Exhibit 10.3

 

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.

 

2004 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

 

amended and restated as of February 14, 2008

 

 

 

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FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.

 

2004 Supplemental Executive Retirement Plan

 

 

CONTENTS

 

 

 

 

 

Page

 

 

 

 

 

ARTICLE 1.

 

Purposes of Plan

 

1

 

 

 

 

 

ARTICLE 2.

 

Definitions

 

1

 

 

 

 

 

ARTICLE 3.

 

Participation

 

3

 

 

 

 

 

ARTICLE 4.

 

Restoration of Benefits

 

3

 

 

 

 

 

ARTICLE 5.

 

Claims Procedures

 

7

 

 

 

 

 

ARTICLE 6.

 

Administration and General Provisions

 

9

 

 

 

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FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.

2004 Supplemental Executive Retirement Plan

 

 

ARTICLE 1.           Purposes of Plan.

 

1.1                                 Financial Security Assurance Inc. adopted
the Financial Security Assurance Inc. Supplemental Executive Retirement Plan (as
heretofore amended and restated, the “1989 Plan”), effective January 1, 1989, in
order to restore the pension benefits of selected current and future key
employees whose benefits under the Financial Security Assurance Inc. Money
Purchase Plan are limited by reason of certain limitations imposed by
Section 401(a)(17), Section 415 and other provisions of the Internal Revenue
Code of 1986, as amended from time to time (the “Code”).  Effective as of
December 17, 2004, the Company discontinued contributions under the 1989 Plan
and established a new supplemental executive retirement plan, serving the same
purposes as the 1989 Plan.  This new plan, as amended from time to time, is
known as the Financial Security Assurance Holdings Ltd. 2004 Supplemental
Executive Retirement Plan, and is referred to herein as the “Plan.”  The terms
of the Plan govern credits for contributions made commencing January 1, 2006, in
respect of limited pension benefits payable in respect of calendar year 2005,
and amounts transferred to the Plan from the 1989 Plan as described herein.  The
Plan was amended effective as of May 18, 2006 to provide that payments due upon
a separation from service shall generally not be paid during the six months
following the separation from service and to make certain other changes, and the
Plan is hereby amended and restated, as set forth in this Plan document,
effective as of February 14, 2008 to comply with the final regulations under
Section 409A of the Code and to make certain other changes.

 

ARTICLE 2.           Definitions.

 

                                                For purposes of the Plan, the
following terms shall have the meanings set forth below:

 

2.1                                 “Account” shall mean the account established
for a Participant under the Plan to which contributions and earnings are
credited.

 

2.2                                 “Basic Plan” shall mean the Financial
Security Assurance Inc. Money Purchase Plan as adopted and amended from time to
time.

 

2.3                                 “Beneficiary” shall mean the person or
persons designated by the Participant to receive benefits under the Plan in the
event of the Participant’s death.  If there is no Beneficiary surviving the
Participant, any death benefit payable hereunder shall be paid to the
Participant’s estate.

 

2.4                                 “Board” shall mean the Board of Directors of
the Company.

 

 

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2.5                                 “Code” shall mean the Internal Revenue Code
of 1986, as amended from time to time.  Any references herein to a specific
section of the Code shall be deemed to refer to the rules and regulations under
the Code in respect of such section, and to the corresponding provisions of any
future internal revenue law and the rules and regulations thereunder.

 

2.7                                 “Committee” shall mean the Human Resources
Committee of the Board acting on the majority vote of such Committee.

 

2.6                                 “Company” shall mean Financial Security
Assurance Holdings Ltd., a New York corporation.

 

2.7                                 “Compensation” shall mean, with respect to
each Plan Year, the Participant’s annual base salary, cash bonus and any amount
deferred pursuant to the Company’s 1995 Deferred Compensation Plan or 2004
Deferred Compensation Plan (other than deferrals related to “Performance Share”
awards); provided, however, that in no case shall such Compensation exceed $1
million in any Plan Year.

