Exhibit 10.63


 


ASSURED GUARANTY CORP.

SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN


 


(As Amended and Restated
Effective January 1, 2009)


 


 


Mayer Brown LLP


 

















 


ADOPTION OF ASSURED GUARANTY CORP.


SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN


 


WHEREAS, the Board of
Directors of Assured Guaranty Corp. (the “Company”), by resolutions adopted on November 7,
2008, authorized the General Counsel of the Company (and certain other officers
of the Company) to adopt modifications of the Assured Guaranty Corp.
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 to make certain other changes; and


 


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 Corp.

  	
   

  



 


 


Date: December 10, 2008


 


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ASSURED GUARANTY CORP.


SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


(As Amended and
Restated Effective January 1, 2009)


 


1.1.  Assured
Guaranty Corp., a Maryland corporation, (the “Company”), previously established
the Assured Guaranty Corp. Non-Qualified Profit Sharing Plan.  Effective January 1, 2006, the Company
adopted the amendment and restatement of the Assured Guaranty Corp.
Non-Qualified Profit Sharing Plan and renamed it as the Assured Guaranty Corp.
Supplemental Executive Retirement Plan (the “Plan”).  The Plan is maintained for the benefit of a
select group of management or highly compensated employees.  The Plan is an unfunded arrangement and is
intended to be exempt from the participation, vesting, funding, and fiduciary
requirements set forth in Title I of the ERISA. 
It is intended to comply with Section 409A of the Code.  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.


 


Article 1 - Definitions


 


1.1                               Account.


 


The bookkeeping account established for each
Participant as provided in Section 5.1 hereof.


 


1.2                               Administrator.


 


The Company, and any such committee or persons to whom
the Board of Directors of the Company delegates some or all of the authority to
control and manage the operation and administration of the Plan.


 


1.3                               Board.


 


The Board of Directors of the Company.


 


1.4                               Code.


 


The Internal Revenue Code of 1986, as amended.


 

















 


1.5                               Company.


 


Assured Guaranty Corp.


 


1.6                               Compensation.


 


The Participant’s “Compensation” as defined in the
Assured Guaranty Corp. Retirement Plan; provided, however, that “Compensation”
shall exclude any amount paid in the Plan Year but earned for services in a
prior year unless a Deferral Election was timely made with respect to such amount
in accordance with the requirements of the Plan and Code Section 409A.


 


1.7                               Deferrals.


 


The portion of Compensation that a Participant elects
to defer in accordance with Section 3.1 hereof.


 


1.8                               Deferral
Election.


 


The separate written agreement, submitted to the
Administrator, by which an Eligible Employee elects to make Deferrals to the
Plan in accordance with the requirements sections 3.1, 3.2 and 3.4 hereof.


 


1.9                               Disability.


 


A Participant will be considered to be “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).


 


1.10                        Effective
Date.


 


January 1, 2006.


 


1.11                        Eligible
Employee.


 


An Employee shall be considered an Eligible Employee
if such Employee is designated as an Eligible Employee by the Employer.  The designation of an Employee as an Eligible
Employee in any year shall not confer upon such Employee any right to be
designated as an Eligible Employee in any future Plan Year.


 


1.12                        Employee.


 


Any person employed by an Employer.


 


1.13                        Employer.


 


The Company and each Related Company which, with the
consent of the Company, adopts the Plan.


 


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1.14                        Employer
Core Retirement Contribution.


 


A core retirement contribution that may be made by the
Employer in its discretion and that is credited to the Participant’s Account in
accordance with the terms of Section 3.6 hereof.


 


1.15                        Employer
Discretionary Contribution.


 


A discretionary contribution that may be made by the
Employer in its discretion and that is credited to the Participant’s Account in
accordance with the terms of Section 3.7 hereof.


 


1.16                        ERISA.


 


The Employee Retirement Income Security Act of 1974,
as amended.


 


1.17                        Investment Fund or Index.


 


Each investment(s) which serves as a means to
measure value, increases or decreases with respect to a Participant’s Accounts.


