## **Exhibit 10.14**

## FINANCIAL SECURITY ASSURANCEHOLDINGS LTD.

## Annual Bonus Pool Guideline

## Financial Security Assurance Holdings Ltd.(including its direct and indirect subsidiaries, the “Company”) maintains anannual bonus pool (the “Bonus Pool”) for the benefit of Company employees equalto a predetermined percentage (the “Specified Percentage”) of the increase inadjusted book value (“ABV”) of the Company during the applicable year (asderived from the Company’s IFRS financial statements), excluding unrealizedgains and losses on investments, net of tax, and excluding the mark-to-market,net of tax, of investment grade credit derivatives, but including a return onequity (“ROE”) modifier described below. For the 2004 Bonus Pool, the Human Resources Committee of the Board ofDirectors of the Company (the “HR Committee”) has set the Specified Percentageat 11.25%.  The increase in ABV duringthe applicable year will be equal to (a) the percentage growth in ABV per shareduring such year, with credit given for dividends paid, multiplied by (b) ABVas of the beginning of such year.  The HRCommittee retains the right to evaluate the Bonus Pool formula annually;however, the intent is to maintain the Bonus Pool formula as long as practicalto promote stability.

## The ROE modifier will adjust downward thepercentage growth in ABV per share if the “Target ROE” exceeds the ROE achievedin the aggregate for all transactions insured during the applicable year (the “ActualAverage ROE”), with a maximum adjustment of 2%. The “Target ROE” equals the after-tax book yield on the Company’sinvestment portfolio (excluding the investment portfolios for FinancialProducts, variable interest entities, and refinanced transactions) (determinedas of the December 31 immediately preceding the compensation year) plus 9%,with a maximum Target ROE of 15%.  In theevent that the Actual Average ROE is less than the Target ROE for any year,then the percentage growth in ABV per share for such year will be reduced by anamount equal to 1⁄2 the excess of the Target ROE (expressed as a percentage) overthe Actual Average ROE (expressed as a percentage), subject to a maximumreduction of 2%.

## Thefollowing example illustrates the calculation of the Bonus Pool, including theeffect of the ROE modifier, based on the assumptions below:

| ABV at beginning of year:                                      | $4 billion | After-tax portfolio book yield | 5%     |
|----------------------------------------------------------------|------------|--------------------------------|--------|
| Growth in ABV per share:                                       | 13%        | Target ROE                     | 14%    |
| Specified Percentage:                                          | 11.25%     | Actual Average ROE             | 12%    |
|                                                           |       |                           |   |
| ROE modifier = 1⁄2 x (14% - 12%) = 1%                       |       |
|                                                           |       |                           |   |
| Bonus Pool = $4 billion x (13% - 1%) x 11.25% =  $54.0 million |       |

 

## Amounts of the Bonus Pool in respect of any year,determined as provided above, that are not distributed to employees for thatyear will be credited to a “Rainy Day Fund” that will be available insubsequent years to fund bonus payments to employees in excess of the BonusPool determined as provided above, provided that the Rainy Day Fund shall notexceed an amount equal to $25 million, adjusted to reflect increases in theConsumer Price Index from and after January 1, 2005.

 

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