Document:

Exhibit 10.4  

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.  

 Supplemental Executive Retirement Plan  

 As Amended and Restated  

 as of November 14, 2002  

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.  

 Supplemental Executive Retirement Plan  

 CONTENTS  

	 
	 	 
	 	Page

	

ARTICLE 1	
 	

Purposes of Plan	
 	

1
	

ARTICLE 2	
 	

Definitions	
 	

1
	

ARTICLE 3	
 	

Participation	
 	

3
	

ARTICLE 4	
 	

Restoration of Benefits	
 	

3
	

ARTICLE 5	
 	

Administration and General Provisions	
 	

7

i

 
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.  

 Supplemental Executive Retirement Plan  

ARTICLE 1. Purposes of Plan.  

	1.1
	Financial
Security Assurance Inc. adopted the Financial Security Assurance Inc. Supplemental Executive Retirement Plan (the "Plan"), effective January 1, 1989, in
order to restore the pension benefits of selected current and future key employees whose benefits under the Financial Security Assurance Inc. Money Purchase Plan are limited by reason of
certain limitations imposed by Section 401(a)(17), Section 415 and other provisions of the Internal Revenue Code of 1986, as amended (the "Code"). The Plan was previously amended and
restated in its entirety, and adopted by Financial Security Assurance Holdings Ltd. effective as of January 1, 1995, and subsequently amended on February 12, 1997, and amended and
restated as of February 25, 1999 and as of July 10, 2000. The Plan is hereby amended and restated in its entirety, and adopted by Financial Security Assurance Holdings Ltd.
effective as of November 14, 2002. The benefits, if any, with respect to any employee who terminated employment prior to the effective date of any amendment shall be determined in accordance
with the provisions of the Plan as in effect as of such termination date. 

ARTICLE 2. Definitions.  

For
purposes of the Plan, the following terms shall have the meanings set forth below: 

	2.1
	"Account" shall mean the account established for a Participant under the Plan to which contributions and earnings are credited.

	2.2
	"Basic Plan" shall mean the Financial Security Assurance Inc. Money Purchase Plan as adopted and amended.

	2.3
	"Beneficiary" shall mean the person or persons designated by the Participant to receive benefits under the Plan in the event of the
Participant's death. If there is no Beneficiary surviving the Participant, any death benefit payable hereunder shall be paid to the Participant's estate.

	2.4
	"Board" shall mean the Board of Directors of the Company.

	2.5
	"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.

	2.6
	"COLI" shall mean the corporate owned life insurance purchased by a Participating Company on a Participant's life pursuant to the Plan.

	2.7
	"Committee" shall mean the Human Resources Committee of the Board acting on the majority vote of such Committee. 

1

 
	2.8
	"Company" shall mean Financial Security Assurance Holdings Ltd., a New York corporation.

	2.9
	"Compensation" shall mean, with respect to each Plan Year, the Participant's annual base salary, cash bonus, any bonus in lieu of which
an "Equity Bonus" has been granted pursuant to the Company's 1993 Equity Participation Plan or any successor plan and any amount deferred pursuant to the Company's Deferred Compensation Plan (other
than deferrals related to "Performance Share" awards); provided, however, that in no case shall such Compensation exceed $1 million in any Plan Year.

	2.10
	"Disability" shall mean the Participant's eligibility for disability benefits under his or her Participating Company's long term
disability plan.

	2.11
	"Discharge for Cause" shall mean an Employee's termination of employment by a Participating Company due to such Employee's willful
misconduct or gross negligence in respect of his or her duties of employment with the Participating Company including, but not limited to, conviction for a felony or perpetration of a common law
fraud, which has resulted in or is likely to result in material economic damage to a Participating Company.

	2.12
	"Employee" shall mean any individual employed by a Participating Company on or after January 1, 1989 to whom benefits are
payable under the Basic Plan.

	2.13
	"Participant" shall mean an Employee who is a member of a select group of management or highly compensated employees and who has been
designated by the Committee for participation in the Plan pursuant to Section 3.1.

	2.14
	"Participating Company" shall mean the Company or any subsidiary or affiliate of the Company employing a Participant.

	2.15
	"Plan" shall mean the Financial Security Assurance Holdings Ltd. Supplemental Executive Retirement Plan as set forth herein,
previously known as, and unless specifically provided to the contrary shall include, the Financial Security Assurance Inc. Supplemental Executive Retirement Plan.