 


1.18                        Matching
Contribution.


 


A contribution made by the Employer that is credited
to the Participant’s Account in accordance with the terms of Section 3.5
hereof.


 


1.19                        Participant.


 


An Eligible Employee who is a Participant as provided
in Article 2.


 


1.20                        Plan Year.


 


The 12-consecutive month period from January 1
through December 31.


 


1.21                        Related
Company.


 


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.


 


1.22                        Retirement
Plan.


 


The term “Retirement Plan” means the Assured Guaranty
Corp. Employee Retirement Plan.


 


1.23                        Separation
from Service.


 


A separation from service with an Employer within the
meaning of Code Section 409A(a)(2)(A)(i) and regulations thereunder.


 


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1.24                        Specified
Employee.


 


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.


 


1.25                        Years of
Service.


 


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.


 


Article 2 - Participation


 


2.1                               Commencement
of Participation.


 


Each Eligible Employee shall become a Participant at
the earlier of the date on which his or her Deferral Election first becomes
effective or the date on which an Employer Core Retirement Contribution or
Employer Discretionary Contribution is first credited to his or her Account.


 


2.2                               Loss
of Eligible Employee Status.


 


A Participant who is no longer an Eligible Employee
shall not be permitted to submit a Deferral Election and all Deferrals for such
Participant shall cease immediately when such Participant is no longer an
Eligible Employee.  Amounts credited to
the Account of a Participant who is no longer an Eligible Employee shall
continue to be held pursuant to the terms of the Plan and shall be distributed
as provided in Article 6.


 


Article 3 - Contributions


 


3.1                               Deferral
Elections – General.


 


A Participant may make a Deferral Election for a Plan
Year providing that, if the Participant’s before-tax elective deferral
contributions to the Retirement Plan are limited by the provisions of section
401(a)(17), 401(k)(3), 402(g) or 415 of the Code, as applicable, then his
Compensation for that period of the Plan Year after his or her before-tax
elective deferral contributions to the Retirement Plan are so limited will
continue to be reduced by, and the Participant’s Account under the Plan
credited with, an amount equal to the amount of before-tax elective deferral
contributions that would have been made under the Retirement Plan had the
provisions of sections 401(a)(17), 401(k)(3), 402(g) or 415 of the Code,
as applicable, not applied to him; provided, however, that such continuing
before-tax elective deferral contributions to this Plan shall be made pursuant
to the Deferral 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), as described in Section 3.2, and
such Deferral Election shall indicate the percentage of Compensation to be
contributed to this Plan after before-tax elective deferral contributions to
the Retirement Plan have been limited under sections 401(a)(17), 401(k)(3), 402(g) or
415 of the Code.  The Participant’s
Deferral Election with respect to the Plan is irrevocable for that Plan Year in
accordance with Section 3.2 hereto; 


 


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provided, however, that a
cessation of Deferrals shall be allowed if required by the terms of the
Retirement Plan (or by any other tax-qualified retirement maintained by an
Employer which includes a cash or deferred feature under Code section 401(k) plan)
in order for the Participant to obtain a hardship withdrawal from the
Retirement Plan or such other tax-qualified 401(k) plan, or if required
under Section 6.4 (Unforeseeable Emergency) of this Plan.  Deferrals under the Plan shall not be made
available to such Participant, except as provided in Article 6, and shall
reduce such Participant’s Compensation from the Employer in accordance with the
provisions of the applicable Deferral Election.


 


3.2                             Time
of Election.


 


A Deferral Election shall be void if
it is not made in a timely manner as follows:


 


(a)                                  A Deferral Election with respect to any Compensation
must be submitted to the Administrator before the beginning of the calendar
year during which the amount to be deferred will be earned.  As of December 31 immediately preceding
the first day of each calendar year, said Deferral Election is irrevocable for
the calendar year.


 


(b)                                 Notwithstanding the foregoing, in a year in which an
Employee first becomes an Eligible Employee, and provided that such Employee is
not eligible to participate in any other account balance arrangement maintained
by the Company or a Related Company which is subject to Code Section 409A,
such Deferral Election shall be filed within thirty (30) days after the date on
which an Employee first becomes an Eligible Employee, with respect to
Compensation to be earned during the remainder of the calendar year after such
election is made.