 

2.8                                 “Disability” shall mean, in the case of a
Participant, that, as determined by the Committee, the Participant is (i) unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months or (ii) by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than 3 months under an accident and health
plan covering employees of the Company.

 

2.9                                 “Discharge for Cause” shall mean an
Employee’s termination of employment by a Participating Company due to such
Employee’s willful misconduct or gross negligence in respect of his or her
duties of employment with the Participating Company including, but not limited
to, conviction for a felony or perpetration of a common law fraud, which has
resulted in or is likely to result in material economic damage to a
Participating Company.

 

2.10                           “Employee” shall mean any individual employed by
a Participating Company on or after January 1, 2004 to whom benefits are payable
under the Basic Plan.

 

2.11                           “Participant” shall mean an Employee who is a
member of a select group of management or highly compensated employees and who
has been designated by the Committee for participation in the Plan pursuant to
Section 3.1.

 

2.12                           “Participating Company” shall mean the Company or
any subsidiary or affiliate of the Company employing a Participant.

 

2.13                           “Plan” shall mean the 2004 Financial Security
Assurance Holdings Ltd. Supplemental Executive Retirement Plan as set forth
herein, and as amended from time to time.

 

2.14         “Plan Year” shall mean each calendar year beginning after
December 31, 2003.

 

 

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2.15                                 “SERP Election Change Form” shall mean the
form prescribed or accepted by the Committee by which a Participant may change a
previous distribution election.

 

2.16                           “Years of Service” shall mean “Years of Service
for Vesting” as defined under the Basic Plan.

 

Where used herein, the masculine gender shall be deemed, where applicable, to
include the feminine gender, and references to the singular shall be deemed,
where applicable, to include the plural.

 

ARTICLE 3.           Participation.

 

3.1                                 At any time during the Plan Year, the Chief
Executive Officer may recommend an Employee to the Committee for participation
in the Plan.  Upon receiving such recommendation, the Committee shall timely act
upon it and shall notify the Employee in the event he or she is designated a
Participant and the date as of which such participation commences.  Unless
otherwise determined by the Chief Executive Officer or the Committee, each
Employee attaining the rank of Director, Managing Director, Associate General
Counsel, General Counsel, Executive Vice President, President or Chairman shall
be deemed to have been designated as a Participant by the Committee for all
purposes of the Plan.  Unless otherwise determined by the Committee, once an
Employee has been approved by the Committee as a Participant in the Plan, such
Employee shall remain a Participant until all of his or her benefits with
respect to the Plan have been paid or forfeited.

 

ARTICLE 4.           Restoration of Benefits.

 

4.1                                 Amount of Restoration of Benefits.  Subject
to Sections 4.3(b), 4.5 and 5.2 of the Plan, the Account of a Participant who is
in service with a Participating Company on the last day of the Plan Year, and
whose pension benefits under the Basic Plan for such Plan Year are limited by
the application of Section 401(a)(17) of the Code, Section 415 of the Code and
other limits under the Code on the inclusion of deferred amounts for
contribution purposes, shall be credited with an amount equal to the difference
between:

 

                                               
(a)                                  the amount of contribution related to
Compensation which would have been payable to or in respect of the Participant
under the Basic Plan without regard to the maximum annual pension limitation in
Section 415 of the Code or the pensionable compensation limitation in
Section 401(a)(17) of the Code or the exclusion of certain deferred amounts, and

 

                                               
(b)                                 the amount of contribution related to
Compensation actually payable to or in respect of the Participant under the
Basic Plan.

 

In addition to the foregoing amounts, the Account of a Participant shall be
credited with such amounts in the Participant’s account under the 1989 Plan that
are not vested on or

 

 

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before December 31, 2004 and that are deemed transferred to the Plan pursuant to
the terms of the 1989 Plan.  Such amounts shall be subject to the terms and
conditions of the Plan.