	2.16
	"Plan Year" shall mean each calendar year beginning after December 31, 1988.

	2.17
	"SERP Election Change Form" shall mean the form prescribed or accepted by the Committee by which a Participant may change a previous
distribution election.

	2.18
	"Years of Service" shall mean "Years of Service for Vesting" as defined under the Basic Plan. 

Where
used herein, the masculine gender shall be deemed, where applicable, to include the feminine gender, and references to the singular shall be deemed, where applicable, to include the plural. 

2

 

ARTICLE 3. Participation.  

	3.1
	At
any time during the Plan Year, the Chief Executive Officer may recommend an Employee to the Committee for participation in the Plan. Upon receiving such recommendation, the
Committee shall timely act upon it and shall notify the Employee in the event he or she is designated a Participant and the date as of which such participation commences. Unless otherwise determined
by the Chief Executive Officer or the Committee, each Employee attaining the rank of Director, Managing Director, Associate General Counsel, General Counsel, Executive Vice President, President or
Chairman shall be deemed to have been designated as a Participant by the Committee for all purposes of the Plan. Unless otherwise determined by the Committee, once an Employee has been approved by the
Committee as a Participant in the Plan, such Employee shall remain a Participant until all of his or her benefits with respect to the Plan have been paid or forfeited. 

ARTICLE 4. Restoration of Benefits.  

	4.1
	Amount of Restoration of Benefits. Subject to Sections 4.3(b), 4.5 and 5.2 of the Plan, the Account of a Participant who is in service
with a Participating Company on the last day of the Plan Year, and whose pension benefits under the Basic Plan for such Plan Year are limited by the application of Section 401(a)(17) of the
Code, Section 415 of the Code and other limits under the Code on the inclusion of deferred amounts for contribution purposes, shall be credited with an amount equal to the difference between:

	(a)
	the
amount of contribution related to Compensation which would have been payable to or in respect of the Participant under the Basic Plan without regard to the maximum annual pension
limitation in Section 415 of the Code or the pensionable compensation limitation in Section 401(a)(17) of the Code or the exclusion of certain deferred amounts, and

	(b)
	the
amount of contribution related to Compensation actually payable to or in respect of the Participant under the Basic Plan. 

	4.2
	Vesting. A Participant shall be 100% vested in his or her Account upon attaining age 55, upon his or her death or Disability while in
the employ of a Participating Company or upon the termination of the Plan pursuant to Section 5.2. Except as provided in Section 5.4, if a Participant terminates employment prior to an
event specified in the preceding sentence, such Participant shall be vested in his or her Account in accordance with the following schedule: 

	Completed Years of Service
 
	 	Percentage

	Less than 2	 	0
	2	 	20
	3	 	40
	4	 	60
	5	 	80
	6 or more	 	100

3

 
	4.3
	Crediting of Investment Gain/Loss.

	(a)
	The
balance of each Participant's Account shall be credited with earnings and investment gains and losses as provided below. The Committee may establish procedures permitting
Participants to designate one or more investment benchmarks specified by the Chief Executive Officer or the Committee for the purpose of determining the earnings or investment gains and losses to be
credited or debited to a Participant's Account. Investment benchmarks so specified may be made available to all Participants or selected Participants as the Chief Executive Officer or the Committee
may designate. The Committee shall have the sole discretion to make such rules as it deems desirable with respect to the administration of any such investment benchmark procedures, including rules
permitting the Participant to change the designation of investment benchmarks to be used to measure the value of the Account. The Committee, however, retains the discretion at any time to change the
investment benchmarks available to Participants, including any investment benchmarks previously specified by the Chief Executive Officer, or to discontinue the benchmark procedure. If the Committee
fails to implement an investment benchmark procedure or discontinues such procedure, or if the Participant fails to designate properly an investment benchmark, the Participant's Account shall be
credited with earnings at a rate determined by the Committee in its sole discretion, utilizing whatever factors or indicia it deems appropriate; provided, however, that the rate of return on a
Participant's Account in such circumstances shall not be less than the Chase Bank prime rate plus one percent.

