Form of MBIA Inc. 2000 Stock Option Plan



 Exhibit 10.65 
  
 FORM OF 
  
 MBIA INC. 2000 STOCK OPTION PLAN 
 NONQUALIFIED STOCK OPTION AGREEMENT 
  
 EXECUTIVE OFFICERS 
  
 NONQUALIFIED STOCK OPTION
AGREEMENT, between MBIA Inc., a Connecticut corporation (the “Company”) and
                                        
(the “Agreement”), under the Company’s 2000 Stock Option Plan, as the same may be amended from time to time (the “Plan”). 
  
 1. Confirmation of Grant; Option Price. The Company hereby confirms the grant to you, effective as of
                                        
(the “Grant Date”), of options (the “Options”) to purchase              shares of the Company’s Common Stock, par value $1.00 per share (“Common
Stock”) at an option price of $         per share (the “Option Price”). The Options are not intended to be incentive stock options under Section 422 of the Internal Revenue Code of 1986,
as amended. This Agreement is subject in all respects to the terms of the Plan, which are made a part of and incorporated into this Agreement. Terms used in this Agreement with initial capital letters, but not defined herein, shall have the same
meanings as under the Plan. 
  
 2. Exercisability. Except
as otherwise provided in this Agreement, the Options shall become exercisable, subject to the provisions hereof, as follows: 40% of the Options shall become exercisable on the second anniversary of the Grant Date and the remaining 60% of the Options
shall become exercisable in equal 20% installments on each of the third, fourth and fifth anniversaries of the Grant Date. Unless an earlier termination date is specified in accordance with Section 4, the Options shall terminate on the tenth
anniversary of the Grant Date (the “Normal Expiration Date”). 
  
 3. Method of Exercise and Payment. You may exercise any portion of the Options that has become exercisable by (i) written notice of exercise to the Company’s Secretary in the form attached as Exhibit A hereto and (ii) either (A)
paying the exercise price in full in cash or cash equivalents, including by personal check, or (B) entering into other arrangements with the Company to ensure payment of the exercise price. The exercise price may also be paid in whole or in part in
shares of Common Stock held by you for at least six months, based on the Fair Market Value of such Common Stock on the date of exercise. As soon as practicable after receipt of a written exercise notice and payment of the exercise price of any
exercisable Options, the Company shall deliver to you a certificate or certificates representing the shares of Common Stock acquired upon the exercise thereof. In the event that the Committee shall determine that any certificates issued under this
Section 3 must bear a legend restricting the transfer of such Common Stock, such certificates shall bear the appropriate legend. 
  
 4. Termination of Employment. 
  
 (a) Death or Disability. In the event that your employment with the Company or any of its Subsidiaries terminates by reason of your death or
Disability, then 100% of the Options shall be exercisable as of the date of such termination, and such Options may be exercised by you or your beneficiary as designated in accordance with Section 8, at any time on or before the earlier to occur of
(i) the Normal Expiration Date or (ii) the first anniversary of your death or termination of employment due to Disability. 
  
 (b) Termination for Cause. In the event that your employment with the Company or any of its Subsidiaries is terminated for Cause, all of your
unexercised Options (whether or not then exercisable) shall terminate and be canceled immediately upon such termination of employment. Your right to exercise any Options hereunder shall be suspended during any period in which the Company is
conducting any investigation to determine whether Cause exists for the termination of your employment. In the event that such 
  

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 investigation results in a determination that Cause exists for a termination of your employment, all of your unexercised
Options (whether or not then exercisable) shall terminate and be canceled immediately upon such determination. 
  
 (c) Other Termination of Employment. Unless otherwise determined by the Committee, in the event that your employment with the Company or any of its
Subsidiaries terminates for any reason other than (i) your death or Disability or (ii) for Cause, then all of your Options that are exercisable at the date of your termination of employment may be exercised at any time prior to the
expiration of the term of the Options or the ninetieth day following your termination of employment, whichever period is shorter, and any Options that are not exercisable at the time of your termination of employment shall be immediately forfeited.

  
 (d) Forfeiture of Options. If, after your termination
of employment, the Committee determines that, either during or after your employment by the Company or any of its Subsidiaries, you engaged in conduct that (i) would have permitted the Company or any of its Subsidiaries to terminate your
employment for Cause had you still been employed or (ii) otherwise results in damage to the business or reputation of the Company or any of its Subsidiaries, all of the Options that are still outstanding at the time of such determination
shall immediately terminate and be canceled immediately upon such determination by the Committee. Upon such a determination by the Committee, the Company may disregard any attempted exercise of the Options by notice delivered prior to such
determination, if, at such time, the Company had not completed the steps necessary to effect such exercise. In such case, the Company shall only be obligated to return to you any amounts or shares of Common Stock remitted in order to exercise such
Options. 
  