 

4.2                                 Vesting.  A Participant shall be 100% vested
in his or her Account upon attaining age 55, upon his or her death or Disability
while in the employ of a Participating Company or upon the termination of the
Plan pursuant to Section 5.2.  Except as provided in Section 5.4, if a
Participant terminates employment prior to an event specified in the preceding
sentence, such Participant shall be vested in his or her Account in accordance
with the following schedule:

 

Completed Years of Service

 

Percentage

 

 

 

Less than 2

 

0

2

 

20

3

 

40

4

 

60

5

 

80

6 or more

 

100

 

4.3                                 Crediting of Investment Gain/Loss.

 

(a)                                  The balance of each Participant’s Account
shall be credited with earnings and investment gains and losses as provided
below.  The Committee may establish procedures permitting Participants to
designate one or more investment benchmarks specified by the Chief Executive
Officer or the Committee for the purpose of determining the earnings or
investment gains and losses to be credited or debited to a Participant’s
Account.  Investment benchmarks so specified may be made available to all
Participants or selected Participants as the Chief Executive Officer or the
Committee may designate.  The Committee shall have the sole discretion to make
such rules as it deems desirable with respect to the administration of any such
investment benchmark procedures, including rules permitting the Participant to
change the designation of investment benchmarks to be used to measure the value
of the Account.  The Committee, however, retains the discretion at any time to
change the investment benchmarks available to Participants, including any
investment benchmarks previously specified by the Chief Executive Officer, or to
discontinue the benchmark procedure.  If the Committee fails to implement an
investment benchmark procedure or discontinues such procedure, or if the
Participant fails to designate properly an investment benchmark, the
Participant’s Account shall be credited with earnings at a rate determined by
the Committee in its sole discretion, utilizing whatever factors or indicia it
deems appropriate; provided, however, that the rate of return on a Participant’s
Account in such circumstances shall not be less than the Chase Bank prime rate
plus one percent.

 

 

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(b)                                 Nothing in this Section 4.3 or in the
Committee’s rules shall give a Participant the right to require the Company or a
Participating Company to acquire any asset for the Account of the Participant,
and if the Company or a Participating Company acquires any asset, or causes a
trustee on its behalf to acquire any asset, to permit it to satisfy its
obligations to pay the balance of the Participant’s Account, the Participant
shall have no right or interest in any such asset, which shall be held by the
Company or the Participating Company subject to the rights of all unsecured
creditors of the Company or the Participating Company.  The rights of the
Participant with respect to any designation of one or more investment benchmarks
for measuring the value of any Account hereunder shall be expressly subject to
the provisions of Section 5.6 of the Plan.

 

4.4                                 Form and Timing of Election.

 

(a)                                  Except as otherwise elected by a
Participant before January 1, 2007, payment of the Participant’s vested Account
balance shall be made as soon as administratively practicable following the
Participant’s death, Disability or separation from service within the meaning of
Section 409A of the Code (each a “Distribution Event”).  A Participant will
generally have a separation from service within the meaning of Section 409A of
the Code if the facts and circumstances indicate that the Company and the
Participant reasonably anticipate that no further services will be performed by
the Participant for the Company or any Affiliate or that the level of bona fide
services the Participant will perform for the Company and all Affiliates
(whether as an employee or as an independent contractor) will decrease to no
more than 20 percent of the average level of bona fide services performed
(whether as an employee or an independent contractor) over the immediately
preceding 36-month period (or the full period of services if the Participant has
been providing services for less than 36 months).  Notwithstanding the
foregoing, the employment relationship is treated as continuing while the
Participant is on military leave, sick leave or other bona fide leave of absence
if the period of leave does not exceed six months, or if longer, so long as the
Participant retains the right to reemployment with the Company or any Affiliate
under an applicable statute or contract.  When a leave of absence is due to a
medically determinable physical or mental impairment that can be expected to
result in death or to last for a period of at least six months and such
impairment causes the Participant to be unable to perform the duties of his or
her position or any substantially similar position, a 29-month maximum period of
absence shall be substituted for the six-month maximum period described in the
preceding sentence.  For purposes of the foregoing, the term “Affiliate” means
any corporation or other business entity that would be considered a single
employer with the Company pursuant to Sections 414(b) or 414(c) of the Code.

