) Headings. The headings of this Plan are not part of the provisions hereof
and shall have no force or effect.

 

MBIA Inc.      /s/ Gary C. Dunton     

By: Gary C. Dunton

Title: CEO

  

Adopted as of November 8, 2006 and amended as of February 27, 2007

 

- 18 -