	(b)
	Notwithstanding
paragraph (a) above, if the COLI on a Participant's life remains in effect (applicable to certain Participants in the Plan prior to December 31, 1994),
the amount credited to the Participant's Account pursuant to Section 4.1 shall first be used to pay the premiums on the COLI. Any amount
credited pursuant to Section 4.1 in excess of the amount needed to pay the premiums on the COLI shall be credited with earnings and investment gains and losses in the manner provided in
paragraph (a) above.

	(c)
	Nothing
in this Section 4.3 or in the Committee's rules shall give a Participant the right to require the Company or a Participating Company to acquire any asset for the
Account of the Participant, and if the Company or a Participating Company acquires any asset, or causes a trustee on its behalf to acquire any asset, to permit it to satisfy its obligations to pay the
balance of the Participant's Account, the Participant shall have no right or interest in any such asset, which shall be held by the Company or the Participating Company subject to the rights of all
unsecured creditors of the Company or the Participating Company. The rights of the Participant with respect to any designation of one or more investment benchmarks for measuring the value of any
Account hereunder shall be expressly subject to the provisions of Section 5.6 of the Plan. 

4

 

	4.4
	Form and Timing of Election.

	(a)
	Except
as otherwise provided herein, payment of the Participant's vested Account Balance shall be made as soon as administratively practicable following the Participant's death,
Disability or other termination of employment (a "Distribution Event"). Effective February 12, 1997, a Participant may elect a date subsequent to the Participant's death, Disability or other
termination of employment on which all or any portion of the amounts previously credited to his or her Account shall be distributed. Effective July 10, 2000, a Participant may elect to extend,
but not accelerate, a previously elected distribution date at any time at least 12 months before such previously elected distribution date by the execution of a SERP Election Change Form,
timely filed with the Company, provided that a SERP Election Change Form shall only be effective in respect of amounts that would not otherwise have been distributed at least 12 months after
the filing of such Form.

	(b)
	The
Participant may elect that his or her vested Account Balance be distributed in a lump sum or in installments payable over a specified number of years, not longer than
15 years; provided, however, that in no event may installment payments be elected over a number of years that is more than the Participant's life expectancy or the life expectancy of the
designated primary Beneficiary, whichever is greater, at the time the Participant elects a form of distribution. If a Participant elects the installment option, the Participant must also elect whether
installments should be made annually, quarterly or monthly. A Participant may specify different payment options (i) for different percentages or dollar amounts of a Participant's vested Account
Balance; or (ii) in the event of the death or Disability of the Participant. Distributions will be in the form of a lump sum (i) if the Participant did not choose a different
distribution option or (ii) in the event of death or Disability, if the Participant did not expressly choose a different distribution option in the event of death or Disability.

	(c)
	A
Participant shall make an election with respect to the form of distribution on or before the date three months after an Employee becomes a Participant; provided, however, that a
Participant shall be entitled to change his or her form-of-distribution election with respect to amounts thereafter contributed or earned on his or her Account balance by
making a new form-of-distribution election applicable to such future balances. Effective July 10, 2000, at any time at least 12 months before the date on which a
Participant's benefit under the Plan shall be distributed, a Participant may make the following changes to the distribution option previously elected with respect to such benefit:

	(i)
	a
Participant who previously elected a lump sum payment with respect to certain amounts may elect an installment payment option described in Section 4.4(b) of the Plan with
respect to such amounts; and 

5

 

	(ii)
	a
Participant who previously elected an installment payment option described in Section 4.4(b) of the Plan with respect to certain amounts may select a different installment
payment option described in Section 4.4(b) which provides for the payment of installments over a longer, but not a shorter, period of time with respect to such amounts. 

Any
such change in distribution options shall be made by the execution of a valid SERP Election Change Form, timely filed with the Company, provided that a SERP Election Change Form shall only be
effective in respect of amounts that would not otherwise have been distributed at least 12 months after the filing of such Form. 

	(d)
	A
form-of-distribution election and any change to a form-of-distribution election shall be effective upon submission to the Committee
or its designee and compliance with all applicable requirements established by the Committee, provided that the Committee retains the right, at its election, to make payments in a lump sum if it
elects, in its sole discretion, to do so notwithstanding any form-of-distribution election or any change thereto requesting an installment option. Notwithstanding any contrary
provision in the Plan, the Committee, in its sole discretion, retains the right, but shall have no obligation, to distribute all or any portion of a Participant's vested Account Balance in the form of
any security or other investment chosen by the Participant as an investment benchmark for measuring the value of his or her Account pursuant to Section 4.3(a) of the Plan. Further,
notwithstanding any contrary provision in the Plan, any distribution to a Participant otherwise payable hereunder shall be deferred until no later than January 2 in the year following
termination of the Participant's employment with the Company (and its subsidiaries) to the extent that such distribution, if not so deferred, would be disallowed as a tax deduction by the Company
pursuant to Section 162(m) of the Code (or any successor provision). 