 

 

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                                                Notwithstanding the foregoing,
effective as of May 18, 2006, any distribution payments due on account of a
Participant’s separation from service and otherwise payable during the six-month
period following the Participant’s separation from service shall be paid on the
first regular payroll payment date after such six-month period (or after the
Participant’s death, if earlier).

 

(b)                                 The Participant may elect that his or her
vested Account Balance be distributed in a lump sum or in installments payable
over a specified number of years, not longer than 15 years; provided, however,
that in no event may installment payments be elected over a number of years that
is more than the Participant’s life expectancy or the life expectancy of the
designated primary Beneficiary, whichever is greater, at the time the
Participant elects a form of distribution.  If a Participant elects the
installment option, the Participant must also elect whether installments should
be made annually, quarterly or, if the Committee (or the Chief Executive Officer
of the Company in respect of all Participants) shall direct to offer such
alternative, monthly.  A Participant may specify different payment options
(i) for different percentages or dollar amounts of a Participant’s vested
Account balance; or (ii) in the event of the death or Disability of the
Participant.  Distributions will be in the form of a lump sum (i) if the
Participant did not choose a different distribution option or (ii) in the event
of death or Disability, if the Participant did not expressly choose a different
distribution option in the event of death or Disability.  The entitlement to a
series of installment payments shall be treated as the right to a series of
separate payments for purposes of Section 409A of the Code.

 

(c)                                        Before the taxable year for which the
amounts described in Section 4.1 are credited to a Participant’s Account, the
Participant may make an election with respect to the form of distribution of
such amounts.  A Participant who becomes eligible to participate in the Plan for
the first time after the beginning of a taxable year may make an election with
respect to the form of distribution of amounts credited to his or her Account
for such taxable year before the date on which he or she is designated a
Participant.  An election with respect to the form of distribution of any
amounts credited to a Participant’s Account shall be irrevocable.  Amounts that
are transferred to the Plan from the 1989 Plan shall be subject to any election
with respect to the form of distribution of such amounts as shall be in effect
under the 1989 Plan as of December 31, 2004.

 

(d)                                 A form-of-distribution election shall be
effective upon submission to the Committee or its designee and compliance with
all applicable requirements established by the Committee.  Notwithstanding any
contrary provision in the Plan, the Committee, in its sole discretion, retains
the right, but shall have no obligation, to distribute all or any portion of a

 

 

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Participant’s vested Account balance in the form of any security or other
investment chosen by the Participant as an investment benchmark for measuring
the value of his or her Account pursuant to Section 4.3(a) of the Plan. 
Further, notwithstanding any contrary provision in the Plan, any distribution to
a Participant that would be disallowed as a tax deduction by the Company
pursuant to Section 162(m) of the Code if timely made may be delayed by the
Committee to the extent permitted by, and in accordance with, the requirements
of Section 409A of the Code for the exclusion from gross income of amounts
deferred under the Plan.

 

(e)                                  Notwithstanding any other provision of the
Plan, any payment required to be made by the Company on a specified date
pursuant to the terms of the Plan, or pursuant to any election made under the
Plan, may be made as soon as administratively practicable, but no later than 90
days, thereafter.  Amounts in a Participant’s Account shall continue to be
credited with earnings and investment gains and losses pursuant to Section 4.3
until distributed to the extent administratively practicable.

