Exhibit 10.5


 


To Be Used With Employment Agreement


 


Restricted Stock Agreement under

Assured Guaranty Ltd. 2004 Long-Term Incentive Plan


 


THIS AGREEMENT,
entered into as of the Grant Date (as defined in paragraph 1), by and between
the Participant and Assured Guaranty Ltd. (the “Company”):


 


WITNESSETH THAT:


 


WHEREAS, the
Company maintains the Assured Guaranty Ltd. 2004 Long-Term Incentive Plan (the “Plan”),
and the Participant has been selected by the committee administering the Plan
(the “Committee”) to receive a Restricted Stock Award under the Plan; and


 


WHEREAS, the
Participant and the Company agree that this Award is in full satisfaction of
the restricted stock awards to be granted to the Participant pursuant to
paragraph 7(a) of the employment agreement between the Company and the
Participant dated April 28, 2004;


 


NOW, THEREFORE, IT
IS AGREED, by and between the Company and the Participant, as follows:


 


1.  Terms of Award.  The following words and phrases used in this
Agreement shall have the meanings set forth in this paragraph 1:


 


(a)                                  The
“Participant” is                                .


 


(b)                                 The
“Grant Date” is                                                                                   .


 


(c)                                  The
number of “Covered Shares” shall be                      
shares of Stock.


 


Other words and
phrases used in this Agreement are defined pursuant to paragraph 18 or
elsewhere in this Agreement.


 


2.  Restricted Stock Award.  This Agreement specifies the terms of the “Restricted
Stock Award” granted to the Participant.


 


3.  Restricted Period.  Subject to the limitations of this Agreement,
the “Restricted Period” for each Installment of Covered Shares of the
Restricted Stock Award shall begin on the Grant Date and end as described in
the following schedule (but only if the Date of Termination has not occurred
before the end of the Restricted Period):


 





















 


	
  INSTALLMENT

  	
   

  	
  RESTRICTED PERIOD WILL END ON:

  
	
  1⁄4 of Covered Shares

  	
   

  	
  One year anniversary of
  the Grant Date

  
	
   

  	
   

  	
   

  
	
  1⁄4 of Covered Shares

  	
   

  	
  Two year anniversary of
  the Grant Date

  
	
   

  	
   

  	
   

  
	
  1⁄4 of Covered Shares

  	
   

  	
  Three year anniversary
  of the Grant Date

  
	
   

  	
   

  	
   

  
	
  1⁄4 of Covered Shares

  	
   

  	
  Four year anniversary
  of the Grant Date

  



 


The Restricted
Period shall end prior to the date specified in the foregoing schedule to the
extent set forth below:


 


(a)                                  For
Installments as to which the Restricted Period has not ended prior to the Date
of Termination, the Restricted Period for such Installments shall end upon the
Participant’s Date of Termination, if the Date of Termination occurs by reason
of the Participant’s Disability or death.


 


(b)                                 For
Installments as to which the Restricted Period has not ended prior to the date
of a Change in Control, the Restricted Period for such Installments shall end
upon a Change in Control, provided that such Change in Control occurs on or
before the Date of Termination.


 


(c)                                  For
Installments as to which the Restricted Period has not ended prior to the Date
of Termination, if the Participant’s employment is Terminated Without Cause,
the Participant shall be treated as though employed by the Company and
Subsidiaries after the Participant’s actual Date of Termination until the later
of (i) the date on which the Participant ceases receiving severance payments
under the Employment Agreement or (ii) the date on which the term of the
Employment Agreement expires.  Under
clause (ii), a notice of termination shall be deemed to constitute a notice of
non-renewal of the Employment Agreement term under the provisions of the
Employment Agreement to be effective as of the earliest date permitted under
the Employment Agreement.  The terms “Cause”
and “Terminated Without Cause” shall be defined as set forth in the Employment
Agreement.  Notwithstanding the
foregoing, if the Executive’s employment is Terminated without Cause, the provisions
of this paragraph (c) shall apply only if the Executive executes and returns to
the Company a general release and waiver of all claims against the Company as
required under the Employment Agreement.


 


(d)                                 For
Installments as to which the Restricted Period has not ended prior to the Date
of Termination, if the Participant’s Date of Termination occurs because of
Retirement, the Participant shall be treated as though employed by the Company
and Subsidiaries after the Participant’s actual Date of Termination until the
Restricted Period has ended with respect to all Installments.


