Document:

Exhibit 10.3

February 28,
2006

2006 Performance-Vesting
Restricted (“PVR”) Share Award

«Name»

Dear Plan Participant:

This letter confirms the award made to you by the
Compensation Committee of the Board of Directors under the Performance-Vesting
Restricted Share Award program. The PVR share program is designed to compensate
key executives based on the Company’s achievement of corporate performance
goals, pay for performance and promote the retention of key employees. The PVR
share program emphasizes long-term compensation value and encourages stock
retention among the Company’s key executives.

Participants in the program can earn shares of West
stock based on the Company’s return-on-invested capital (ROIC) and revenue
growth over the next three-year period (i.e., 2006-2008) as compared to
ROIC and revenue growth targets established by the Compensation Committee.

	
  The ROIC Target is:

  	
   

  	
  10%

  
	
  The Revenue Growth
  Target is:

  	
   

  	
  10%

  
	
  Your Target Award
  amount is

  	
   

  	
  «PVRS» shares

  

 

If the Company achieves 100% of the ROIC and Revenue
Growth targets, you will receive 100% of your Target Award in shares of West
common stock. A higher performance versus the targets could result in a greater
number of shares being awarded, and fewer shares will be awarded if Company
performance falls short of the targets. Please refer to the attached Long Term
Incentive Plan with 2006 Revisions Plan Summary to determine how your award
will vest. Also attached is additional information about the terms and
conditions of your PVR share award.

This Award shall be governed by all of the terms and
conditions contained in this award letter and the West Pharmaceutical Services, Inc.
2004 Stock-Based Compensation Plan (the “Plan”). In the event of a conflict
between this award letter and the Plan, the provisions of the Plan shall
control for any and all purposes.

I am pleased that you are a participant in this
long-term incentive compensation program and trust that your participation will
be beneficial to both you and the Company.

Please review the attached documentation carefully.

	
  

  	
  Sincerely,

  
	
   

  	
  /s/ Richard D. Luzzi

  
	
   

  	
  Richard D. Luzzi

  
	
   

  	
  Vice President Human Resources

  

 

RDL/rmm

Attachments

 

Terms
and Conditions of the Performance-Vesting Share Awards

Performance
Measures and Performance Period

The primary feature of the Performance-Vesting
Restricted (PVR) Share Award program is that the participant receives shares of
West common stock contingent upon corporate performance over a designated
period of time.  

The measures of corporate performance are Return on
Invested Capital (“ROIC”) and Revenue Growth.

a.                 ROIC
means the average of the Company’s net operating profit (without regard to
taxes) divided by the average outstanding equity plus debt.

b.                Revenue
Growth means the compound annual growth rate in net sales for the Company.

The performance period of this grant is three years.
Details regarding the vesting of your award, including the applicable
performance formula targets, for the performance period are shown in the
attached Long Term Incentive Plan with 2006 Revisions Plan Summary.

After the end of the performance period, West's
performance will be calculated on both measures.  The results are then tabulated to determine
the actual number of shares, if any, to be awarded.

Target Award and
Dividends

Your Target Award is an amount of PVR shares that
would be paid to you if the Company hits 100% of the ROIC and Revenue Growth
performance targets.  Additional PVR
shares will be awarded if actual performance exceeds the performance targets,
and fewer PVR shares will be awarded if actual performance falls short of the
performance targets.  No PVR shares will
be awarded if actual performance falls below the minimum acceptable level.

During the performance period, your account will be
credited with additional PVR shares as if the Target Award was achieved and
reinvested in dividends on West common stock. 
At the end of the performance period, you will receive additional shares
of common stock equal to the amount of PVR shares purchased through this
dividend-reinvestment feature.

Any shares awarded will be transferred to you in
approximately the first quarter of the year following the last day of a
performance period.

Delivery of the shares may be deferred in accordance
with the deferral feature of the Company’s Non-Qualified Deferred Compensation
Plan for participants in certain countries as determined by the Committee.  Details of the deferral opportunity will be
provided to participants in that plan prior to the end of each performance
period.

 

Tax
Consequences

Any shares paid under this program will be considered
taxable income and subject to tax pursuant to the laws of the country in which
you work/live.  For U.S. tax purposes,
withholding taxes are due upon delivery of the shares and will be withheld from
any payment.  Additional information
about the U.S. tax consequences of your award are contained in the latest plan
information statement.

