XML 44 R25.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Long-term Incentive Plans | 12 Months Ended
--- | ---
Dec. 31, 2014
Long-Term Incentive Plans [Abstract] |
Long-Term Incentive Plans | Note 16: Long-term Incentive Plans Plan Description The Company maintains the MBIA Inc. 2005 Omnibus Incentive Plan (the “Omnibus Plan”). Under the Omnibus Plan a maximum of 10,000,000 shares of the Company’s common stock can be used for any type of award including stock options, performance shares, performance units, restricted stock, restricted stock units and divide nd equivalents. On May 1, 2012, the Company’s shareholders approved an increase in the total number of shares of common stock reserved and available f or issuance und er the Omnibus Plan from 10,000,000 shares to 14,000,000. A ny shares issued under the Omnibus Plan in connection with stock options shall be counted against this limit as one share covered by such op tion. For all awards other than stock options, any shares issued shall be counted against this limit as 1.28 shares for every share issued after the May 1, 2012 amendment and two shares for every share issued prior to the May 1, 2012 amendment. The stock option component of the Omnibus Plan enables key employees of the Company and its subsidiaries to acquire shares of common stock of the Company or to benefit from appreciation in the price of the common stock of the Company. The stock option grants, which may be awarded every year, provide the right to purchase shares of common stock at the fair value of the stock on the date of the grant. Options granted will either be Incentive Stock Options (“ISOs”) t hat qualify under Section 422(a) of the Internal Revenue Code, or Non-Qualified Stock Options (“NQSOs”). ISOs and NQSOs are granted at a price not less than 100% of the fair value, defined as the closing price on the grant date, of the Company’s common stock. Options are exercisable as specified at the time of grant depending on the level of the recipient (generally four or five years) and expire either seven or ten years from the date of grant (or shorter if specified or following termination of employment). Under the restricted stock component of the Omnibus Plan, certain employees are granted restricted shares of the Company’s common stock. These awards have a re strictio n period lasting three to five years depending on the type of award, after which time the awards fully vest. During the vesting period, these shares may not be sold. Restricted stock may be granted to all employees. Following the effective date of the Omnibus Plan, no new options or awards were granted under any of the prior plans authorized by the shareholders and all shares authorized but unissued were canceled. All stock awards granted under the prior p lans and subsequently canceled or expired after the effective date of the Omnibus Plan, become available for grant under the Omnibus Plan. There were 6,056,168 shares available for future grants under the Omnibus Plan as of December 31, 2014. I n accordance with accounting guidance for share-based payments, the Company expenses the fair value of employee stock options and other forms of stock-based compensation. In addition, the guidance classifies share-based payment awards as either li ability awards, which are remeasured at fair value at each balance sheet date, or equity awards, which are measured on the grant date and not subsequently remeasured. Generally, awards with cash-based settlement repurchase features or that are settled at a fixed dollar amount are classified as liability awards, and changes in fair value will be reported in earnings. Awards with net-settlement features or that permit a cashless exercise with third-party brokers are classified as equity awards and changes in fair value are not reported in earnings. The Company’s long-term incentive plans include features which result in equity awards. In addition, the guidance requires the use of a forfeiture estimate. The Company uses historical employee termination informati on to estimate the forfeiture rate applied to current stock-based awards. The Company maintains voluntary retirement benefits, which provide certain benefits to eligible employees of the Company upon retirement. A description of these benefits is included in the Company’s proxy statement. One of the components of the retirement