 

4.5                                 Benefit Restoration With Respect to Certain
Bonus Payments.  In the event that a Participating Company accelerates the
payment of bonuses for any Plan Year by paying bonuses which would otherwise be
payable in the following Plan Year, and such payment causes a Participant to be
credited with a lower total contribution under the Basic Plan and the Plan by
virtue of the limitations provided in the Basic Plan and the limitations on the
amount of Compensation provided in Section 2.7 of the Plan, then,
notwithstanding any such limitations, the Committee may, in its discretion,
credit an additional supplemental pension contribution under the Plan for the
Plan Year in which the bonuses were paid on an accelerated basis up to the
amount which would otherwise be lost to the Participant by virtue of the
application of the limitations in the Basic Plan and in the Plan.  The aggregate
amounts credited under the Plan, and the contributions actually payable to or in
respect of the Participant under the Basic Plan, over a two Plan Year period
consisting of the Plan Year into which the bonus was accelerated and the
following Plan Year, shall not be increased by virtue of the application of this
Section 4.5.

 

ARTICLE 5.           Claims Procedures.

 

5.1                                 Decision on Initial Claim.  The Company
shall appoint an individual or committee of individuals (the “Decisionmaker”) to
evaluate claims made under the Plan.  Within 90 days after the Company receives
a written claim for benefits under the Plan, the Decisionmaker will either
approve the claim or notify the claimant that the claim is denied.  The
Decisionmaker may extend this time period by up to an additional 90 days under
special circumstances and shall notify the claimant of the extension and the
reasons therefore within the initial 90-day period.

 

                                                Notwithstanding the foregoing,
to the extent that a claim relates to a distribution or benefit due as a result
of a Disability (a “Disability Benefit”), the Decisionmaker shall notify a
claimant of the denial of a claim for Disability Benefits under the Plan within
a

 

 

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reasonable period of time, but not later than 45 days, after receipt of a
written claim.  This period may be extended by the Decisionmaker for two
additional periods of up to 30 days each if the Decisionmaker determines that
the extension is necessary due to matters beyond its control and notifies the
claimant of the extension and the reasons therefore before the expiration of the
applicable period.  Such notices of extension shall specifically explain the
standards on which entitlement to a Disability Benefit is based, the unresolved
issues that prevent a decision on the claim and the additional information (if
any) needed to resolve those issues.  If additional information is needed, the
claimant shall have at least 45 days to provide the information.

 

5.2                                 Denial of Initial Claim.  If a claim is
denied, in whole or in part, the Decisionmaker shall furnish to the claimant, at
the time of the denial, a written notice setting forth in a manner calculated to
be understood by the claimant: (i) the reason(s) for the denial, including a
reference to any applicable provisions of the Plan; (ii) a description of any
additional material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is necessary; and
(iii) an explanation of the Plan’s review procedures and the time limits
applicable to such procedures.  In addition, if a claim for Disability Benefits
is denied, the notice of denial shall inform the claimant of any internal rule,
guideline, protocol or other similar criterion relied upon in denying the claim
and identify any health care professional consulted in connection with the
denial.

 

5.3                                 Appeal of Denied Claim.  A claimant who has
received a notice denying a claim, in whole or in part, may request in writing a
review of the claim within 60 days (180 days for denials of claims for
Disability Benefits) after receiving a notice of denial.  Such request may be
made either in person or by a duly authorized representative and shall set forth
all the bases of the request for review, any facts supporting the review and any
issues or comments the claimant deems pertinent.  The claimant may submit
documents, records and other information in support of the review and shall be
provided upon request, free of charge, reasonable access to and copies of all
documents, records and other information relevant to the claimant’s appeal.

 

5.4                                 Decision on Appeal.  The Company shall
appoint an individual or committee of individuals to review the appeal of any
claim denial under the Plan (the “Claim Reviewer”).  The Claim Reviewer shall
make a decision with respect to a claim review promptly, but not later than 60
days (45 days in the case of denials of claims for Disability Benefits) after
receipt of the appeal.  The Claim Reviewer may extend this time period by up to
an additional 60 days (45 days in the case of denials of claims for Disability
Benefits) under special circumstances by providing the claimant with notice of
the extension and the reasons therefore within the initial 60-day (or 45-day)
period.  The Claim Reviewer will be a different person(s) from the person(s) who
made the initial determination and will not be a subordinate of the original
Decisionmaker or a relative of such subordinate.  The Claim Reviewer will not
grant deference to the initial decision and will consider all information
submitted, regardless of whether it was considered in connection with the
initial claim.