	4.5
	Benefit Restoration With Respect to Certain Bonus Payments. In the event that a Participating Company accelerates the payment of
bonuses for any Plan Year by paying bonuses which would otherwise be payable in the following Plan Year, and such payment causes a Participant to be credited
with a lower total contribution under the Basic Plan and the Plan by virtue of the limitations provided in the Basic Plan and the limitations on the amount of Compensation provided in
Section 2.9 of the Plan, then, notwithstanding any such limitations, the Committee may, in its discretion, credit an additional supplemental pension contribution under the Plan for the Plan
Year in which the bonuses were paid on an accelerated basis up to the amount which would otherwise be lost to the Participant by virtue of the application of the limitations in the Basic Plan and in
the Plan. The aggregate amounts credited under the Plan, and the contributions actually payable to or in respect of the Participant under the Basic Plan, over a two Plan Year period consisting of the
Plan Year into which the bonus was accelerated and the following Plan Year, shall not be increased by virtue of the application of this Section 4.5. 

6

 

ARTICLE 5. Administration and General Provisions.  

	5.1
	Administration.

	(a)
	The
Plan shall be administered by the Committee in accordance with the administrative provisions of the Basic Plan. The Committee shall have full power and authority to interpret,
construe and administer the Plan, and review claims for benefits under the Plan, and the Committee's interpretations and constructions of the Plan and actions thereunder shall be binding and
conclusive on all persons and for all purposes.

	(b)
	The
Committee shall establish and maintain Plan records and may arrange for the engagement of such certified public accountants, actuarial consultants or legal counsel, and make use
of such agents and clerical or other personnel, as they shall require or may deem advisable for purposes of the Plan. The Committee may rely upon the written opinion of such counsel and the
consultants or accountants engaged by the Committee and may delegate to any agent or to any sub-committee or member of the Committee its authority to perform any act hereunder, including,
without limitation, those matters involving the exercise of discretion, provided that such delegation shall be subject to revocation at any time by the Committee.

	(c)
	To
the maximum extent permitted by applicable law, no member of the Committee shall be personally liable by reason of any contract or other instrument executed by him or her in his or
her capacity as a member of the Committee, nor for any mistakes of judgment made in good faith, and the Company shall indemnify and hold harmless, directly from its own assets (including the proceeds
of any insurance policy the premiums of which are paid from the Company's own assets), each member of the Committee and each officer, employee or director of the Company to whom any duty or power
relating
to the administration or interpretation of the Plan or to the engagement or control of the assets of the Plan may be delegated or allocated, against any cost or expense (including counsel fees) or
liability including any sum paid in settlement of a claim with the approval of the Company arising out of any act or omission to act in connection with the Plan. 

	5.2
	Amendment and Termination. The Plan may be amended, suspended or terminated, in whole or in part, by the Board, but no such action
shall retroactively impair or otherwise adversely affect the rights of any person to receive benefits under the Plan which have accrued prior to the date of such action, as determined by the
Committee; provided, however, that the amount of any future contribution payable to or in respect of a Participant may be reduced by the amount of any increase in the amount of pension actually
payable to the Participant or Beneficiary under the Basic Plan due to any increases in benefits payable under the Basic Plan (whether due to changes in Code Sections 401(a)(17) and 415 limitations or
otherwise) subsequent to the Participant's retirement. Anything in Section 4.4 

7

 

to
the contrary notwithstanding, in the event of the termination of the Plan, the Committee may direct that all Account balances be distributed in the form of a lump sum distribution. 

	5.3
	Company's Right to Discharge Employees. Nothing contained herein will confer upon any Participant or other employee the right to be
retained in the employ of any Participating Company, nor will it interfere with the right of any Participating Company to discharge or otherwise administer the employment and termination of
Participants and other employees without regard to the existence of the Plan.

