Exhibit 10.62


 


ASSURED GUARANTY LTD.

SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN


 


(As Amended and Restated
Effective January 1, 2009)


 


 


Mayer Brown LLP


 

















 


ADOPTION OF ASSURED GUARANTY LTD.


SUPPLEMENTAL EMPLOYEE RETIREMENT
PLAN


 


WHEREAS, the Board of Directors of Assured
Guaranty Ltd. (the “Company”), by resolutions adopted on
                        ,
authorized the General Counsel of the Company (and certain other officers of the
Company) to adopt modifications of the Assured Guaranty Ltd. Supplemental
Employee Retirement Plan (the “Plan”) to conform the Plan to the requirements
of Section 409A of the US Internal Revenue Code (“Section 409A”); and


 


WHEREAS, James M. Michener, the General
Counsel of the Company, has submitted the Plan to the chairman (the “Chairman”)
of the Compensation Committee of the Board of Directors with changes to conform
the Plan to the requirements of Section 409A, as attached hereto, and the
Chairman has approved the changes;


 


NOW, THEREFORE, the undersigned, James M.
Michener, hereby adopts the Plan in the form attached hereto, to be effective
with respect to all awards granted thereunder.


 


 


	
   

  	
   

  
	
  James M. Michener

  	
   

  
	
  General Counsel of Assured Guaranty Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:
                                         ,
  2008

  	
   

  



 


ii

















 


ASSURED GUARANTY LTD.
 SUPPLEMENTAL EMPLOYEE RETIREMENT  PLAN


 


SECTION 1

GENERAL


 


1.1.  Purpose
and Effective Date.  Assured Guaranty
Ltd. (the “Company”) has established the Assured Guaranty Ltd. Employee
Retirement Plan (the “Retirement Plan”) to provide retirement income for its
eligible employees and the eligible employees of each Related Company (as
defined in subsection 1.2) which, with the consent of the Company, adopts the
Plan.  Contrary to the desire of the
Company, the amount of contributions which may be made to the Retirement Plan
for the benefit of an employee may be limited by reason of the application of
certain provisions of the Internal Revenue Code of 1986 of the United States of
America, as amended (the “Code”). The Company has established the Assured
Guaranty Ltd. Supplemental Employee Retirement (the “Plan”) to assure that
affected individuals will receive benefits in amounts comparable to the amounts
that they would have received under the Retirement Plan if such limitations of
the Code did not apply to the Retirement Plan. 
The Plan also allows for additional contributions to provide additional
retirement security for the participants. 
The provisions set forth herein constitute an amendment, restatement and
continuation of the Plan as in effect immediately prior to January 1, 2009
(the “Effective Date”), subject to the following:


 


(a)                                  The
Plan as set forth herein shall apply to distributions under the Plan commencing
on or after the Effective Date (excluding payments made before or made after
the Effective Date that are part of a series of installment payments that
commenced prior to the Effective Date); provided that payments which commenced
prior to the Effective Date will be subject to the applicable provisions of the
Plan as in effect prior to the Effective Date.


 


(b)                                 All
amounts deferred under the Plan will be subject to the provisions of section
409A of the Code and applicable guidance issued thereunder (“Section 409A”),
regardless of whether such amounts were deferred (within the meaning of Section 409A)
on, prior to, or after January 1, 2005.


 


1.2.  Employers
and Related Companies.  The term “Related
Company” means any corporation or trade or business during any period during
which it is, along with the Company, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in
sections 414(b) and 414(c), respectively, of the Code.  The Company and each Related Company, which,
with the Company’s consent, adopts the Plan are referred to below collectively
as the “Employers” and individually as an “Employer”.