 

 

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In deciding an appeal from the denial of a claim for Disability Benefits that is
based in whole or in part on a medical judgment, the Claim Reviewer shall
consult with a health care professional who has the appropriate training and
experience in the field of medicine involved in the medical judgment.  Such
health care professional will not be the individual, if any, who was consulted
in connection with the denial that is the subject of the appeal, nor a
subordinate of such individual.

 

The final decision of the Claim Reviewer shall be in writing, give specific
reasons for the decision, provide specific references to the pertinent
provisions of the Plan on which the decision is based and include both a
statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of all documents, records and other
information relevant to the claimant’s claim for benefits and a statement of the
claimant’s right to bring an action in court.  In addition, if an appeal of a
claim for Disability Benefits is denied, the notice of denial shall inform the
claimant of any rule, guideline, protocol or other similar criterion relied upon
in making the adverse benefit determination and identify the health care
professional consulted in connection with the appeal.

 

ARTICLE 6.           Administration and General Provisions.

 

6.1                                 Administration.

 

                                               
(a)                                  The Plan shall be administered by the
Committee in accordance with the administrative provisions of the Basic Plan. 
The Committee shall have full power and authority to interpret, construe and
administer the Plan, and review claims for benefits under the Plan, and the
Committee’s interpretations and constructions of the Plan and actions thereunder
shall be binding and conclusive on all persons and for all purposes.

 

                                               
(b)                                 The Committee shall establish and maintain
Plan records and may arrange for the engagement of such certified public
accountants, actuarial consultants or legal counsel, and make use of such agents
and clerical or other personnel, as they shall require or may deem advisable for
purposes of the Plan.  The Committee may rely upon the written opinion of such
counsel and the consultants or accountants engaged by the Committee and may
delegate to any agent or to any sub-committee or member of the Committee its
authority to perform any act hereunder, including, without limitation, those
matters involving the exercise of discretion, provided that such delegation
shall be subject to revocation at any time by the Committee.

 

                                               
(c)                                  To the maximum extent permitted by
applicable law, no member of the Committee shall be personally liable by reason
of any contract or other instrument executed by him or her in his or her
capacity as a member of the Committee, nor for any mistakes of judgment made in
good faith, and the Company shall indemnify and hold harmless, directly from its
own assets (including the proceeds of any insurance policy the premiums of which
are

 

 

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paid from the Company’s own assets), each member of the Committee and each
officer, employee or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan or to the engagement or
control of the assets of the Plan may be delegated or allocated, against any
cost or expense (including counsel fees) or liability including any sum paid in
settlement of a claim with the approval of the Company arising out of any act or
omission to act in connection with the Plan.

 

6.2                                 Amendment and Termination.  The Plan may be
amended, suspended or terminated, in whole or in part, by the Board, but no such
action shall retroactively impair or otherwise adversely affect the rights of
any person to receive benefits under the Plan which have accrued prior to the
date of such action, as determined by the Committee, except to the extent
necessary or desirable to comply with the requirements of Section 409A of the
Code as interpreted by the Committee in its sole discretion for exclusion from
gross income of amounts deferred under the Plan; provided, however, that the
amount of any future contribution payable to or in respect of a Participant may
be reduced by the amount of any increase in the amount of pension actually
payable to the Participant or Beneficiary under the Basic Plan due to any
increases in benefits payable under the Basic Plan (whether due to changes in
the limitations under Sections 401(a)(17) and 415 of the Code or otherwise)
subsequent to the Participant’s retirement.  Anything in Section 4.4 to the
contrary notwithstanding, in the event of the termination of the Plan, the
Committee may direct that all Account balances be distributed at a time
determined by the Committee in the form of a lump sum to the extent permitted by
Section 409A of the Code, as interpreted by the Committee in its sole discretion
for exclusion from gross income of amounts deferred under the Plan.