Early Vesting

A Change in Control of the Company (as defined under
the West 2004 Stock-Based Compensation Plan) prior to the end of a designated
performance period will result in an immediate vesting of the full amount of
your Target Award.  These shares will be
distributed to you as soon as practical after the event.

Forfeiture
Provisions

All unvested PVR shares will be forfeited under the
following circumstances:

1.                 Your
employment terminates for any reason prior to the end of the performance
period; or

2.                 If
at any time during your employment or within 3 months following termination of
your employment, you directly or indirectly engage in activity harmful to, or
not in the best interest of, the Company. 
Such activity includes, without limitation:

·              conduct
related to your employment for which either criminal or civil penalties against
you may be sought;

·                           acquisition
of a direct or indirect interest or an option to acquire such an interest in
any person or entity engaged in competition with the Company’s business (other
than an interest of not more than 5 percent of the outstanding stock of any
publicly traded company); 

·                           accepting
employment with or serving as a director, officer, employee or consultant of,
or furnishing information to, or otherwise facilitating the efforts of, any
person or entity engaged in competition with the Company’s business; 

·                           soliciting,
employing, interfering with, or attempting to entice away from the Company any
employee who has been employed by the Company in an executive or supervisory
capacity within one year prior to such solicitation, employment, interference
or enticement; 

·                           violation
of Company policies, including the Company’s insider-trading policy; or

·                           using
for your or others, or disclosing to others, any confidential or proprietary
information of the Company in contravention of any Company policy or agreement.

 

Long
Term Incentive Plan 

with 2006 Revisions

Plan Summary

Background and
Basic Plan Design

The Long Term Incentive Plan is designed to implement
a balanced approach to the achievement of multiple long term strategic
objectives.  Awards in the long term plan
are comprised of two forms of equity, Stock Options which vest over time, and
Performance Restricted Shares which vest upon achievement of performance goals.
Targeted awards will consist of equal value amounts of Stock Options and
Performance Restricted Shares.  This 50%
- 50% mix utilizes Performance Restricted Shares to drive focus on two key long
term performance objectives, Revenue Growth and Return on Invested Capital,
while Stock Options provide the opportunity to share in the overall long term
success of West.

Stock Options 

50% of the targeted long term award opportunity will
be in Stock Options. The number of options will be determined by dividing the
expected value of one option (as determined by the compensation consultant and
approved by the Compensation Committee) into 50% of the participant’s long term
award opportunity. 

Stock Options. 
Stock options will have the following terms:

·     Stock options are granted at fair market
value on the date of grant.

·     Vesting will occur over the first 4 years
of the grant at the rate of 25% per year.

·     Options will have a 10 year exercise
period. 

·     Options are not subject to the performance
criteria established for Performance Restricted Shares (described below).

Performance
Restricted Shares (PRSs) 

50% of the long term award opportunity will be in
Performance Restricted Shares. The number of shares will be determined by
dividing the value per share of West stock (as determined by the compensation
consultant and approved by the Compensation Committee) into 50% of the
participant’s long term award opportunity. 
The PRSs will vest upon the achievement of two performance goals –
Revenue Growth and Return on Invested Capital - discussed more fully below. 

Performance
Restricted Shares

·              Performance
restricted shares are a grant of Company stock that is subject to the
performance vesting provisions of the Long Term Incentive Plan.

·              Vesting
of the shares as well as the number of shares that vest is contingent upon meeting
the performance criteria established for each of the key long term
measures:  Compound Annual Revenue Growth
and Average Return on Invested Capital.

·              Dividends
accrue on the restricted shares and will be paid to the participant based on
the percentage of shares that vest. 
Dividends may be settled in cash or in stock at the Compensation
Committee’s discretion.

·              The
actual value of the shares may either rise or fall during the performance
period; however, the number of shares subject to vesting will not change.

 

To minimize short-term volatility, the basic design of
the performance plan is to measure performance over a three year Performance
Period.  At the end of the three years,
performance against the two goals is measured and the vesting of the Performance
Restricted Shares awarded at the beginning of that Performance Period is
determined. Each year a new three year Performance Period is begun and
Performance Restricted Shares are awarded. 
This means there are three overlapping Performance Periods at any given
time – the one started three years ago, the one started two years ago, and the
one started in the current year. Vesting of the Performance Restricted Shares
granted at the beginning of a three year Performance Period occurs at the end
of that three year period when the performance is measured.  Obviously, performance in any given year
contributes to the three year Performance Periods which contain that year.  This three year rolling mechanism is designed
to smooth out short term fluctuation and therefore reward long term
performance. 