 


1.3.  Plan
Administration.  The authority to
control and manage the operation and administration of the Plan shall be vested
in the Committee appointed by the Company to act under the Retirement Plan;
provided, however, that, subject to the terms of the Plan, payment of any
benefits to, or on behalf of Participants pursuant to Section 3 may be
made at the direction of any two of the following officers of the Company:  (a) Chief Executive Officer (b) Chief
Financial Officer, or (c) General Counsel. 
In controlling and managing the operation and administration of the
Plan, the Committee shall have the same rights, powers and duties as those


 


1

















 


delegated to it under the Retirement Plan, which
includes full and discretionary power and authority to interpret and construe
the provisions of the Plan and to determine the amount of benefits and the
rights or eligibility of employees or Participants (as defined in subsection
2.1) under the Plan, and such other power and authority as may be necessary to
discharge its duties hereunder.  Any
interpretation of the Plan and any decision made by the Committee on any matter
within the discretion of the Committee shall be binding on all persons.  A misstatement or other mistake of fact shall
be corrected when it becomes known, and the Committee shall make such
adjustment on account thereof as it considers equitable and practicable.  The Committee may delegate such of its
ministerial or discretionary duties and functions as it may deem appropriate to
any employee or group of employees of any Employer.


 


1.4.  Applicable
Laws.  The Plan shall be construed
and administered in accordance with the laws of Bermuda.


 


1.5.  Gender
and Number.  Where the context
admits, words in any gender shall include any other gender, words in the
singular shall include the plural and the plural shall include the singular.


 


1.6.  Plan
Year.  The “Plan Year” shall be the
twelve-consecutive month period beginning on each January 1.


 


1.7.  Notices.  Any notice or document required to be filed
with the Committee under the Plan will be properly filed if delivered or mailed
by registered mail, postage prepaid, to the Committee, in care of the Company,
at its principal executive offices.  Any
notice required under the Plan may be waived by the person entitled to notice.


 


1.8.  Form and
Time of Elections.  Unless otherwise
specified herein or as otherwise permitted by the Committee, any election or
consent permitted or required to be made or given by any Participant or other
person entitled to benefits under the Plan, and any permitted modification or
revocation thereof, shall be made in writing to the Committee; provided,
however, that any such election or consent shall be irrevocable to the extent
required by Section 409A.


 


1.9.  Evidence.  Evidence required of anyone under the Plan
may be by certificate, affidavit, document or other information which the
person acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.


 


1.10.  Action
by Employers.  Any action required or
permitted to be taken under the Plan by any Employer which is a corporation
shall be by resolution of its Board of Directors, or by a person or persons
authorized by its Board of Directors. 
Any action required or permitted to be taken by any Employer which is a
partnership shall be by a general partner of such partnership or by a duly
authorized officer thereof.


 


1.11.  Limitations
on Provisions.  The provisions of the
Plan and any benefits payable hereunder shall be limited as described
herein.  Any benefit payable under the
Retirement Plan shall be paid solely in accordance with the terms and conditions
of the applicable Retirement 


 


2

















 


Plan and nothing in this Plan shall operate or be
construed in any way to modify, amend, or affect the terms and provisions of
the Retirement Plan.


 


1.12.  Assignment
and Alienation; Forfeitures.  The
benefits payable to any Participant or Beneficiary under the Plan may not be
voluntarily or involuntarily pledged, assigned, alienated, transferred or
otherwise anticipated.  In the event a
Participant or Beneficiary attempts to do so, any amount that is subject to the
purported pledge, assignment, alienation, transfer or other anticipation shall
be immediately forfeited and neither the Participant nor his Beneficiary shall
have any further rights to such benefits.


 


SECTION 2

PARTICIPATION


 


2.1.  Participation.  Each employee of an Employer shall become a “Participant”
as of the earlier of the date on which he becomes a participant in the
Retirement Plan or the date on which he is designated as a Participant by the
Committee.  Once an eligible employee
becomes a Participant in the Plan, as long as he continues to have an Account
balance under the Plan he will remain a Participant for all purposes under the
Plan, except for purposes of the contribution provisions of Section 3.  However, U.S. taxpayer employees of Assured
Guaranty Re Ltd. in Bermuda shall not accrue additional benefits under the Plan
on and after January 1, 2009, except that this sentence shall not apply to
those who are required to participate in the plan maintained by Assured
Guaranty Ltd. in accordance with the Bermuda National Pension Scheme
(Occupations Pensions) Act 1998, as amended). 
For the avoidance of doubt, the preceding sentence shall not affect the
continuing adjustment of Accounts for investment experience in accordance with
the Plan, and further provided that the preceding sentence shall not require
accelerated distribution of Accounts under the Plan.