 

6.3                                 Company’s Right to Discharge Employees. 
Nothing contained herein will confer upon any Participant or other employee the
right to be retained in the employ of any Participating Company, nor will it
interfere with the right of any Participating Company to discharge or otherwise
administer the employment and termination of Participants and other employees
without regard to the existence of the Plan.

 

6.4                                 Discharge for Cause.  Notwithstanding any
other provisions contained in the Plan, in the event of a Participant’s
Discharge for Cause, such Participant and his or her Beneficiary shall forfeit
all rights to any payments under the Plan.

 

6.5                                 Sale of Company.  Nothing in the Plan shall
preclude the Company from consolidating with or merging into or with, or
transferring all or substantially all its assets to, another corporation which
assumes the Plan and all obligations of the Company hereunder.  Under such a
consolidation, merger, or transfer of assets and assumption, the term “Company”
shall refer to such other corporation and the Plan shall continue in full force
and effect.

 

6.6                                 Source of Payments.  Participants have the
status of general unsecured creditors of the Company and the Plan constitutes a
mere promise by the Company to make benefit payments in the future from its
general assets; provided, however, that such payments shall

 

 

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be reduced by the amount of any payments made to the Participant or his or her
Beneficiary from any trust or special or separate fund established by the
Company to assure such payments, and if the Company shall make any investments
to aid it in meeting its obligations hereunder, the Participant and his or her
Beneficiary shall have no right, title or interest whatever in or to any such
investments except as may otherwise be expressly provided in a separate written
instrument relating to such investments.  Nothing contained in the Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind between the Company and any Participant or Beneficiary.  By
action of its Board of Directors, any Participating Company may assume joint and
several liability with the Company with respect to any obligations under the
Plan for Participants employed by the Participating Company.

 

6.7                                 Withholding.  The Company may withhold from
any benefits payable under the Plan all Federal, state, city or other taxes as
shall be required pursuant to any law or governmental regulation or ruling.

 

6.8                                 Expenses.  All expenses incurred in
administering the Plan will be paid by the Company and none will be paid by the
Participant.

 

6.9                                 Assignment.  No interest of any Participant
or Beneficiary hereunder shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Participant or the Participant’s Beneficiary. 
The Plan shall be binding upon and inure to the benefit of the Company and its
successors and assigns and the Participant, his or her Beneficiary and estate. 
Notwithstanding the foregoing, pursuant to rules comparable to those applicable
to qualified domestic relations orders, as determined by the Committee, the
Committee may direct a distribution prior to any distribution date otherwise
described in the Plan, to an alternate payee (as defined under the rules
applicable to qualified domestic relations orders) to the extent permitted by
Section 409A of the Code as interpreted by the Committee in its sole discretion
for exclusion from gross income of amounts deferred under the Plan.

 

6.10                           ERISA Status of Plan.  The Plan is intended to
constitute an “unfunded plan for management or other highly compensated
individuals” as defined in the Employee Retirement Income Security Act of 1974,
as amended from time to time (“ERISA”), and is subject to certain provisions of
ERISA, including certain requirements relating to reporting, disclosure,
enforcement and claims.

 

6.11                           Compliance with Section 409A of the Code. 
Notwithstanding any other provision of the Plan to the contrary, the Plan is
intended to comply with the requirements of Section 409A of the Code to avoid
taxation under Section 409A(a)(1) of the Code and shall, at all times, be
interpreted and operated in a manner consistent with this intention.  Under no
circumstances, however, shall the Company or any of its affiliates have any
liability to any person for any taxes, penalties or interest due on amounts paid
or payable under the Plan, including any taxes, penalties or interest imposed
under Section 409A(a)(1) of the Code.

 

 

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6.12                           Applicable Law.  The Plan shall be construed,
regulated and administered according to ERISA (to the extent applicable), the
Code and the laws of the State of New York.

 

 

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