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
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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.
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(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.
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(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.
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(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 member of the Executive Policy
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. 15%
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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.
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(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 Section 7(d) on account of Good Reason shall not
be treated as a voluntary termination under this
Section 7(b).
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(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 a