Note that there will be a “phase in” period during the
first two years.  The first Performance
Period (PP) will cover only 2004. The measurements will be based on 2004 only
and the vesting of one-third of the shares awarded at the beginning of 2004
will be determined from that at the end of 2004. The second PP will consist of
2004 and 2005.  The vesting of one-third
the shares awarded at the beginning of 2004 will be based on the measurements
of 2004 & 2005 and will occur at the end of 2005. The third PP will include
2004, 2005, and 2006.  The vesting of the
final one-third of the shares awarded at the beginning of 2004 will be
determined at the end of 2006. The fourth performance period will include 2005,
2006 and 2007. The vesting of the shares awarded in 2005 will occur at the end
of 2007. The fifth performance period will include 2006, 2007 and 2008. The
vesting of shares awarded in 2006 will occur at the end of 2008.

Plan Performance
Targets, Definitions and Weights

The Plan performance targets are established with the
consent of the Compensation Committee of the Board. The Committee retains the authority to change or revise the targets as
it deems appropriate. In the event of acquisitions or divestitures the Committee
will on a case by case basis determine the necessity to change or revise the
performance targets.

1.                  Revenue
Growth. Weight 50%.

1.                 Definition:
The three year Compound Annual Growth Rate in Net Sales.

2.                 Performance
Target for Performance Periods beginning in 2004, which include Performance
Periods I, II, and III: 5% Compound Annual Growth Rate.

3.                 Performance
Target for Performance Period IV beginning in 2005: 9.0% Compound Annual Growth
Rate (revised).

4.                 Performance
Target for Performance Period V beginning in 2006:10.0% Compound Annual Growth
Rate

5.                 Criteria
for Performance Periods

i.                     Performance
Period I: 2004. Measured as the 2004 growth rate in net sales over 2003.

ii.                  Performance
Period II: 2004 and 2005. The average of the 2004 and 2005 growth rates in net
sales.

iii.               Performance
Period III: 2004, 2005 and 2006.  The
Compound Annual Growth Rate in Net Sales over the 2004, 2005 and 2006
performance period.

iv.              Performance
Period IV: 2005, 2006 and 2007. The Compound Annual Growth Rate in Net Sales
over 2005, 2006 and 2007 performance period.

v.                 Performance Period V: 2006, 2007 and 2008. The Compound Annual Growth
Rate in Net Sales over 2006, 2007 and 2008.

 

2.                 Average
Return on Invested Capital.  Weight 50%.

1.                  Definition:
Net Operating Profit after taxes divided by the average Equity plus Debt for
each year, averaged over the three (3) year performance period.

2.                  Performance
Target for Performance Periods beginning in 2004 and 2005:  8.5% Average Return on Invested Capital.

3.                  Performance
Target for Performance Period IV beginning in 2005 :  9.5% Average Return on Capital (revised)

4.                  Performance
Target for Performance Period V beginning in 2006: 10% Compound Annual Growth
Rate

5.                  Criteria
for Initial Performance Periods

i.                     Performance
Period I: 2004. The Return on Capital for 2004

ii.                  Performance
Period II: 2004 and 2005. The average of the Returns on Capital for 2004 and
2005.

iii.               Performance
Period III: 2004, 2005 and 2006. The average of the Returns on Capital over the
2004, 2005 and 2006 Performance Period.

iv.              Performance
Period IV: 2005, 2006 and 2007. The average of the Returns on Capital over the
2005, 2006 and 2007 Performance Period.

v.                 Performance Period V: 2006, 2007 and 2008. The average of the Returns
on Capital over the 2006, 2007 and 2008 Performance Period

Performance Payout
Relationship

For 50% of the shares, targeted levels of performance
for Compound Annual Revenue Growth are established for each performance period.
A threshold of 70% of target has been established, below which no Performance
Restricted Shares will vest.  (Vesting
means that the ownership restrictions are lifted.)  At 70% of target, 50% of the Performance
Restricted Shares will vest.  At 100% of
target, 100% of the Performance Restricted Shares will vest.  At 150% of target and above, all Restricted
Shares will vest and an additional equal number of shares will be awarded
without restrictions at that time. 

For the remaining 50% of the shares, targeted levels
of performance for Average Return on Invested Capital are established for each
performance period. A threshold of 70% of target has been established, below
which no Performance Restricted Shares will vest.  (Vesting means that the ownership
restrictions are lifted.)  At 70% of
target, 50% of the Performance Restricted Shares will vest.  At 100% of target, 100% of the Performance
Restricted Shares will vest.  At 150% of
target and above, all Restricted Shares will vest and an additional equal
number of shares will be awarded without restrictions at that time.

Payout for performance between 70%-100% and 100%-150%
will be determined by linear interpolation between the appropriate points.

The plan is designed to measure performance over a
three year performance period. As the plan is implemented the first two years
will cover fewer years. To guard against unintended windfalls, payouts will be
capped at 100% for the first performance period ending in 2004, and 150% for
the second performance period ending in 2005.

Following are matrices reflecting the approved performance
targets and corresponding payout opportunities for Performance Periods III, IV
and V.

 

Long
Term Incentive Plan

Performance Payout Matrix

Performance Period III: 2004, 2005 and 2006

	
  

  	
   

  	
   

  	
   

  	
  Compound Annual Growth Rate Revenue

  	
   

  	
  Average Return on Invested Capital

  	
   

  
	
   

  	
  Performance Range

  	
   

  	
   

  	
  Performance

  	
   

  	
  Payout

  	
   

  	
  Performance

  	
   

  	
  Payout

  	
   

  
	
  Maximum:

  	
   

  	
  150

  	
  %

  	
  7.50

  	
  %

  	
  200

  	
  %

  	
  12.75

  	
  %

  	
  200

  	
  %

  
	
   

  	
   

  	
  125

  	
  %

  	
  6.25

  	
  %

  	
  150

  	
  %

  	
  10.63

  	
  %

  	
  150

  	
  %

  
	
   

  	
   

  	
  110

  	
  %

  	
  5.50

  	
  %

  	
  120

  	
  %

  	
  9.35

  	
  %

  	
  120

  	
  %

  
	
  Target:

  	
   

  	
  100

  	
  %

  	
  5.00

  	
  %

  	
  100

  	
  %

  	
  8.50

  	
  %

  	
  100

  	
  %

  
	
   

  	
   

  	
  85

  	
  %

  	
  4.25

  	
  %

  	
  75

  	
  %

  	
  7.23

  	
  %

  	
  75

  	
  %

  
	
  Threshold:

  	
   

  	
  70

  	
  %

  	
  3.50

  	
  %

  	
  50

  	
  %

  	
  5.95

  	
  %

  	
  50

  	
  %

  
																									

 

Performance Period IV: 2005, 2006 and 2007

	
  

  	
   

  	
   

  	
   

  	
  Compound Annual Growth Rate Revenue

  	
   

  	
  Average Return on Invested Capital

  
	
   

  	
  Performance Range

  	
   

  	
   

  	
  Performance

  	
   

  	
  Payout

  	
   

  	
  Performance

  	
   

  	
  Payout

  
	
  Maximum:

  	
   

  	
  150%

  	
   

  	
  13.50%

  	
   

  	
  200%

  	
   

  	
  14.25%

  	
   

  	
  200%

  
	
   

  	
   

  	
  125%

  	
   

  	
  11.25%

  	
   

  	
  150%

  	
   

  	
  11.88%

  	
   

  	
  150%

  
	
   

  	
   

  	
  110%

  	
   

  	
  9.90%

  	
   

  	
  120%

  	
   

  	
  10.45%

  	
   

  	
  120%

  
	
  Target:

  	
   

  	
  100%

  	
   

  	
  9.00%

  	
   

  	
  100%

  	
   

  	
  9.50%

  	
   

  	
  100%

  
	
   

  	
   

  	
  85%

  	
   

  	
  7.65%

  	
   

  	
  75%

  	
   

  	
  8.08%

  	
   

  	
  75%

  
	
  Threshold:

  	
   

  	
  70%

  	
   

  	
  6.30%

  	
   

  	
  50%

  	
   

  	
  6.65%

  	
   

  	
  50%

  
													

 

Performance Period V: 
2006, 2007 and 2008

	
  

  	
   

  	
   

  	
   

  	
  Compound Annual Growth Rate Revenue

  	
   

  	
  Average Return on Invested Capital

  
	
   

  	
  Performance Range

  	
   

  	
   

  	
  Performance

  	
   

  	
  Payout

  	
   

  	
  Performance

  	
   

  	
  Payout

  
	
  Maximum:

  	
   

  	
  150%

  	
   

  	
  15.0%

  	
   

  	
  200%

  	
   

  	
  15.0%

  	
   

  	
  200%

  
	
   

  	
   

  	
  125%

  	
   

  	
  12.5%

  	
   

  	
  150%

  	
   