 


4.  Transfer and Forfeiture of Shares.  If the Restricted Period with respect to any
Installment of the Covered Shares ends on or before the Participant’s Date of
Termination, then 


 


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at the end of such Restricted Period, that Installment
of Covered Shares shall be transferred to the Participant free of all
restrictions (except for restrictions described in paragraph 10).  If the Restricted Period with respect to any
Installments does not end on or before the Participant’s Date of Termination,
then as of the Participant’s Date of Termination, the Participant shall forfeit
such Installments.  However, the
Committee, in its sole discretion, may accelerate the end of the Restricted
Period or provide for the vesting of the Covered Shares under circumstances
that such vesting would not otherwise occur in its sole discretion, based on
such factors as the Committee deems appropriate.


 


5.  Withholding.  All deliveries and distributions under this
Agreement are subject to withholding of all applicable taxes.  At the election of the Participant, and
subject to such rules and limitations as may be established by the Committee
from time to time, such withholding obligations may be satisfied through the
surrender of shares of Stock which the Participant already owns, or to which
the Participant is otherwise entitled under the Plan; provided, however, that
such shares may be used to satisfy not more than the Company’s minimum
statutory withholding obligation (based on minimum statutory withholding rates
for Federal and state tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).


 


6.  Transferability.  Except as otherwise provided by the
Committee, the Restricted Stock Award may not be sold, assigned, transferred,
pledged or otherwise encumbered during the Restricted Period.


 


7.  Dividends.  The Participant shall not be prevented from
receiving dividends and distributions paid on the Covered Shares of Restricted
Stock merely because those shares are subject to the restrictions imposed by
this Agreement and the Plan; provided, however that no dividends or
distributions shall be payable to or for the benefit of the Participant with
respect to record dates for such dividends or distributions for any Covered
Shares occurring on or after the date, if any, on which the Participant has
forfeited those shares.


 


8.  Voting.  The Participant shall not be prevented from voting
the Restricted Stock Award merely because those shares are subject to the
restrictions imposed by this Agreement and the Plan; provided, however, that
the Participant shall not be entitled to vote Covered Shares with respect to
record dates for any Covered Shares occurring on or after the date, if any, on
which the Participant has forfeited those shares.


 


9.  Registration of Restricted Stock Award.  Each certificate issued in respect of the
Covered Shares awarded under this Agreement shall be registered in the name of
the Participant.


 


10.  Cancellation and Rescission of Restricted
Stock Award.


 


(a)                                  The
Committee may cancel, rescind, suspend, withhold or otherwise limit or restrict
the Restricted Stock Award at any time if the Participant engages in any “Detrimental
Activity.”


 


(b)                                 At
the end of the Restricted Period with respect to an Installment and prior to
the transfer of the Covered Shares to the Participant, the Participant shall
certify, to the extent required by the Committee, in a manner acceptable to the
Committee, that the Participant 


 


3





















 


is not
engaging and has not engaged in any Detrimental Activity.  In the event a Participant has engaged in any
Detrimental Activity prior to, or during the six months after, the vesting of
any Installment of Covered Shares, such vesting may be rescinded by the
Committee within two years thereafter. 
In the event of any such rescission, the Participant shall pay to the
Company the amount of any gain realized as a result of the rescinded vesting,
in such manner and on such terms and conditions as may be required by the
Company, and the Company shall be entitled to set-off against the amount of any
such gain any amount owed to the Participant by the Company and/or Subsidiary.


 


11.  Heirs and Successors.  This Agreement shall be binding upon, and
inure to the benefit of, the Company and its successors and assigns, and upon
any person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company’s assets and business.  If any benefits deliverable to the
Participant under this Agreement have not been delivered at the time of the
Participant’s death, such benefits shall be delivered to the Designated
Beneficiary, in accordance with the provisions of this Agreement and the
Plan.  The “Designated Beneficiary” shall
be the beneficiary or beneficiaries designated by the Participant in a writing
filed with the Committee in such form and at such time as the Committee shall
require.  If a deceased Participant fails
to designate a beneficiary, or if the Designated Beneficiary does not survive
the Participant, any rights that would have been exercisable by the Participant
and any benefits distributable to the Participant shall be distributed to the
legal representative of the estate of the Participant.  If a deceased Participant designates a
beneficiary and the Designated Beneficiary survives the Participant but dies
before the complete distribution of benefits to the Designated Beneficiary
under this Agreement, then any benefits distributable to the Designated
Beneficiary shall be distributed to the legal representative of the estate of
the Designated Beneficiary.


 


12.  Administration.  The authority to manage and control the operation
and administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan.  Any interpretation
of this Agreement by the Committee and any decision made by it with respect to
this Agreement is final and binding on all persons.  The Committee shall have the authority to
obtain such information from the Participant (including tax return information)
as it determines may be necessary to confirm that the Participant is in
compliance with the requirements applicable to Detrimental Activity, and if the
Participant fails to provide such information, the Committee may conclude that
the Participant is not in compliance with such requirements.


 


13.  Plan Governs.  Notwithstanding anything in this Agreement to
the contrary, this Agreement shall be subject to the terms of the Plan, a copy
of which may be obtained by the Participant from the office of the Secretary of
the Company; and this Agreement is subject to all interpretations, amendments,
rules and regulations promulgated by the Committee from time to time pursuant
to the Plan.


 


14.  Not An Employment Contract.  The Restricted Stock Award will not confer on
the Participant any right with respect to continuance of employment or other
service with the Company or any Related Company, nor will it interfere in any
way with any right the Company or any Related Company would otherwise have to
terminate or modify the terms of such Participant’s employment or other service
at any time.


 


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15.  Notices.  Any written notices provided for in this
Agreement or the Plan shall be in writing and shall be deemed sufficiently
given if either hand delivered or if sent by fax or overnight courier, or by
postage paid first class mail.  Notices
sent by mail shall be deemed received three business days after mailing but in
no event later than the date of actual receipt. 
Notices shall be directed, if to the Participant, at the Participant’s
address indicated by the Company’s records, or if to the Company, at the
Company’s principal executive office.


 


16.  Fractional Shares.  In lieu of issuing a fraction of a share,
resulting from an adjustment of the Restricted Stock Award pursuant to the Plan
or otherwise, the Company will be entitled to pay to the Participant an amount
equal to the fair market value of such fractional share.


 


17.  Amendment.  This Agreement may be amended in accordance
with the provisions of the Plan, and may otherwise be amended by written
agreement of the Participant and the Company without the consent of any other
person.


 


18.  Definitions.  For purposes of this Agreement, words and
phrases shall be defined as follows:


 


(a)                                  Change
in Control.  The term “Change in Control”
shall be defined as set forth in the Plan.


 


(b)                                 Date
of Termination.  A Participant’s “Date
of Termination” means, with respect to an employee, the date on which the
Participant’s employment with the Company and Subsidiaries terminates for any
reason, and with respect to a Director, the date immediately following the last
day on which the Participant serves as a Director; provided that a Date of
Termination shall not be deemed to occur by reason of a Participant’s transfer
of employment between the Company and a Subsidiary or between two Subsidiaries;
further provided that a Date of Termination shall not be deemed to occur by
reason of a Participant’s cessation of service as a Director if immediately
following such cessation of service the Participant becomes or continues to be
employed by the Company or a Subsidiary, nor by reason of a Participant’s
termination of employment with the Company or a Subsidiary if immediately
following such termination of employment the Participant becomes or continues to
be a Director; and further provided that a Participant’s employment shall not
be considered terminated while the Participant is on a leave of absence from
the Company or a Subsidiary approved by the Participant’s employer.


 


(c)                                  Detrimental
Activity.  The term “Detrimental
Activity” shall mean (i) a violation of paragraph 11 of the Employment
Agreement (relating to competition) during the period in which such activity is
prohibited under the Employment Agreement; or (ii) a violation of paragraph 12
of the Employment Agreement (relating to confidentiality).


 


(d)                                 Director.  The term “Director” means a member of the
Board, who may or may not be an employee of the Company or a Subsidiary.


 


(e)                                  Disability.  The Participant shall be considered to have a
“Disability” during the period in which the Participant is unable, by reason of
a medically determinable physical or mental 


 


5





















 


impairment,
to engage in any substantial gainful activity, which condition, in the opinion
of a physician selected by the Committee, is expected to have a duration of not
less than 120 days.


 


(f)                                    Employment
Agreement.  “Employment Agreement”
shall mean the agreement between the Participant and the Company dated February
11, 2004 or any successor agreement thereto.


 


(g)                                 Retirement.  “Retirement” of a Participant shall mean with
respect to an employee of the Company or a Subsidiary, the occurrence of a
Participant’s Date of Termination after the Participant has completed three
years of service and attained age 55. 
For purposes of this definition, years of service shall be determined in
accordance with rules established by the Committee, and shall take into account
service with the Company and its Subsidiaries, as well as service with ACE
Limited and its subsidiaries occurring prior to the initial public offering of
stock of the Company.


 


(h)                                 Plan
Definitions.  Except where the
context clearly implies or indicates the contrary, a word, term, or phrase used
in the Plan is similarly used in this Agreement.


 


IN WITNESS WHEREOF, the Participant has executed the
Agreement, and the Company has caused these presents to be executed in its name
and on its behalf, all as of the Grant Date.


 


Assured Guaranty
Ltd.


 


	
  By:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant

  
	
   

  
	
   

  	
   

  



 


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