 


2.2.  Plan
Not Contract of Employment.  The Plan
does not constitute a contract of employment, and participation in the Plan
will not give any employee the right to be retained in the employ of the
Company nor any right or claim to any benefit under the Plan, unless such right
or claim has specifically accrued under the terms of the Plan.


 


SECTION 3

AMOUNT AND PAYMENT OF PLAN BENEFIT


 


3.1.  Accounts.  The Committee shall maintain “Supplemental
Accounts” in the name of each Participant under the Plan which will reflect the
amount, expressed in United States dollars, to which the Participant may become
entitled under the Plan.  A Participant’s
Supplemental Accounts shall be credited in each Plan Year as follows:


 


(a)                                  For
any Plan Year, in the event the Participant’s before-tax elective contributions
to the Retirement Plan are limited by the provisions of sections 401(a)(17),
401(k)(3), 402(g) or 415 of the Code, as applicable, his compensation for
the Plan Year will continue to be reduced by, and the Participant’s
Supplemental Before-Tax Account credited with, an amount equal to the amount of
before-tax elective contributions that would have been made under the
Retirement Plan had the provisions of sections 401(a)(17), 401(k)(3), 


 


3

















 


402(g) or 415
of the Code, as applicable, not applied to him, and for this purpose it shall
be assumed that the Participant makes the maximum before-tax elective
contributions to the Retirement Plan (regardless of whether the Participant in
fact makes the maximum contribution); provided, however, that such continuing
before-tax elective contributions to this Plan shall be made pursuant to an
election made by the Participant prior to the beginning of the Plan Year (or
with respect to a newly-eligible Participant, within 30 days of first becoming
eligible to participate, which election shall apply only to compensation
payable after the date of such election), which election shall indicate the
percentage of compensation to be contributed to this Plan after before-tax
elective contributions to the Retirement Plan have been limited under sections
401(a)(17), 401(k)(3), 402(g) or 415 of the Code.  Such election with respect to a Plan Year
shall be irrevocable on and after the beginning of that Plan Year.  Credits to the Participant’s Supplemental
Before-Tax Account pursuant to this paragraph 3.1(a) shall be made at the
same time that before-tax elective contributions would otherwise have been
credited to his accounts under the Retirement Plan.


 


(b)                                 Subject
to the requirements of paragraph 3.1(a), for any Plan Year, a Participant’s
Supplemental Matching Account shall be credited with an amount equal to the
difference, if any, between (a) the matching contributions that would have
been contributed on behalf of the Participant to the Retirement Plan for that
Plan Year, in accordance with the terms thereof and based on his before-tax
elective contributions under the Retirement Plan and this Plan, determined
without regard to the limitations of sections 401(a)(17), 401(k)(3), 401(m),
402(g) or 415 of the Code, and (b) the amount of matching contributions
made to the Retirement Plan on behalf of the Participant, or if greater, the
amount of matching contributions that would have been made to the Retirement
Plan if the Participant made the maximum before-tax elective contributions to
the Retirement Plan (regardless of whether the Participant in fact makes the
maximum contribution).  Credits to the
Participant’s Supplemental Matching Account pursuant to this paragraph 3.1(b) shall
be made at the same time that matching contributions would otherwise have been
credited to his accounts under the Retirement Plan.


 


(c)                                  A
Participant’s “Discretionary Matching Contribution Account” shall be credited
for a Plan Year in the amount, if any, determined by the Company in its sole
discretion, on behalf of each Participant who is employed by an Employer on the
last day of that year, and with respect to whom before-tax contributions that
could have been made by the Participant to the Retirement Plan have been
limited for such Plan Year as a result of the application of sections
401(a)(17), 401(k)(3), 401(m), 402(g) or 415 of the Code.  Such Discretionary Matching Contribution
shall be expressed as a percentage of the contribution credited to the
Participant’s Supplemental Before-Tax Account pursuant to paragraph (a) above
and, in the discretion of the Company, the maximum before-tax elective
contributions to the Retirement Plan (regardless of whether the Participant in
fact makes the maximum contribution); provided, however, that the Discretionary
Matching Contribution with respect to any Plan Year shall not exceed fifty
percent of that portion of the sum of the Participant’s before-tax elective
contribution to the Retirement Plan (based on the assumption that the
Participant made the maximum before-tax elective 


 


4

















 


contribution to
the Retirement Plan) and the Participant’s before-tax elective contribution to
this Plan which does not exceed six percent (one percent with respect to a
Participant who is also an active participant in the Assured Guaranty Bermuda
Pension Plan, as defined in the Retirement Plan) of the Participant’s
compensation (as defined in the Retirement Plan, but disregarding the
limitations therein) for that Plan Year.


 


(d)                                 For
any Plan Year, a Participant’s Supplemental Core Account shall be credited with
an amount equal to the difference, if any, between (a) the Employer Core
Contribution that would have been contributed on behalf of the Participant to
the Retirement Plan for that Plan Year, in accordance with the terms thereof
determined without regard to the limitations of sections 401(a)(17) or 415 of
the Code (assuming the Participant made the maximum contributions to the
Retirement Plan, regardless of whether the Participant in fact makes the
maximum contribution) and (b) the amount of the Employer Core
Contributions that would have been made to the Retirement Plan on behalf of the
Participant (assuming the Participant made the maximum contributions to the
Retirement Plan, regardless of whether the Participant in fact makes the
maximum contribution, and assuming that such contributions would be subject to
the limits of sections 401(a)(17) and 415 of the Code).  Credits to the Participant’s Supplemental
Core Account pursuant to this paragraph 3.1(d) shall be made at the same
time that Employer Core Contributions would otherwise have been credited to his
accounts under the Retirement Plan.


 


(e)                                  For
any Plan Year, a Participant’s Supplemental Core Account may be credited with
an additional amount, as determined by the Company in its sole discretion,
which amount, if any, shall be allocated to the accounts of that group of
Participants designated by the Company it its sole discretion.  Such “Discretionary Core Contribution” shall
be allocated to the accounts of such designated Participants in an amount equal
to a percentage of each such Participant’s compensation for the Plan Year.  Credits to the Participant’s Supplemental
Core Account of a Discretionary Core Contribution pursuant to this paragraph
3.1(e) shall be made as soon as practicable following the Company’s
determination to credit such Discretionary Core Contribution.


 


3.2.  Adjustment
of Accounts.  Each Participant’s
Accounts shall be adjusted in accordance with this Section 3 in a uniform
manner as of each Valuation Date, as follows:


 


(a)                                  first, charge to the Account balance the
amount of any distributions under the Plan with respect to that Account that
have not previously been charged;


 


(b)                                 then, adjust the Account balance for the
applicable Investment Return Rate(s); and


 


(c)                                  then, credit to the Account balance the
amount to be credited to that Account in accordance with subsection 3.1 that
have not previously been credited.


 


Except as otherwise designated by the Committee, the term “Valuation
Date” means the last day of each calendar quarter.


 


5














 


3.3.  Investment
Return Rates.  The “Investment Return
Rate(s)” with respect to the Account(s), or portions of the Supplemental
Account(s), of any Participant for any period shall be the Investment Return
Rate(s) elected by the individual in accordance with subsection 3.4 from
among such investment alternatives (if any) for that period which, in the
discretion of the Committee, are offered from time to time under this
subsection 3.3.


 


3.4.  Participant
Selection of Investment Return Rate. 
The Investment Return Rate alternatives under the Plan, and a
Participant’s ability to choose among Investment Return Rate alternatives,
shall be determined in accordance with rules established by the Committee
from time to time; provided, however, that the Company may not modify the
Investment Return Rate with respect to periods prior to the adoption of such
modification.