 


3.3                             Distribution
Elections.


 


To the extent provided in Section 6.3,
a Participant may elect the time and form of the distribution.


 


3.4                             Additional Requirements.


 


The Deferral Election, subject to
the limitations set forth in Sections 3.1 and 3.2 hereof, shall comply with the
following additional requirements:


 


(a)                                  Deferrals may be made in whole percentages or stated
dollar amounts with such limitations as determined by the Administrator.


 


(b)                                 The maximum amount that a Participant may elect
pursuant to a Deferral Election is six percent (6%) of the Participant’s
Compensation that is payable after the Participant’s before-tax elective
deferral contributions to the Retirement Plan have reached the limits under
that plan, as described in Section 3.1.


 


(c)                                  Notwithstanding
the provisions of section 3.1, a Participant’s Deferral Election under the Plan
shall be effective and an amount shall be credited to the Participant’s Account
in accordance with Section 3.1 (and Matching Contributions shall be credited
to the Participant’s Account in accordance with section 3.5) for a Plan Year
only if the Participant’s before-tax elective deferral contributions to the
Retirement Plan have reached the maximum 


 


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amount permitted under
Code Section 402(g) or the maximum elective contributions permitted
under the Plan, in accordance with Treas. Reg. section 1.401(k)(1)(e)(6)(iii);
and the Administrator shall establish such other administrative procedures as
are necessary to comply with such regulations.


 


3.5                             Matching
Contribution.


 


Subject to the requirements of Section 3.1, for
any Plan Year, a Participant’s 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 the
Participant’s before-tax elective deferral 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 actually made to the Retirement Plan on behalf
of the Participant; provided, however, that in no event shall the Matching
Contribution amount credited to a Participant’s Account under this Plan exceed
100% of the first six percent (6%) of the Participant’s aggregate Deferral of
Compensation to this Plan.


 


3.6                             Employer
Core Retirement Contribution.


 


For any Plan Year, a Participant’s Account shall be
credited with an amount equal to the difference, if any, between (a) the
Employer core contribution (referred to in the Retirement Plan as a
discretionary profit sharing 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 Code Sections 401(a)(17) or 415 and (b) the amount of the Employer core
contributions actually made to the Retirement Plan on behalf of the
Participant. The maximum amount of the Employer core contribution shall be in
an amount equal to six percent (6%) of Participant’s Compensation in excess of
the compensation limits under Code Section 401(a)(17).


 


3.7                             Employer
Discretionary Contributions.


 


For any Plan Year, a Participant’s Account may be
credited with an additional amount, as determined by the Employer in its sole
discretion, which amount, if any, shall be allocated to the accounts of that
group of Participants designated by the Employer it its sole discretion.  Such discretionary 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.


 


3.8                             Crediting
of Contributions.


 


(a)                                  Deferrals shall be credited to a Participant’s
Account pursuant to Section 3.1 at the same time that before-tax
elective deferral contributions would otherwise have been credited to his
accounts under the Retirement Plan.


 


(b)                                 Matching Contributions shall be credited to a
Participant’s Account pursuant to Section 3.5 at the same time that
matching contributions would otherwise have been credited to his accounts under
the Retirement Plan.


 


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(c)                                  Employer Core Retirement Contributions shall be
credited to a Participant’s Account pursuant to Section 3.6 at the
same time that Employer Core Contributions would otherwise have been credited
to his accounts under the Retirement Plan.


 


(d)                                 Employer Discretionary Contributions, if any, shall
be credited to a Participant’s Account pursuant to the Section 3.7
at soon as practicable following the Employer’s determination to credit such
contribution to Participant Accounts.


 


Article 4 - Vesting


 


4.1                             Vesting
of Deferrals.


 


A Participant shall be one hundred percent (100%)
vested in that portion his or her Account attributable to Deferrals.


 


4.2                             Vesting
of Matching Contributions.


 


Except as otherwise provided herein, a Participant
shall have a vested right to the portion of his or her Account attributable to
Matching Contribution(s) upon the earlier of the Participant’s attainment
of sixty-five (65) years of age or the Participant’s completion of one (1) Year
of Service.


 


4.3                             Vesting
of Employer Core Retirement Contributions.


 


Except as otherwise provided herein, a Participant
shall have a vested right to the portion of his or her Account attributable to
Employer Core Retirement Contributions upon the earlier of the Participant’s
attainment of sixty-five (65) years of age or the Participant’s completion of
one (1) Year of Service.


 


4.4                             Vesting
of Employer Discretionary Contributions.


 


A Participant shall have a vested right to the portion
of his or her Account attributable to Employer Discretionary Contributions upon
the earlier of the Participant’s attainment of sixty-five (65) years of age or
the Participant’s completion of one (1) Year of Service.


 


4.5                             Vesting
in Event of Death.


 


A Participant who incurs
a Separation from Service due to death shall be fully vested in the amounts
credited to his or her Account as of the date of death.


 


4.6                             Forfeiture
of Accounts.


 


Any amounts credited to a Participant’s Account that
are not vested at the time of his or her Separation from Service shall be
forfeited.


 


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Article 5 - Accounts


 


5.1                             Accounts.


 


The Administrator shall establish and maintain a
bookkeeping “Account” in the name of each Participant.  Each Participant’s Account shall be credited
with Deferrals, Matching Contributions, Employer Core Retirement Contribution,
and Employer Discretionary Contributions, if any, allocable thereto, and the
Participant’s allocable share of any earnings or losses credited to the
Participant’s Account in accordance with Section 5.2, and the
Administrator may establish bookkeeping subaccounts as it deems desirable to
reflect such Deferrals, Matching Contributions, Employer Core Retirement
Contribution, and Employer Discretionary Contributions, and earnings and losses
allocable thereto.  A Participant’s
Account shall also be credited with amounts (and in the Administrator’s
discretion, a subaccount established) reflecting amounts, if any credited to
the Participant under the Plan as in effect immediately prior to the amendment
and restatement of the Plan on the Effective Date; and on and after the
Effective Date, such amounts shall be subject to the terms of the Plan as
amended and restated (and to the extent required to comply with Code Section 409A,
any provision of the Plan as amended and restated shall be effective and apply to
such amounts prior to the Effective Date). 
Each Participant’s Account shall be reduced by any distributions made
plus any federal and state tax withholding, and any social security withholding
tax as may be required by law. 
Distributions from an Account to a Specified Employee, as defined in Section 1.24
shall be subject to the requirements of Section 6.1(c).


 


5.2                             Investments,
Gains and Losses.


 


(a)                                  A
Participant may direct that his or her Account established pursuant to Section 5.1
may be credited with earnings and losses as if they were invested in one or
more Investment Funds as made available by the Company in one percent (1%)
increments of the balance in an Account. 
The Company may from time to time change
the Investment Indexes for purposes of this Plan


 


(b)                                 The
Administrator shall adjust the amounts credited to each Participant’s Account
to reflect Deferrals, Matching Contributions, Employer Core Retirement
Contributions, Employer Discretionary Contributions, investment experience,
distributions and any other appropriate adjustments.  Such adjustments shall be made as frequently
as is administratively feasible (and to the extent permitted under Code section
409A).


 


(c)                                  A
Participant may change his or her selection of Investment Funds no more than six
(6) times each Plan Year with respect to
his or her Account by filing a new election in accordance with procedures
established by the Administrator. 
An election shall be effective as soon as administratively feasible
following the date of the change as indicated in writing by the Participant.


 


(d)                                 Notwithstanding the Participant’s ability to
designate the Investment Index in which his or her Account shall be deemed
invested, neither the Company, any Employer, nor the Administrator shall have
no obligation to invest any funds in accordance with the Participant’s
election.  Participants’ Account shall
merely be bookkeeping entries on the 


 


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applicable
Employer’s books, and no Participant shall obtain any property right or
interest in any Investment Index or Investment Fund.


 


Article 6 - Distributions


 


6.1                             Commencement
of Distribution.


 


Payment of the Participant’s Account balances shall be
made (or, if payment is made in installments, shall commence) within 60 days of
the Participant’s Separation from Service, subject to the following:


 


(a)                                  If
the Participant becomes Disabled prior to his Separation from Service  (regardless of whether the Participant
remains employed for a period after becoming Disabled), the Participant’s
Account balances will be paid in a lump sum within 60 days of becoming
Disabled, without regard to any election made by the Participant to receive
installments.  A Participant will be
considered to be “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 Separation from Service is his date of death, the Participant’s
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 Separation from
Service, and payment of benefits under the Plan is by reason of the Participant’s
Separation from Service, payments of benefits under the Plan may not be paid
before the date that is six months after the Participant’s Separation from
Service 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 Separation from Service.


 


6.2                             Lump
Sum Distribution.


 


Except to the extent provided in Section 6.3, a
Participant’s Account balances will be paid in a lump sum in an amount equal to
the Participant’s Account balances determined as of the Valuation Date next
prior to the Benefit Commencement Date.


 


6.3                             Installments.


 


A Participant may elect to have his 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 Separation from Service, (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 Participant’s Account balances is
equal to or greater than $50,000 as of the Valuation Date coincident with or
immediately prior to the Participant’s Separation from Service.


 


(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 


 


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30th day following the date on which the
Participant first becomes eligible to participate in the Plan in accordance
with Section 2.1.


 


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


 


(d)                                 The
amount of each installment paid under this Section 6.3 will equal the
result of dividing the Participant’s 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 Separation from Service
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 Separation from Service 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).


 


6.4                             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 Section 6.4, the
Participant’s deferrals shall cease and no further deferrals shall be made for
such Participant for the remainder of the Plan Year.


 


6.5                             Adjustments
Prior to Commencement Date and During Installments.


 


Prior to payment of a Participant’s Account balances
in a lump sum, and during the period installments are being paid under Section 6.3,
the remaining balances in the Participant’s 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.


 


6.6                             Separation
from Service for Cause.


 


Notwithstanding anything to the
contrary contained herein, in the event the Participant has an involuntary
Separation from Service for Cause, the Participant shall only receive the
return of his or her Deferrals including the Participant’s allocable
share of any earnings or losses credited on
those Deferrals pursuant to Section 5.2, above, and subject to Section 6.1(c) (distributions
to Specified Employees) above.  Upon a
Participant’s Separation from Service for Cause, all amounts credited to
Participant’s Account amounts relating to Employer Matching Contribution(s),
Employer Core Retirement Contributions, and Employer Discretionary
Contribution(s), including the Participant’s allocable share of any
earnings or losses credited on the foregoing
pursuant to Section 5.2, hereinabove, shall be forfeited. For purposes of
this Plan, “Cause” shall mean (i) engaging in misconduct that may
be materially injurious to the Company, 


 


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an Employer, or a Related
Company, (ii) embezzlement or misappropriation of funds or property of the
Company, an Employer, or a Related Company, (iii) conviction of a felony
or the entrance of a plea of guilty or nolo contendere to a felony, (iv) conviction
of any crime involving fraud, dishonesty or breach of trust or the entrance of
a plea of guilty or nolo contendere to such a crime, (v) the violation of
any rules, policies, procedures or guidelines, including but not limited to the
business code of conduct guidelines, of the Company, an Employer, or a Related
Company, or (vi) failure or refusal by the Participant to devote full
business time and attention to the performance of his or her duties and
responsibilities if such breach has not been cured within five (5) days
after notice is given to the Participant.


 


Article 7 - Beneficiaries


 


7.1                               Beneficiaries.


 


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 determined in accordance with this Section 7.  Each Participant may from time to time
designate one or more persons (who may be any one or more members of such
person’s family or other persons, administrators, trusts, foundations or other
entities) as his or her beneficiary under the Plan.  Such designation shall be made in a form
prescribed by the Administrator.  Each
Participant may at any time and from time to time, change any previous
beneficiary designation, without notice to or consent of any previously
designated beneficiary, by amending his or her previous designation in a form
prescribed by the Administrator.  If the
beneficiary does not survive the Participant (or is otherwise unavailable to
receive payment) or if no beneficiary is validly designated, then the amounts
payable under this Plan shall be paid to the Participant’s estate.  If more than one person is the beneficiary of
a deceased Participant, each such person shall receive a pro rata share of any
death benefit payable unless otherwise designated in the applicable form.  If a beneficiary who is receiving benefits
dies, all benefits that were payable to such beneficiary shall then be payable
to the estate of that beneficiary.


 


7.2                               Lost
Beneficiary.


 


All Participants and beneficiaries shall have the
obligation to keep the Administrator informed of their current address until
such time as all benefits due have been paid. 
If a Participant or beneficiary cannot be located by the Administrator
exercising due diligence, then, in its sole discretion, the Administrator may
presume that the Participant or beneficiary is deceased for purposes of the
Plan and all unpaid amounts (net of due diligence expenses) owed to the
Participant or beneficiary shall be paid accordingly or, if a beneficiary
cannot be so located, then such amounts may be forfeited.  Any such presumption of death shall be final,
conclusive and binding on all parties.


 


Article 8 - Funding


 


8.1                               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 


 


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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, as determined by the
Company.  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.. It is the intention of the
parties hereto that this arrangement shall be unfunded for tax purposes and for
purposes of ERISA.


 


8.2                               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.


 


8.3                               Withholding
of Employee Contributions.


 


The Administrator is authorized to make any and all
necessary arrangements with the Employer in order to withhold the Participant’s
Deferrals under Section 3.1 hereof from his or her Compensation.  The Administrator shall determine the amount
and timing of such withholding.


 


Article 9 - Claims Administration


 


9.1                               General.


 


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


 


9.2                               Claims
Procedure.


 


Upon receipt of any written claim for benefits, the
Administrator 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
Administrator determines that the claim should be denied in whole or in part,
the Administrator shall, in writing, notify such claimant within ninety (90)
days of receipt of the claim that the claim has been denied.  The Administrator 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 Administrator 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 


 


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which the Plan expects to
render a decision.  If the claim is
denied to any extent by the Administrator, the Administrator 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 Article.


 


9.3                             Right
of Appeal.


 


A claimant who has a claim denied wholly or partially
under Section 9.2 may appeal to the Administrator for reconsideration of
that claim.  A request for
reconsideration under this Section must be filed by written notice within
sixty (60) days after receipt by the claimant of the notice of denial under Section 9.2.


 


9.4                             Review
of Appeal.


 


Upon receipt of an appeal the Administrator shall
promptly take action to give due consideration to the appeal.  Such consideration may include a hearing of
the parties involved, if the Administrator 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 Administrator 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 Administrator’s decision shall be issued
within sixty (60) days after the appeal is filed, except that the Administrator
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 Administrator
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                             Designation.


 


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


 


Article 10 - General Provisions


 


10.1                      Administrator.


 


(a)                                  The
Administrator is expressly empowered to limit the amount of Compensation that
may be deferred; to interpret the Plan and to determine all questions arising
in 


 


13

















 


the administration,
interpretation and application of the Plan; to employ actuaries, accountants,
counsel, and other persons it deems necessary in connection with the
administration of the Plan; to request any information from any Employer it
deems necessary to determine whether the Employer would be considered insolvent
or subject to a proceeding in bankruptcy; and to take all other necessary and
proper actions to fulfill its duties as Administrator.


 


(b)                                 The
Administrator, including any person or committee member to whom the Board has
delegated the authority to act on behalf of the Administrator, shall not be
liable for any actions by it, unless due to its own negligence, willful
misconduct or lack of good faith.


 


(c)                                  The
Administrator, including any person or committee member to whom the Board has
delegated the authority to act on behalf of the Administrator, shall be
indemnified and saved harmless by the Employers from and against all personal
liability to which it may be subject by reason of any act done or omitted to be
done in its official capacity as Administrator in good faith in the administration
of the Plan, including all expenses reasonably incurred in its defense in the
event the Employers fail to provide such defense upon the request of the
Administrator.  Any person or committee
member acting on behalf of the Administrator is relieved of all personal
responsibility in connection with its duties hereunder to the fullest extent
permitted by law, short of breach of duty to the beneficiaries.


 


10.2                      No
Assignment.


 


Benefits or payments under this Plan shall not 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, whether voluntary or involuntary, and any
attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber,
attach or garnish the same shall not be valid, nor shall any such benefit or
payment be in any way liable for or subject to the debts, contracts,
liabilities, engagement or torts of any Participant or beneficiary, or any
other person entitled to such benefit or payment pursuant to the terms of this
Plan, except to such extent as may be required by law.  If any Participant or beneficiary or any
other person entitled to a benefit or payment pursuant to the terms of this
Plan becomes bankrupt or attempts to anticipate, alienate, sell, transfer,
assign, pledge, encumber, attach or garnish any benefit or payment under this
Plan, in whole or in part, or if any attempt is made to subject any such
benefit or payment, in whole or in part, to the debts, contracts, liabilities,
engagements or torts of the Participant or beneficiary or any other person
entitled to any such benefit or payment pursuant to the terms of this Plan,
then such benefit or payment, in the discretion of the Administrator, shall
cease and terminate with respect to such Participant or beneficiary, or any
other such person.


 


10.3                      No
Employment Rights.


 


Participation in this Plan shall not be construed to
confer upon any Participant the legal right to be retained in the employ of the
Employer, or give a Participant or beneficiary, or any other person, any right
to any payment whatsoever, except to the extent of the benefits provided for
hereunder.  Each Participant shall remain
subject to discharge to the same extent as if this Plan had never been adopted.


 


14

















 


10.4                        Incompetence.


 


If the Administrator determines that any person to
whom a benefit is payable under this Plan is incompetent by reason of physical
or mental disability, the Administrator shall have the power to cause the
payments becoming due to such person to be made to another for his or her
benefit without responsibility of the Administrator or the Employer to see to
the application of such payments.  Any
payment made pursuant to such power shall, as to such payment, operate as a
complete discharge of the Company, the Employers, and the Administrator.


 


10.5                        Identity.


 


If, at any time, any doubt exists as to the identity
of any person entitled to any payment hereunder or the amount or time of such
payment, the Administrator shall be entitled to hold such sum until such
identity or amount or time is determined or until an order of a court of
competent jurisdiction is obtained.  The
Administrator shall also be entitled to pay such sum into court in accordance
with the appropriate rules of law. 
Any expenses incurred by the Company, Employers, and Administrator
incident to such proceeding or litigation shall be charged against the Account
of the affected Participant.


 


10.6                        Other
Benefits.


 


The benefits of each Participant or beneficiary
hereunder shall be in addition to any benefits paid or payable to or on account
of the Participant or beneficiary under any other pension, disability, annuity
or retirement plan or policy whatsoever.


 


10.7                        Right of
Setoff.


 


The Employer may, to the extent permitted by
applicable law, deduct from and setoff against any amounts payable to a
Participant from this Plan such amounts as may be owed by a Participant to the
Employer, although the Participant shall remain liable for any part of the
Participant’s payment obligation not satisfied through such deduction and
setoff; provided, however, that this setoff may occur only at the date on which
the amount would otherwise be distributed to the Participant as required by
Code Section 409A.  By electing to
participate in the Plan and deferring compensation hereunder, the Participant
agrees to any deduction or setoff under this Section 10.7.


 


10.8                        Expenses.


 


All expenses incurred in the administration of the
Plan, whether incurred by the Employers or the Plan, shall be paid by the
Employers.