	5.4
	Discharge for Cause. Notwithstanding any other provisions contained in the Plan, in the event of a Participant's Discharge for Cause,
such Participant and his or her Beneficiary shall forfeit all rights to any payments under the Plan.

	5.5
	Sale of Company. Nothing in the Plan shall preclude the Company from consolidating with or merging into or with, or transferring all or
substantially all its assets to, another corporation which assumes the Plan and all obligations of the Company hereunder. Under such a consolidation, merger, or transfer of assets and assumption, the
term "Company" shall refer to such other corporation and the Plan shall continue in full force and effect.

	5.6
	Source of Payments. Participants have the status of general unsecured creditors of the Company and the Plan constitutes a mere promise
by the Company to make benefit payments in the future from its general assets; provided, however, that such payments shall be reduced by the amount of any payments made to the Participant or his or
her Beneficiary from any trust or special or separate fund established
by the Company to assure such payments, and if the Company shall make any investments to aid it in meeting its obligations hereunder, the Participant and his or her Beneficiary shall have no right,
title or interest whatever in or to any such investments except as may otherwise be expressly provided in a separate written instrument relating to such investments. Nothing contained in the Plan, and
no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind between the Company and any Participant or Beneficiary. By action of its Board of Directors, any
Participating Company may assume joint and several liability with the Company with respect to any obligations under the Plan for Participants employed by the Participating Company.

	5.7
	Withholding. The Company may withhold from any benefits payable under the Plan all Federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.

	5.8
	Expenses. All expenses incurred in administering the Plan will be paid by the Company and none will be paid by the Participant.

	5.9
	Assignment. No interest of any Participant or Beneficiary hereunder shall 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. The Plan shall be binding upon and inure to the benefit of the
Company and its successors and assigns and the Participant, his or her Beneficiary and estate. Notwithstanding the foregoing, pursuant to rules comparable to those applicable to qualified domestic
relations orders, as determined by the Committee, the Committee may direct a 

8

 

distribution
prior to any distribution date otherwise described in the Plan, to an alternate payee (as defined under the rules applicable to qualified domestic relations orders). 

	5.10
	ERISA Status of Plan. The Plan is intended to constitute an "unfunded plan for management or other highly compensated individuals" as
defined in the Employee Retirement Income Security Act of 1974, as amended from time to time ("ERISA"), and is subject to certain provisions of ERISA, including certain requirements relating to
reporting, disclosure, enforcement and claims.

	5.11
	Applicable Law. The Plan shall be construed, regulated and administered according to ERISA (to the extent applicable), the Code and
the laws of the State of New York. 

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Exhibit 10.6  

 
 

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
  
    DEFERRED COMPENSATION PLAN    
  

 
 

Amended and Restated
  
    as of November 14, 2002    
  

TABLE OF CONTENTS  

	 
	 	 
	 	Page

	

ARTICLE I	
 	

ESTABLISHMENT AND PURPOSE OF THE PLAN	
 	

2
	

ARTICLE II	
 	

DEFINITIONS	
 	

2
	

ARTICLE III	
 	

PARTICIPATION	
 	

5
	

ARTICLE IV	
 	

DEFERRAL ELECTIONS	
 	

6
	

ARTICLE V	
 	

CREDITING OF DEFERRAL AMOUNTS AND ACCRUAL OF INVESTMENT GAINS OR LOSSES	
 	

9
	

ARTICLE VI	
 	

COMMENCEMENT OF BENEFITS	
 	

11
	

ARTICLE VII	
 	

BENEFICIARY DESIGNATION	
 	

12
	

ARTICLE VIII	
 	

MAINTENANCE AND VALUATION OF ACCOUNTS	
 	

13
	

ARTICLE IX	
 	

FUNDING	
 	

13
	

ARTICLE X	
 	

AMENDMENT AND TERMINATION	
 	

14
	

ARTICLE XI	
 	

FINANCIAL HARDSHIP WITHDRAWALS	
 	

15
	

ARTICLE XII	
 	

ADMINISTRATION	
 	

16
	

ARTICLE XIII	
 	

GENERAL PROVISIONS	
 	

17

  

 
 

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
  DEFERRED COMPENSATION PLAN    
  

 
 

ARTICLE I
  
    ESTABLISHMENT AND PURPOSE OF THE PLAN    
  

        1.1    Effective
as of June 1, 1995, Financial Security Assurance Holdings Ltd. established for the benefit of certain of its employees, certain employees of its
affiliates or subsidiaries and certain members of its board of directors an unfunded plan by which an eligible employee or eligible director can elect to defer, respectively, receipt of all or a
portion of his or her compensation or fees. This plan was amended and restated as of November 14, 2002. This plan, as so amended and restated, is known as the Financial Security Assurance
Holdings Ltd. Deferred Compensation Plan. 