 


3.5.  Statement
of Accounts.  As soon as practicable
after the last day of each Plan Year, the Committee will cause to be delivered
to each Participant a statement of the balance of his Supplemental Account as
of that day.


 


3.6.  Distribution.  Subject to the following provisions of this
subsection 3.6 and subsection 3.8, a Participant’s Supplemental Account balance
shall be payable to the Participant in accordance with the rules and
regulations set forth in Exhibit A, which forms part of the Plan, and in
accordance with such other restrictions and limitations imposed by the
Committee and applicable law.  Subject to
any applicable currency exchange laws, payments shall be made in such currency
as the Committee shall elect, based on the currency exchange rate of the
Trustee of the Retirement Plan as of the date of payment.  In the event of a Participant’s death, the
amount which would otherwise be payable to the Participant shall be paid to one
or more beneficiaries designated by the Participant for purposes of the Plan in
a writing filed with the Committee prior to the date of death.  Any such designation shall cancel any
previous designation by the Participant. 
If no such designation is on file on the date of the Participant’s
death, or if the designated beneficiary predeceases the Participant, the
Participant’s Supplemental Account balance shall be paid to the Participant’s
estate.


 


3.7.  Distributions
to Persons Under Disability.  In the
event a Participant or his beneficiary is declared incompetent and a
conservator or other person legally charged with the care of his person or of
his estate is appointed, any benefit to which such Participant or beneficiary
is entitled under the Plan shall be paid to such conservator or other person
legally charged with the care of his person or of his estate.


 


3.8.  Forfeiture
of Certain Accounts.  Notwithstanding
any provision of the Plan to the contrary, in no event shall any amount
attributable to the Participant’s Supplemental Matching Account, Supplemental
Discretionary Matching Account, and Supplemental Core Account be payable to or
on account of a Participant whose Termination Date occurs prior to the
Participant’s completion of twelve consecutive months of employment with an
Employer for any reason other than the death of the Participant or if the
Participant attains age 65; provided, however, for purposes of this sentence,
each Participant who was an employee of ACE Limited or a subsidiary of ACE
Limited immediately prior to the Effective Date and who became an employee of
an Employer in connection with the initial public offering of shares of Assured
Guaranty Ltd shall be credited with twelve consecutive months of service of
employment with 


 


6

















 


the Employers on the later of the Effective Date or
the first date on which he is employed by an Employer.


 


3.9.  Termination
Date.  A Participant’s “Termination
Date” is the date on which the Participant ceases to be employed by the Company
and all of the Related Companies, subject to the following:


 


(a)                                  The
employment relationship will be deemed to have ended at the time the
Participant and his employer reasonably anticipate that the level of bona fide
services the Participant would perform for the Company and the Related
Companies after such date (whether as an employee or independent contractor,
but not as a director) would permanently decrease to no more than 20% of the average
level of bona fide services performed over the immediately preceding 36 month
period (or the full period of service to the Company and the Related Companies
if the Participant has performed services for the Company and the Related
Companies for less than 36 months).  In
the absence of an expectation that the Participant will perform at the
above-described level, the date of termination of employment will not be
delayed solely by reason of the Participant continuing to be on the Company’s
and the Related Companies’ payroll after such date.


 


(b)                                 The
employment relationship will be treated as continuing intact while the
Participant is on a bona fide leave of absence (determined in accordance with
Treas. Reg. §409A-1(h)).


 


(c)                                  The
determination of a Participant’s termination of employment by reason of a sale
of assets, sale of stock, spin-off, or other similar transaction of the Company
or a Related Company will be made in accordance with Treas. Reg. §1.409A-1(h).


 


3.10.  Transfers
from ACE Limited Supplemental Retirement Plan.  Each employee of an Employer who satisfies
the following conditions shall have an Account established on his behalf under
the Plan, and such Account shall be credited with an amount reflecting amounts
attributable to such individual’s participation in the ACE Limited Supplemental
Retirement Plan:


 


(a)                                  the
Participant was an employee of ACE Limited or a subsidiary of ACE Limited
immediately prior to the Effective Date;


 


(b)                                 the
Participant became an employee of an Employer in connection with the initial
public offering of shares of the Company; and


 


(c)                                  the
Participant was a participant in the ACE Limited Supplemental Retirement Plan.