 


10.9                        Insolvency.


 


If an Employer establishes a trust to pay benefits
hereunder, as described in Section 8.1, should the Employer be considered
insolvent (as defined by such trust), the Employer, through its Board and chief
executive officer, shall give immediate written notice of such to the
Administrator of the Plan and the trustee of such trust.  Upon receipt of such notice, the
Administrator or trustee shall cease to make any payments to Participants who
were Employees 


 


15

















 


of the Employer or their
beneficiaries and shall hold any and all assets attributable to the Employer
for the benefit of the general creditors of the Employer.


 


10.10                 Amendment,
Modification, Suspension or Termination.


 


The Company may, at any time, in its
sole discretion, amend, modify, suspend or terminate the Plan in whole or in
part, except that no such amendment, modification, suspension or termination
shall have any retroactive effect to reduce any amounts allocated to a
Participant’s Accounts.  In the event
that this Plan is terminated, to the extent required under Code Section 409A,
the distribution of the amounts credited to a Participant’s Accounts shall not
be accelerated but shall be paid at such time and in such manner as determined
under the terms of the Plan immediately prior to termination as if the Plan had
not been terminated; and notwithstanding anything to the contrary contained herein,
the Company, in its sole discretion, may distribute all Participants’ Accounts
no earlier than twelve (12) calendar months from the date of the Plan
termination and no later than twenty-four (24) calendar months from the date of
the Plan termination, provided that the Company also satisfies any additional
requirements as may be imposed by Code Section 409A and regulations
thereunder.


 


10.11                 Termination Due
to Change-in-Control.


 


The Employer may decide in its discretion to terminate
the Plan in the event of a change-in-control, within the meaning of Code Section 409A
and regulations thereunder, and distribute all Participants Accounts within
twelve (12) months of the effective date of the change-in-control as allowed by
applicable law.  Any corporation or other
business organization that is a successor to the Employer by reason of a
change-in-control shall have the right to become a party to the Plan by
adopting the same by resolution of the entity’s board of directors or other
appropriate governing body.  If within
thirty (30) days from the effective date of the change-in-control such new
entity does not become a party hereto, as above provided, the full amount of
the Participant’s Account shall become immediately distributable to the
Participant.


 


10.12                 Construction.


 


All questions of interpretation, construction or
application arising under or concerning the terms of this Plan shall be decided
by the Administrator, in its sole and final discretion, whose decision shall be
final, binding and conclusive upon all persons.


 


10.13                 Governing Law.


 


This Plan shall be governed by, construed and
administered in accordance with the applicable provisions of ERISA, Code Section 409A,
and any other applicable federal law, provided, however, that to the extent not
preempted by federal law this Plan shall be governed by, construed and
administered under the laws of the New York, other than its laws respecting
choice of law.


 


10.14                 Severability.


 


If any provision of this Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any other
provision of this Plan and this Plan shall be construed 


 


16

















 


and enforced as if such
provision had not been included therein. 
If the inclusion of any Employee (or Employees) as a Participant under
this Plan would cause the Plan to fail to comply with the requirements of
sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, or Code Section 409A,
then the Plan shall be severed with respect to such Employee or Employees, who
shall be considered to be participating in a separate arrangement.


 


10.15                 Headings.


 


The Article headings contained herein are
inserted only as a matter of convenience and for reference and in no way
define, limit, enlarge or describe the scope or intent of this Plan nor in any
way shall they affect this Plan or the construction of any provision thereof.


 


10.16                 Terms.


 


Capitalized terms shall have meanings as defined
herein.  Singular nouns shall be read as
plural, masculine pronouns shall be read as feminine, and vice versa, as
appropriate.


 


10.17                 409A Compliance.


 


It is intended that this Plan comply with Code Section 409A
in accordance with Internal Revenue Service Notice 2005-1 (and any subsequent
IRS notices or guidance), and this Plan will be interpreted, administered and
operated in good faith accordingly.  In
the event that any provision of this Plan is inconsistent with Code Section 409A
or such guidance, then the applicable provisions of Code Section 409A
shall supersede such provision.  Nothing
herein shall be construed as an entitlement to or guarantee of any particular
tax treatment to a Participant.


 


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