program for those employees that are retirement eligible i s to continue to vest all performance-based stock options and restricted share awards beyond the retirement date in accordance with the original vesting terms and to immediately vest all outstanding time-based stock options and restricted share grants. The accounting guidance for share-based payment requires compensation costs for those employees to be recognized from the date of grant through the retirement eligible date, unless there is a risk of forfeiture, in which case the compensation cost is recogniz ed in accordance with the original vesting schedule. Accelerated expense, if any, relating to this retirement benefit for both stock option awards and restricted stock awards has been included in the compensation expense amounts. Restricted Stock The fair value of the restricted shares awarded, determi ned on the grant date, was $39 million and $6 million, and the fair value of the rest ricted shares canceled were $1 mi llion each for 2014 and 2013. Restricted shares have been recorded as unearned compensation, which is a component of paid-in capital within shareholders’ equity on the Company’s consolidated balance sheets and have been included in “Share-based compe nsation” on the Company’s consolidated statements of changes in shareholders’ equity. The amount of unearned compensation, net of estimated forfeitures, was $35 million as of December 31, 2014, which is expected to be recognized as exp ense over a weighted average period of 1.83 years. Unearned compensation is amortized to expense over the appropriate three to five-year vesting period (except for a minor portion g ranted to members of the MBIA Inc. Board of Directors which is amortized over a ten-year period). Compensation expense related to the restricted shares, net of estimated forfeitures, was $18 million, $11 million and $11 million for the years ended December 31, 2014, 2013 and 2012, respectively. The tax benefit related to the restricted share awards during 2014, 2013 and 2012 was $2 million, $1 million and $1 million, respectively. A summary of the Company’s restricted shares outstanding as of December 31, 2014, 2013 and 2012, and chang es during the years ended on those dates, is presented in the following table:
|  |  | Restricted Share Activity
|  |  | 2014 |  | 2013 |  | 2012
|  |  | Number of Shares |  | Weighted Average Price Per Share |  | Number of Shares |  | Weighted Average Price Per Share |  | Number of Shares |  | Weighted Average Price Per Share
| Outstanding at beginning of year |  | 3,832,115 |  | $ | 7.6438 |  | 7,320,110 |  | $ | 6.8017 |  | 4,881,782 |  | $ | 6.4134
| Granted |  | 3,263,472 |  |  | 12.0284 |  | 449,931 |  |  | 13.0741 |  | 2,689,542 |  |  | 7.9299
| Vested |  | (613,641) |  |  | 5.9661 |  | (969,396) |  |  | 9.8408 |  | (70,549) |  |  | 16.7909
| Forfeited |  | (123,120) |  |  | 10.2942 |  | (2,968,530) |  |  | 5.6724 |  | (180,665) |  |  | 9.2860
| Outstanding at end of year |  | 6,358,826 |  | $ | 10.0047 |  | 3,832,115 |  | $ | 7.6438 |  | 7,320,110 |  | $ | 6.8017
Stock Options The Company determines the fair value for stock option awards at the date of grant and is estimated using the Black-Scholes option pricing model. This model was developed for use in estimating the fair value of traded options that have no vesting restrictions, are fully transferable, and contain both service and some performance conditions. In addition, option valuation models require the input of highly subjective assumptions including the expected stock pri ce volatility. Employee stock option compensation expense, net of estimated forfeitures, for the year ended December 31, 2014 was immaterial. Employee stock option compensation expense, net of estimated forfeitures, for the years ended December 31, 2013, and 2012 totaled $2 million and $3 million, respectively. During 2014, 2013, and 2012, there were no stock option award s granted. During 2014, 2013, and 2012, the Company expensed deferred tax asset s of $4 million, $5 million and $6 million, respectively, related to the stock option awards as a charge to paid-in capital. As of December 31, 2014, there was an immaterial a mount of total unrecognized compensation cost related to non-vested stock options. A summary of the Company’s stock options outstanding as of December 31, 2014, 2013 and 2012, and changes during the years ended on those dates, is presented in the following tables:
|  |  | 2014 |  | 2013 |  | 2012
|  |  |  |  | Weighted |  |  |  | Weighted |  |  |  | Weighted
|  |  |  |  | Average |  |  |  | Average |  |  |  | Average
|  |  | Number of |  | Price |  | Number of |  | Price |  | Number of |  | Price
Options |  | Shares |  | Per Share |  | Shares |  | Per Share |  | Shares |  | Per Share
Outstanding at beginning of year |  | 3,715,406 |  | $ | 20.6883 |  | 5,963,268 |  | $ | 19.0485 |  | 6,425,073 |  | $ | 21.3330
Exercised |  | (400,000) |  |  | 4.0200 |  | - |  |  | - |  | - |  |  | -
Expired or forfeited |  | (767,406) |  |  | 61.5815 |  | (2,247,862) |  |  | 16.3382 |  | (461,805) |  |  | 50.8330
Outstanding at end of year |  | 2,548,000 |  | $ | 10.9888 |  | 3,715,406 |  | $ | 20.6883 |  | 5,963,268 |  | $ | 19.0485
Exercisable at end of year |  | 1,798,000 |  | $ | 13.4660 |  | 1,752,311 |  | $ | 38.5120 |  | 1,751,173 |  | $ | 45.0174
The following table summarizes information about outstanding stock options as of December 31, 2014:
|  | Stock Options Outstanding |  | Stock Options Exercisable
|  |  |  | Weighted |  |  |  |  |  |  |  |  |  | Weighted |  |  |  |  |  |
|  |  |  | Average |  |  | Weighted |  | Aggregate |  |  |  | Average |  |  | Weighted |  | Aggregate
|  |  |  | Remaining |  |  | Average |  | Intrinsic |  |  |  | Remaining |  |  | Average |  | Intrinsic
Range of Average |  | Number of |  | Contractual |  |  | Exercise |  | Value |  | Number of |  | Contractual |  |  | Exercise |  | Value
Exercise Price |  | Options |  | Life in Years |  |  | Price |  | (in millions) |  | Options |  | Life in Years |  |  | Price |  | (in millions)
$4.02 - $57.71 |  | 2,287,500 |  | 1.70 |  | $ | 5.3922 |  | $ | 11 |  | 1,537,500 |  | 1.47 |  | $ | 5.5591 |  | $ | 8
$58.84 - $70.86 |  | 260,500 |  | 0.55 |  |  | 60.1333 |  |  | - |  | 260,500 |  | 0.55 |  |  | 60.1333 |  |  | -
Total |  | 2,548,000 |  | 1.58 |  | $ | 10.9888 |  | $ | 11 |  | 1,798,000 |  | 1.34 |  | $ | 13.4660 |  | $ | 8
Performance Based Awards During 2014 and 2012, the Company granted three million and two million restricted shares, respectively, to certain key employees which have a vesting schedule dependent on the achievement of certain stock price targets of the Company. The grants and corresponding compensation expense have been included in the above restricted stock disclosures. As permitted by the accounting guidance for shar e-based payment s, the Company estimates the fair value of awards that contain market performance conditions at the date of grant using a binomial lattice model with a Monte Carlo simulation. The binomial lattice model can better incorporate assumptions abo ut a stock price path because the model can accommodate a large number of potential stock prices over the award’s term in comparison to the Black-Scholes model. During 2010, the Board of Managers of Cutwater established the Cutwater Asset Management Equity Participation Plan (“the Plan”). The purpose of the Plan is to promote the interests of Cutwater and its equity security holders and is designed to provide compensation tied to the value of Cutwater by the grant of equity participation units. Each unit re presents the contractual right to receive cash payments based on the value of Cutwater. These grants have a restriction period lasting five years, after which time the awards fully vest providing the participant is continuously emplo yed by Cutwater or one of its affiliates during that period. The maximum number of units available for grant under the Plan is 350,000. During 2014, no new units were granted and 38,000 units were canceled. As of December 31, 2014, 185,312 units vested with no value. In accordance with the accounting guidance for awards that include a cash-based settlement feature, the Plan is classified as a liability award. Th e original value of the award was determined on the date of grant and remeasured at each balance sheet date. A liability is accrued over the vesting period of the Plan and reflects the present value of the award as of each balance sheet date. Any change is reflected in earnings. For the years ended December 31, 2014, 2013 and 2012, no compensation cost related to the Plan was recorded as a result of the decline in the value of the awards.

X
- Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration