MBIA (MBI)

7. Certain Compensation Actions Executives and Employees, other than Mr. Brown and the Senior Executives

2007 Long-Term Incentive and Cash Awards. In 2008, the Company awarded two forms of long-term incentives for 2007 performance to 201 executives other than Mr. Brown and the Senior Executives. The first was a three-year restricted stock award to be paid out in 2011. The second was a five year restricted stock award to be paid out in 2013. A total of 1,016,646 shares valued at $15.2 million were granted under these programs. Payment of each of these long-term awards is generally conditioned upon the recipient’s continuous employment with the Company through the end of the vesting period subject to accelerated vesting upon the occurrence of certain events.

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2008 Performance Bonuses. For 2008, bonus targets ranged from 20% to 80% of base salary for bonus eligible employees. Based on Mr. Brown’s recommendation, the Committee approved annual incentive payouts of $16.2 million to 310 employees, which represents a bonus pool that is 67% of the target bonus pool and 44% of the maximum bonus pool for the Company’s bonus eligible employees, excluding Mr. Brown and excluding the Senior Executives.

2008 Long-Term Incentive and Cash Awards. In 2009, the Company awarded three forms of long-term incentives for 2008 performance valued at $16.8 million to 183 employees other than Mr. Brown and the Senior Executives. The first was a three-year cash award to be paid out in 2012. A total of $9.4 million was granted under this program. The second was a five-year cash award to be paid out in 2014. A total of $4.4 million was granted under this program. The third was a five-year restricted award to be paid out in 2014. A total of 740,000 shares worth $3.0 million (based on the closing stock price on February 12, 2009) were granted under this program. Individual awards were based on a percentage of the employee’s total salary and bonus for 2008. Payment of each of these long-term awards is generally conditioned upon the recipient’s continuous employment with the Company through the end of the vesting period subject to accelerated vesting upon the occurrence of certain events.

2009 Salary Actions. For 2008, we targeted base salaries for employees at close to the median salary of employees in similar positions. The Committee approved aggregate salary increases of $4.6 million for employees and executives (other than Mr. Brown and the Senior Executives) for 2009 reflecting changed job responsibilities and merit and promotion increases on a base of $56.9 million for our 410 employees.