Exhibit 10.1
MBIA INC. 2005 FOR NON-EMPLOYEE
DIRECTOR DEFERRED
COMPENSATION PLAN
WHEREAS, the Company had adopted the
Pre-2005 Plan which remains in effect for deferrals made on or
prior to December 31, 2004;
WHEREAS, the Company wishes to
enable non-employee directors to continue deferring compensation
after December 31, 2004 in a manner consistent with the
requirements of Section 409A of the Code so as to avoid the
imposition of penalty taxes on non-employee directors deferring
compensation;
WHEREAS, it is intended that the
compensation deferrals under the Pre-2005 Plan shall remain
“grandfathered” and therefore not subject to
Section 409A of the Code;
WHEREAS, this Plan is intended to be
a successor to the Pre-2005 Plan, and a continuation thereof, but
structured as a separate plan for ease of recordkeeping and
administration;
NOW THEREFORE, the Company hereby
adopts the MBIA Inc. 2005 Non-Employee Director Deferred
Compensation Plan (the “ Plan ”) governing
deferrals made on and after January 1, 2005.
The purpose of the Plan is to permit
eligible directors of MBIA Inc. to defer compensation and to
enhance the long-term mutuality of interest between the directors
and shareholders of MBIA Inc. by providing eligible directors the
opportunity to purchase the common stock of MBIA Inc. and to
otherwise share in the success of MBIA Inc.
“ Accounts ”
means the Investment Account and Share Account maintained by the
Company on behalf of each Participant in the Plan.
“ Board ” means
the Board of Directors of the Company.
“ 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.
“ Common Stock ”
means the common stock of the Company, par value $1.00 per share,
any common stock into which such common stock may be changed and
any common stock resulting from the reclassification of such common
stock.
“ Company ” means
MBIA Inc., a Connecticut corporation.
“ Deferred Compensation
” means, with respect to a Participant, the aggregate amount
of the Retainer and/or Fees deferred by such Participant in
accordance with Section 4(a) hereof.
“ Eligible Director
” means a director of the Company who is not an employee of
the Company or any of its subsidiaries.
“ Exchange Shares
” means a Share granted to an Eligible Director pursuant to
Section 5 hereof in exchange for such Eligible
Director’s election to forego receipt of all or a portion of
his or her Retainer or Fees.
“ Fair Market Value
” means, on any date, the closing price of the Common Stock
as reported on the consolidated tape of the New York Stock Exchange
(or on such other recognized quotation system on which the trading
prices of the Common Stock are quoted at the relevant time) on such
date. In the event that there are no Common Stock transactions
reported on such tape (or such other system) on such date, Fair
Market Value shall mean the closing price on the immediately
preceding date on which Common Stock transactions were so
reported.
“ Fees ” means
the attendance fees and chairperson fees payable to an Eligible
Director for his or her services as a director of the
Company.
“ Investment Account
” means a book entry account established and maintained by
the Company on behalf of a Participant to record the Deferred
Compensation allocated to the Participant’s Investment
Account and any additions thereto or subtractions therefrom
credited or charged in accordance with Section 4(b)
hereof.
“ Participant ”
means an Eligible Director who has elected in accordance with
Section 4(a) of the Plan to defer receipt of any portion of
the Retainer and/or Fees otherwise payable to such Eligible
Director. An individual shall cease to be a Participant upon the
payment on behalf of such individual of all amounts then standing
to the credit of such individual’s Accounts under the
Plan.
“ Plan ” means
the MBIA Inc. 2005 Non-Employee Director Deferred Compensation
Plan, as the same may be amended from time to time.
“ Pre-2005 Plan ”
means the Amended and Restated Deferred Compensation and Stock
Ownership Plan for Non-Employee Directors of MBIA, Inc.
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“ Retainer ”
means the annual retainer payable to an Eligible Director for his
or her services as a director of the Company.
“ Share ” means a
share of Common Stock.
“ Share Account ”
means a book entry account established and maintained by the
Company on behalf of a Participant to record the Deferred
Compensation allocated to the Participant’s Share Account and
any additions thereto or subtractions therefrom credited or charged
in accordance with Section 4(b) hereof.
(a) The Plan shall be administered
by the Board. The Board may delegate its powers and functions
hereunder to a duly appointed committee of the Board consisting of
two or more members, each of whom is a “Non-Employee
Director” within the meaning of Rule 16b-3, as promulgated
under the Securities Exchange Act of 1934, as amended.
(b) The Board shall have full
authority to interpret the Plan; to establish, amend and rescind
rules for carrying out the Plan; to administer the Plan; and to
make all other determinations and to take such steps in connection
with the Plan, the Accounts and any Exchange Shares granted
hereunder as the Board, in its discretion, deems necessary or
desirable for administering the Plan.
