Exhibit 10.3

 

[AGL letterhead]

 

To:  All Assured Guaranty Ltd. directors holding Restricted Stock Units (“RSUs”)
granted prior to May 2008

 

From:  James M. Michener

 

You currently hold RSUs granted under the Assured Guaranty Ltd. 2004 Long-Term
Incentive Plan (the “LTIP”).  Generally, RSUs have provided that distribution of
shares in settlement of the RSUs will be made six months after the director
leaves the board, except that in the event of death or disability, distribution
would be accelerated to the date on which the director leaves the board.

 

RSUs are treated as deferred compensation and must comply with the rules imposed
by section 409A of the U.S. Internal Revenue Code to avoid immediate taxation of
benefits.   As approved by the board in August 2007, the LTIP and other benefit
plans are being modified to satisfy those rules.  Also, to satisfy the
requirements of section 409A, the following changes are being made to director
RSU awards granted prior to May 2008:

 

·      Distribution of shares in settlement of the awards upon a disability
termination will be made six months after termination rather than distribution
occurring on the disability termination date.  (No change is being made from the
immediate distribution of the shares if departure from the board occurs by
reason of death.)

 

·      The determination of whether a director will be considered to have left
the board will be made without regard to continued service as an employee (if
any).

 

·      Also, determination of whether a departure from the board has occurred
will be made under the section 409A rules if the director substantially reduces
his or her duties, but does not completely cease performing duties for the
board.  Finally, the awards will reflect the section 409A limit on the ability
of a director or the board to change the otherwise scheduled time for
distribution of the shares.

 

 For those directors who selected to receive their 2008 retainer equity in the
form of RSUs, your 2008 RSU award agreement is enclosed with this letter. The
2008 agreement also contains the above terms.  The 2008 restricted stock award
agreements are also enclosed for those directors who selected to receive their
2008 retainer equity in the form of restricted stock.  Section 409A requirements
do not apply to grants of restricted stock since they are not considered
deferred compensation.

 

Please contact me if you have questions regarding your Assured Guaranty Ltd.
equity awards.

 

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