 


An
employee of an Employer who satisfies the foregoing conditions shall become a
Participant in the Plan in accordance with the terms and conditions of the
Plan.  If an employee of an Employer is
not otherwise eligible to participate in the Plan, he shall be treated as a
Participant only with respect to amounts credited to his Accounts which are
attributable to the obligations assumed by his Employer from the ACE Limited
Supplemental Retirement Plan until such employee has met the requirements for
participation in the Plan.  The Accounts
of each Participant under the Plan, including any portion of an Account
transferred pursuant to this 


 


7

















 


subsection
3.10, shall be subject to the terms of the Plan, including, but not limited to,
the terms relating to Investment Return Rates and the restrictions regarding the
forms and time of payment; and the portion of a Participant’s Account balances
which is attributable to amounts transferred pursuant to this subsection 3.10
shall be payable from the Plan only after the date on which the Participant is
otherwise eligible for a distribution from the Plan.


 


SECTION 4

SOURCE OF BENEFIT PAYMENTS


 


4.1.  Liability for Benefit Payments.  The amount of any benefit payable under the
Plan shall be paid from the general revenues of the Employer of the Participant
with respect to whom the benefit is payable; provided, however, that if a
Participant has been employed by more than one Employer, the portion of his
Plan benefits payable by any such Employer shall be that portion accrued while
the Participant was employed by that Employer, and earnings on such portion;
and provided further, that if any portion of a Participant’s Plan benefit is
attributable to amounts transferred to the Plan pursuant to subsection 3.10 of
the Plan, that portion of the Participant’s benefit attributable to such
transferred amounts, and earnings on such portion, shall be payable by the
Employer that assumed the obligation to pay such transferred benefit to the
Participant.  An Employer’s obligation
under the Plan shall be reduced to the extent that any amounts due under the
Plan are paid from one or more trusts, the assets of which are subject to the
claims of general creditors of the Employer or any affiliate thereof; provided,
however, that nothing in the Plan shall require the Company or any Employer to
establish any trust to provide benefits under the Plan.


 


4.2.  No
Guarantee.  Neither a Participant nor
any other person shall, by reason of the Plan, acquire any right in or title to
any assets, funds or property of the Employers whatsoever, including, without
limitation, any specific funds, assets, or other property which the Employers,
in their sole discretion, may set aside in anticipation of a liability under
the Plan.  A Participant shall have only
a contractual right to the amounts, if any, payable under the Plan, unsecured
by any assets of the Employers.  Nothing
contained in the Plan shall constitute a guarantee by any of the Employers that
the assets of the Employers shall be sufficient to pay any benefits to any
person.


 


4.3.  Successors.  The obligations of the Company and each
Employer under the Plan shall be binding on any assignee or successor in
interest thereto.  Prior to any merger,
consolidation or sale of assets, the Company, or if applicable, the Employer,
shall require any such successor to expressly assume all of the Company’s, or
if applicable, all of the Employer’s, obligations under the Plan.


 


SECTION 5

CLAIMS ADMINISTRATION


 


5.1.  General.  The Committee shall, in its sole discretion,
determine if a Participant is entitled to receive payment of a benefit under
the Plan.  If a Participant, beneficiary
or his or her representative is denied all or a portion of an expected Plan
benefit for any reason and the 


 


8

















 


Participant, beneficiary or his or her representative
desires to dispute the decision of the Committee, he or she must file a written
notification of his or her claim with the Committee.