(c) The Board may designate the
Secretary of the Company, other employees of the Company or
competent professional advisors to assist the Board in the
administration of the Plan and may grant authority to such person
to execute agreements or other documents on its behalf.
(d) The Board may employ such legal
counsel, consultants and agents as it may deem desirable for the
administration of the Plan and may rely upon any opinion received
from any such counsel or consultant and any computation received
from any such consultant or agent. No member or former member of
the Board or any committee thereof or any person designated
pursuant to subsection (c) above shall be liable for any
action or determination made in good faith with respect to the
Plan, any Account or any grant hereunder. To the maximum extent
permitted by applicable law and the Certificate of Incorporation
and By-Laws of the Company, each member or former member of the
Board or any committee thereof or any person designated pursuant to
subsection (c) above shall be indemnified and held harmless by
the Company against any cost or expense (including counsel fees) or
liability (including any sum paid with the approval of the Company
in settlement of a claim) arising out of any act or omission to act
in connection with the Plan, unless arising out of such
person’s own fraud or bad faith. Such indemnification shall
be in addition to any rights of indemnification such person may
have as a director, officer or employee of the Company or under the
Certificate of Incorporation or the By-Laws of the Company.
Expenses incurred by the Board in the engagement of any such
counsel, consultant or agent shall be paid by the
Company.
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(e) For any period after the
Effective Date and until December 31, 2007, this Plan shall
have been administered by the Board in accordance with the terms
and conditions of the Pre-2005 Plan, but subject to such
modifications or adjustments thereto as shall have been necessary
to assure good faith compliance with section 409A of the Code
during such period. For this purpose and for purposes of any
transitional rule applicable under Section 409A of the Code,
this Plan shall be treated as though a continuation of the Pre-2005
Plan.
(a) Deferral Election
.
(i) Participation . Prior to
December 15 of any calendar year, an Eligible Director may
elect to defer all or any portion, in 25% increments, of ( i
) the Retainer payable for services rendered in the calendar
year following the calendar year in which such election is made and
( ii ) the Fees payable in respect of services rendered
in the calendar year following the calendar year in which such
election is made. Any person who shall become an Eligible Director
during any calendar year and does not otherwise participate in or
is eligible to participate in any “Account Balance
Plan” of the Company within the meaning of Section 409A
of the Code may elect, not later than the 30th day following the
commencement of his term as an Eligible Director, to defer payment
of all or a portion, in 25% increments, of the Retainer and/or Fees
payable for the portion of the calendar year following such
election.
(ii) Form and Duration of
Deferral Election . A deferral election shall be made by
written notice filed with the Secretary of the Company. Such
election shall continue in effect (including with respect to the
Retainer and/or Fees payable for and/or in, respectively,
subsequent calendar years) unless and until the Participant revokes
or modifies such election by written notice filed with the
Secretary of the Company. Any such revocation or modification of a
deferral election with respect to the Retainer and/or Fees shall
become effective as of the end of the calendar year in which such
notice is given and only with respect to the Retainer and/or Fees
payable for services as a director in the calendar year following
such election. Amounts credited to the Participant’s Accounts
prior to the effective date of any such revocation or modification
of a deferral election shall not be affected by such revocation or
modification and shall be distributed only in accordance with the
otherwise applicable terms of the Plan.
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(iii) Renewal . An Eligible
Director who has revoked an election to participate in the Plan may
file a new election in accordance with Section 4(a)(i) above
to defer ( A ) the Retainer payable for services to be
rendered in the calendar year following the calendar year in which
such new election is filed and/or ( B ) the Fees
payable in the calendar year following the calendar year in which
such new election is filed for services to be rendered in the
calendar year following the calendar year in which such new
election is filed.
(b) Participants’
Accounts .
(i) Establishment of Accounts
. The Company shall maintain an Investment Account and a Share
Account on behalf of each Participant and shall make additions to
and subtractions from such Accounts as provided herein.
(ii) Investment Account .
Deferred Compensation allocated to a Participant’s Investment
Account pursuant to Section 4(b)(iv) shall be credited to the
Investment Account as of the date such Deferred Compensation would
have been paid to the Participant. As of the end of each calendar
quarter, each Participant’s Investment Account shall be
credited with (or reduced by) an amount representing the
hypothetical return (or loss) that would have been earned had the
amount credited to such Account been invested among the notional
investment or investments approved by the Board for purposes of
this Plan and specified in the Participant’s election form
during the portion of such calendar quarter that such amounts were
credited to the Participant’s Investment Account.
(iii) Share Account .
Deferred Compensation allocated to a Participant’s Share
Account pursuant to Section 4(b)(iv) shall be deemed to be
invested in that number of notional Shares (the
“Units”) which is equal to the quotient obtained by
dividing ( i ) the dollar amount of such Deferred
Compensation by ( ii ) the Fair Market Value of a Share
on the date the Deferred Compensation then being allocated to the
Share Account would