 5. Change of Control. 
  
 (a) Accelerated Vesting and Payment. Unless the Committee shall
otherwise determine in the manner set forth in Section 5(b), in the event of a Change of Control each Option shall become fully exercisable (regardless of whether such Options are at such time otherwise exercisable) and the Committee may, in its
discretion, provide that each Option shall be canceled in exchange for a payment in cash of an amount equal to the excess, if any, of the Change of Control Price over the Option Price. 
  
 (b) Alternative Awards. Notwithstanding Section 5(a), no cancellation, acceleration of exercisability, vesting or
cash settlement or other payment shall occur with respect to any Option if the Committee reasonably determines in good faith, prior to the occurrence of a Change of Control, that such Option shall be honored or assumed, or new rights substituted
therefore (such honored, assumed or substituted award being hereinafter referred to as an “Alternative Award”), provided that any such Alternative Award must: 
  
 (i) be based on stock which is traded on an established securities market, or that the Committee reasonably
believes will be so traded within 60 days after the Change of Control; 
  
 (ii) provide you with rights and entitlements substantially equivalent to or better than the rights, terms and conditions applicable under such Option, including, but not limited to, an identical or better exercise
and vesting schedule and identical or better timing and methods of payment; 
  
 (iii) have substantially equivalent economic value to such Option (determined at the time of the Change of Control); and 
  
 (iv) have terms and conditions which provide that in the event that your employment is involuntarily or constructively terminated within
two years following a Change of Control, except if your employment is terminated for Cause, any conditions on your rights under, or any restrictions on transfer or exercisability applicable to, each such Alternative Award shall be waived or shall
lapse. 
  
 (c) Key Employee Agreement. Notwithstanding
anything contained herein or in the Plan to the contrary, to the extent that you are entitled to receive the severance benefits described in Section 7(c) of the Key Employee Protection Agreement (the “Key Employee Agreement”) between you
and the company, (i) the Options granted hereunder (unless such Options shall already have become exercisable pursuant to Section 
  

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 5(a) above upon a Change of Control, in which case such Options shall be so exercisable as of such Change of Control), or
any Alternative Award, shall automatically be and become fully exercisable on the Date of Termination (as defined in the Key Employee Agreement) without any further action on anyone’s part and (ii) you shall the right to exercise any such
Option or any such Alternative Award until the earlier to occur of the expiration of the term of the Options or the expiration of the term of such Alternative Award and the fifth anniversary of such Date of Termination. 
  
 For purposes of this Section 5(b), a “constructive termination”
shall mean a termination of employment by you following a material reduction in your base salary or your incentive compensation opportunity or a material reduction in your responsibilities, in either case without your written consent. 
  
 6. Tax Withholding. Whenever Common Stock is to be issued pursuant to
the exercise of an Option, the Company shall have the power to withhold, or require you to remit, an amount sufficient to satisfy Federal, state, and local withholding tax requirements relating to such transaction, and the Company may defer payment
of cash or issuance of Common Stock until such requirements are satisfied. The Committee may permit you to elect, subject to such conditions as the Committee shall impose, (i) to have shares of Common Stock otherwise issuable upon the
exercise of an Option withheld or (ii) to deliver to the Company previously acquired shares of Common Stock having a Fair Market Value as of the date of exercise sufficient to satisfy the estimated total Federal, state, and local tax
obligation associated with the transaction. 
  
 7.
Nontransferability of Awards. No Options granted hereby may be sold, transferred, pledged, assigned, encumbered or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution; provided, however,
that you may transfer the Options to any of your Family Members (including, without limitation, pursuant to a domestic relations order). In order to transfer any options to any Family Member, you must sign and deliver to the Secretary of MBIA a
completed Stock Option Transfer Form attached as Exhibit B hereto. Following your death, all rights with respect to Options shall be exercised by your designated beneficiary (or, if applicable, your estate). 
  
 8. Beneficiary Designation. You may from time to time name any
beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid or by whom any right under this Agreement is to be exercised in case of your death. Each designation will revoke all prior
designations, shall be in a form reasonably acceptable to the Company, and will be effective only when filed in writing with the Secretary of the Company during your lifetime. 
  
 9. Adjustment of the Number of Option Shares. The number, class and exercise price of any outstanding Options (and
the number of shares of Common Stock subject to outstanding Options), shall be adjusted by the Committee if, in its sole discretion, it shall deem such an adjustment to be necessary or appropriate to reflect any Common Stock dividend, stock split or
share combination or any recapitalization, merger, consolidation, exchange of shares, liquidation or dissolution of the Company. 
  
 10. Requirements of Law. The granting of Options and the issuance of shares of Common Stock pursuant to the Options shall be subject to all
applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. No shares of Common Stock shall be issued upon exercise of any Options granted hereunder, if such
exercise would result in a violation of applicable law, including the federal securities laws and any applicable state securities laws. 
  
 11. No Guarantee of Employment. Nothing in this Agreement shall interfere with or limit in any way the right of the Company or any of its
Subsidiaries to terminate your employment at any time, nor confer upon you any right to continue in the employ of the Company or any Subsidiary. 
  