 


5.2.  Claims
Procedure.  Upon receipt of any
written claim for benefits, the Committee shall be notified and shall give due
consideration to the claim presented.  If
any Participant or beneficiary claims to be entitled to benefits under the Plan
and the Committee determines that the claim should be denied in whole or in
part, the Committee shall, in writing, notify such claimant within ninety (90)
days of receipt of the claim that the claim has been denied.  The Committee may extend the period of time
for making a determination with respect to any claim for a period of up to
ninety (90) days, provided that the Committee determines that such an extension
is necessary because of special circumstances and notifies the claimant, prior
to the expiration of the initial ninety (90) day period, of the circumstances
requiring the extension of time and the date by which the Plan expects to
render a decision.  If the claim is
denied to any extent by the Committee, the Committee shall furnish the claimant
with a written notice setting forth:


 


(a)                                  the
specific reason or reasons for denial of the claim;


 


(b)                                 a
specific reference to the Plan provisions on which the denial is based;


 


(c)                                  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


 


(d)                                 an
explanation of the provisions of this Section 5.


 


5.3.  Right
of Appeal.  A claimant who has a
claim denied wholly or partially under subsection 5.2 may appeal to the
Committee for reconsideration of that claim. 
A request for reconsideration under this subsection 5.3 must be filed by
written notice within sixty (60) days after receipt by the claimant of the
notice of denial under subsection 5.2.


 


5.4.  Review
of Appeal.  Upon receipt of an appeal
the Committee shall promptly take action to give due consideration to the
appeal.  Such consideration may include a
hearing of the parties involved, if the Committee feels such a hearing is
necessary.  In preparing for this appeal
the claimant shall be given the right to review pertinent documents and the
right to submit in writing a statement of issues and comments.  After consideration of the merits of the
appeal the Committee shall issue a written decision which shall be binding on
all parties.  The decision shall
specifically state its reasons and pertinent Plan provisions on which it
relies.  The Committee’s decision shall
be issued within sixty (60) days after the appeal is filed, except that the
Committee may extend the period of time for making a determination with respect
to any claim for a period of up to sixty (60) days, provided that the Committee
determines that such an extension is necessary because of special circumstances
and notifies the claimant, prior to the expiration of the initial sixty (60)
day period, of the circumstances requiring the extension of time and the date
by which the Plan expects to render a decision.


 


9

















 


5.5.  Designation.  The Committee may designate any other person
of its choosing to make any determination otherwise required under this Section 5.  Any person so designated shall have the same
authority and discretion granted to the Committee hereunder.


 


SECTION 6

AMENDMENT AND TERMINATION


 


The Company may, at any time, amend or terminate the Plan; provided,
however, that subject to the provisions of the following sentence, neither an
amendment nor a termination shall adversely affect the rights of any
Participant to benefits credited to a Participant’s account under the Plan as
of the date immediately prior to the date of the amendment or termination (but
subject to losses and earning allocable to such account after the date of the
amendment or termination) without the consent of the Participant.  The Company, by Plan amendment or
termination, may prospectively eliminate the right to have amounts credited to
any Supplemental Account pursuant to the provisions of subsection 3.1 or
subsection 3.3, or reduce the amount which is required to be credited to any
such account pursuant to those provisions. 
In no event may any such amendment, modification, or termination be
adopted or effective if it would result in accelerated recognition of income or
imposition of additional tax under Section 409A.


 


10

















 


Exhibit A


 


ASSURED GUARANTY LTD.
SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN


 


Distribution Rules and
Regulations


 


Subject to such restrictions and limitations as may be imposed by the
Committee, the following shall apply to the distribution of a Participant’s
Supplemental Account balances:


 


A-1.  Commencement of
Distribution.  Payment of the
Participant’s Supplemental Account balances shall be made (or, if payment is
made in installments, shall commence) within 60 days of the Participant’s
Termination Date, subject to the following:


 


(a)                                  If the Participant
becomes Permanently Disabled prior to his Termination Date (regardless of
whether the Participant remains employed for a period after becoming
Permanently Disabled), the Participant’s Supplemental Account balances will be
paid in a lump sum within 60 days of becoming Permanently Disabled, without
regard to any election made by the Participant to receive installments.  A Participant will be considered to be “Permanently
Disabled” for purposes of the Plan if he would be treated as “disabled” in
accordance with the provisions of Treas. Reg. §1.409A-3(i)(4).