  	
  12.5%

  	
   

  	
  150%

  
	
   

  	
   

  	
  110%

  	
   

  	
  11.0%

  	
   

  	
  120%

  	
   

  	
  11.0%

  	
   

  	
  120%

  
	
  Target:

  	
   

  	
  100%

  	
   

  	
  10.0%

  	
   

  	
  100%

  	
   

  	
  10.0%

  	
   

  	
  100%

  
	
   

  	
   

  	
  85%

  	
   

  	
  8.5%

  	
   

  	
  75%

  	
   

  	
  8.5%

  	
   

  	
  75%

  
	
  Threshold:

  	
   

  	
  70%

  	
   

  	
  6.30%

  	
   

  	
  50%

  	
   

  	
  7.0%

  	
   

  	
  50%

  
																	

 

Target Award
Values

Our outside compensation consultants periodically
conduct a comparative study of total compensation levels including long term
incentive award values for management positions in companies similar to West
Pharmaceutical Services. Using this market data, Target Long Term Award values
were set for each management position participating in the Long Term Incentive
Plan.

The Compensation Committee may change the percentage
or type of equity used to fund the long term awards at its discretion.

Plan
Administration

Plan administration is subject to the provisions of West Pharmaceutical Services, Inc. 2004 Stock-Based Compensation
Plan, as approved by the Shareholders on May 4, 2004.
Participation in the Long Term Incentive Plan is subject to the approval of the
Compensation Committee of the Board. The amount and type of awards under this
plan are at the discretion of management subject to Committee approval and are
not guaranteed under any circumstances.Exhibit 10.1

Five Year Cliff Vest
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;

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 Covered Shares of the Restricted
Stock Award shall begin on the Grant Date and end on the five (5) year
anniversary of the Grant Date (but only if the Date of Termination has not
occurred before the end of the Restricted Period).

The Restricted Period shall end prior to the date
specified above to the extent set forth below:

(a)                                  The
Restricted Period 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)                                 The
Restricted Period shall end upon a Change in Control, provided that such Change
in Control occurs on or before the Date of Termination.

 

 

(c)                                  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.

4. Transfer
and Forfeiture of Shares. If the Restricted Period ends on or before
the Participant’s Date of Termination, then at the end of such Restricted
Period, the Covered Shares shall be transferred to the Participant free of all
restrictions (except for restrictions described in paragraph 10). If the
Restricted Period  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 the Covered Shares. 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.

 2
 

 

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 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 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 the 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 

 3
 

 

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.

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, 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;
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) the rendering
of services for any organization or engaging directly or indirectly in any
business which is or becomes competitive with the Company or the Subsidiaries
(including, without limitation, AMBAC Financial Group Inc., CIFG Group,
Financial Guaranty Insurance Company, Financial Security Assurance Inc., MBIA, Inc.
and Radian Group Inc.), or which organization or business, or the rendering of
services to such organization or 

 4
 

 

business, is or becomes otherwise prejudicial to or in conflict with
the interests of the Company or the Subsidiaries; (ii) the disclosure to
anyone outside the Company or the Subsidiaries, or the use in other than the
Company’s or the Subsidiaries’ business, without prior written authorization
from the Company or the Subsidiaries, of any confidential information or
material, relating to the business of the Company or the Subsidiaries, acquired
by the Participant either during or after employment with the Company or the
Subsidiaries; (iii) a violation of any rules, policies, procedures or
guidelines of the Company or the Subsidiaries, including but not limited to the
Company’s Code of Conduct and other business conduct guidelines; (iv) any
attempt directly or indirectly to induce any employee of the Company to be
employed or perform services elsewhere or any attempt directly or indirectly to
solicit the trade or business of any current or prospective customer, supplier
or partner of the Company; (v) the Participant being convicted of, or
entering a guilty plea with respect to, a crime, whether or not connected with the
Company; or (vi) any other conduct or act determined to be injurious,
detrimental or prejudicial to any interest of the Company. Notwithstanding the
foregoing, activity occurring after the Date of Termination shall constitute
Detrimental Activity only if it is described in clause (i) (relating to
competition), (ii) (relating to confidentiality), or (iv) (relating
to solicitation) above.

(d)                                 Director.
The term “Director” means a member of the Assured Guaranty Ltd. 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 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 180 days.

(f)                                    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 with the consent of the Participant’s
employer after the Participant has completed five 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.

(g)                                 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:          James
Michener

Its:          General Counsel

	
  Participant:

  	
   

  	
   

  

 

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