 12. No Voting Rights. You shall have no right, in respect of Options granted hereby, to vote on any matter submitted to the Company stockholders
until such time as the shares of Common Stock issuable upon exercise of such Options have been so issued. 
  
 13. Interpretation; Construction. Any determination or interpretation by the Committee under or pursuant to the Plan and this Agreement shall be
final and conclusive on all persons affected hereby. In the 
  

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 event of a conflict between any term of this Agreement and the terms of the Plan, the terms of the Plan shall control.

  
 14. Amendments. The Committee shall have the right, in
its sole discretion, to amend this Agreement, from time to time, provided that no such amendment shall impair your rights under this Agreement without your consent. Subject to the preceding sentence, any alteration or amendment of this Agreement by
the Committee shall, upon adoption thereof by the Committee, become and be binding and conclusive on all persons affected thereby without requirement for consent or other action with respect thereto by any such person. The Company shall give written
notice to you of any such alteration or amendment of this Agreement as promptly as practicable after the adoption thereof. This agreement may also be amended in a written document signed by both you and the Company. 
  
 15. Miscellaneous. 
  
 (a) Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if delivered personally or sent by certified mail, return receipt requested, postage prepaid, or by any recognized international equivalent of such
mail delivery, to the Company or you, as the case may be, at the following addresses or to such other address as the Company or you shall specify by notice to the other party: 
  
 (i) if to the Company, to: 
      MBIA Inc. 
      113 King Street 
      Armonk, NY 10504 
      Attn: General Counsel 
  
 (ii)
if to you, to the address recorded on the books and records of the Company. 
  
 All such notices and communications shall be deemed to have been received on the date of delivery or on the third business day after the mailing thereof. 
  
 (b) Applicable Law. This Agreement shall be governed by and construed in accordance with the law of the State of
Connecticut, regardless of the law that might be applied under principles of conflict of laws. 
  
 (c) Section and Other Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 
  
 IN WITNESS WHEREOF, the Company and you have duly executed this Agreement as
of the date first above written. 
  

			
	MBIA INC.
		
	By:	 	 
	 	 	

	 	 	 
	 EMPLOYEE

	
	 
	

	 	 	 


  

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 EXHIBIT A - CASHLESS EXERCISE 
  
 MBIA INC. 2000 STOCK OPTION PLAN 
 OPTION EXERCISE FORM 
  

			
	Name:	  	 
	 	 	


  

			
	Address:	  	 
	 	 	


  

			
	Social Security Number:	  	 
	 	 	


  

			
	Office Telephone Number:	  	 
	 	 	


  
 Pursuant to the terms of the
MBIA Inc. 2000 Stock Option Plan, I hereby exercise the Option granted to me on                      for the number of shares listed below
subject to the cashless exercise procedures in the Plan. 
  

			
	 1. Number of shares as to which the option is being exercised:
	  	 
	 	 	

	 2. Per share exercise price:
	  	$                                       
                 
	 	 	

	 3. To be executed by (please specify name, telephone number and fax number):
	  	 


	 	


  

	 	


  

	 	



			
	4. Sell instructions:	 	 (            ) Sell at Market Price
 (            ) Sell at
$                                 or higher


  
 I understand that the amount by
which the aggregate fair market value of the shares that I am purchasing exceeds the aggregate exercise price is subject to applicable income and employment tax withholding. I agree that the Company shall calculate the amount required to be withheld
and such amount will be subtracted from the net proceed of the sale. 
  

			
	 Date:
                                        
                                       
 
	  	Signed:                                     
                                        
    

  
 DO NOT WRITE BELOW THIS LINE

  

  

			
	 Date Received:
                                        
                        
	  	Fair Market Value:                                  
                          

  
 RETURN TO THE SECRETARY OF MBIA INC. 

 

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 EXHIBIT B 
  
 OPTION TRANSFER FORM 
  
 Pursuant to the terms of the MBIA Inc. 2000 Stock Option Plan, the undersigned hereby transfers
(#)             options from the options granted on
                             to (insert name of transferee)
                                        
                            . 
  
  
 Family member (transferee) information: 
  

			
	Relationship of transferee to the undersigned:	  	 
	 	 	


  

			
	Transferee Address:	  	 
	 	 	

	 	  	 
	 	 	


  

			
	Transferee Social Security #:	  	 
	 	 	


  

			
	Transferee Phone #:	  	 
	 	 	


  

			
	Date:
                                        
                                	  	Signed:
                                        
                                

  

  
 The undersigned transferee acknowledges that he/she has read the non-qualified Stock Option Agreement and agrees to abide by its terms.

  

			
		
	Transferee Signature:	 	 
	 	 	

		
	Transferee Name (print):	 	 
	 	 	

		
	Date:	 	 
	 	 	



  
 RETURN TO THE SECRETARY OF MBIA
INC. 
  

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