 


(b)                                 If the Participant’s
Termination Date is his date of death, the Participant’s Supplemental Account
balances will be paid in a lump sum within 60 days of death.


 


(c)                                  If a Participant is a
Specified Employee at the time of his Termination Date, and payment of benefits
under the Plan is by reason of the Participant’s Termination Date, payments of
benefits under the Plan may not be paid before the date that is six months
after the Participant’s Termination Date or, if earlier, the date of death of
the Participant.  At the end of the
six-month period described in the preceding sentence, amounts that could not be
paid by reason of the limitation in this paragraph (c) shall be paid on
the first day of the seventh month following the Termination Date.  For purposes of the Plan, the term “Specified
Employee” shall be defined in accordance with Treas. Reg. §1.409A-1(i) and
such rules as may be established by the Chief Executive Officer of the
Company or his delegate from time to time.


 


A-2.  Lump Sum Distribution.  Except to the extent provided in subsection
A-3, a Participant’s Supplemental Account balances will be paid in a lump sum
in an amount equal to the Participant’s Supplemental Account balances
determined as of the Valuation Date next prior to the Benefit Commencement
Date.


 


A-3.  Installments.  A Participant may elect to have his
Supplemental Account balances paid in annual installments over a period elected
by the Participant not exceeding five years, subject to the following:


 


(a)                                  Payment will be made
in installments rather than a lump sum only if, at the time of the Participant’s
Termination Date, (i) the Participant has attained at least age 55, (ii) the
Participant has completed at least five Years of Service, and (iii) the
amount of the


 


11

















 


Participant’s Supplemental Account balances is equal to or greater than
$50,000 as of the Valuation Date coincident with or immediately prior to the
Participant’s Termination Date.  A
Participant’s “Years of Service” shall be measured by employment during a
twelve (12) month period commencing with the Participant’s date of hire and
anniversaries thereof.


 


(b)                                 Payment will be made
in installments rather than a lump sum only if the Participant’s election to
receive such installments is filed with the Committee no later than the 30th day following the date on which the
Participant first becomes eligible to participate in the Plan in accordance
with subsection 2.1.


 


(c)                                  If the Participant
dies while receiving installments, the Participant’s remaining Supplemental
Account balances will be paid in a lump sum within 60 days of death.


 


(d)                                 The amount of each
installment paid under this subsection A-3 will equal the result of dividing
the Participant’s Supplemental Account balances (determined as of the most
recent Valuation Date occurring before the date on which such payment is made)
by the number of installments remaining immediately before the payment.


 


(e)                                  The second, third,
fourth, and fifth annual installments (as applicable) will be paid during the
first, second, third, and fourth calendar years, respectively, after the
calendar year in which the Participant’s Termination Date occurs; provided that
(i) the time of payment within the calendar year will be determined by the
Committee, except that the installment payable in each such calendar year will
be paid not more than 30 days after the anniversary of the Termination Date
that occurs in that calendar year; and (ii) the payment of the first and
second installments will be subject to paragraph A-1(c) hereof (relating
to the six-month delay for Specified Employees).


 


A-4.  Unforeseeable Emergency.  The Committee may permit the distribution of
all or a portion of a Participant’s Account if the Committee, in its sole
discretion, determines that the Participant has experienced an unforeseeable
emergency, but only to the extent, if any, that such distribution would satisfy
the requirements of Treas. Reg. §1.409A-3(i)(3).  Upon a distribution to a Participant under
this subsection A-4, the Participant’s deferrals shall cease and no further
deferrals shall be made for such Participant for the remainder of the Plan
Year.


 


A-5.  Adjustments Prior to
Commencement Date and During Installments. 
Prior to payment of a Participant’s Supplemental Account balances in a
lump sum, and during the period installments are being paid under subsection
A-3, the remaining balances in the Participant’s Supplemental Accounts shall
continue to be invested at the direction of the Participant and credited with
earnings or losses in accordance with the provisions of the Plan.


 


12