 
 

ARTICLE II
  
    DEFINITIONS    
  

        Unless the context otherwise requires, the following terms, when used herein, shall have the meaning assigned to them in this Article II. 

        2.1    The
term "Account" shall mean a Participant's individual account, as described in Article VIII of the Plan. 

        2.2    The
term "Beneficiary" shall mean the person or persons designated by the Participant (including an individual, trust, estate, partnership, association, company,
corporation or any other entity), pursuant to Article VII of the Plan, to receive benefits under the Plan in the event of the Participant's death. 

        2.3    The
term "Board" shall mean the Board of Directors of the Company. 

        2.4    The
term "Bonus" shall mean: (i) bonus compensation payable in cash; (ii) bonus compensation payable in respect of an "Equity Bonus" awarded under the
Equity Participation Plan; (iii) an amount payable pursuant to a "Performance Shares" award under the Equity Participation Plan; and (iv) any other incentive, performance related or
other payment that, absent deferral pursuant to the Plan, would constitute taxable income to the Participant. 

        2.5    The
term "Committee" shall mean the Human Resources Committee of the Board. 

        2.6    The
term "Company" shall mean Financial Security Assurance Holdings Ltd., a New York corporation. 

        2.7    The
term "Compensation" shall mean, in respect of any Year and in each case before any deductions for amounts deferred under the Plan: (i) in the case of an
Eligible Employee, the total of his or her annual salary and Bonus with respect to such Year; and (ii) in the case of an Eligible Director, the total of his or her fees from the Company, or any
direct or indirect subsidiary thereof, with respect to such Year. 

        2.8    The
term "Deferral Amount" shall mean the amount of Compensation that a Participant defers under the terms of the Plan. 

        2.9    The
term "Deferral Period" shall mean the period of time during which a Participant elects to defer the receipt of the Deferral Amount under the terms of the Plan. 

        2.10    The
term "Deferred Compensation Plan Election Change Form" shall mean the form prescribed or accepted by the Committee by which a Participant may change a previous
election of a Deferral Amount. 

2

 

        2.11    The
term "Deferred Compensation Plan Election Form" shall mean the form prescribed or accepted by the Committee by which a Participant elects a Deferral Amount. 

        2.12    The
term "Disability" shall mean, in the case of an Eligible Employee, a determination of such condition under the Participating Company's long-term
disability plan. In the case of an Eligible Director, "Disability" shall have the same meaning as set forth in the Company's long-term disability plan and the determination of this
condition shall be made by the Committee. 

        2.13    The
term "Eligible Director" shall mean any member of the Board, or any member of the board of directors of any direct or indirect subsidiary of the Company, in each
case who is not an employee of the Company or any of its subsidiaries. 

        2.14    The
term "Eligible Employee" shall mean any participant in the Company's Supplemental Executive Retirement Plan and any other employee of a Participating Company as may
be designated from time to time by the Committee as eligible to participate in the Plan. 

        2.15    The
term "Equity Participation Plan" shall mean the Financial Security Assurance Holdings Ltd. 1993 Equity Participation Plan, as amended from time to time. 

        2.16    The
term "Participant" shall mean an Eligible Employee or Eligible Director who defers payment of Compensation under the terms of the Plan, including any former
Eligible Employee or Eligible Director who is receiving or will become eligible to receive benefits under the Plan at a later date. 

        2.17    The
term "Participating Company" shall mean, with respect to an Eligible Employee, the Company or any affiliate or subsidiary of the Company employing an Eligible
Employee. 

        2.18    The
term "Plan" shall mean the Financial Security Assurance Holdings Ltd. Deferred Compensation Plan, as set forth herein and as amended from time to time. 

        2.19    The
term "Year" shall mean the initial period from June 1, 1995 through December 31, 1995 and each 12-month calendar year thereafter beginning
with January 1, 1996. 

 
 

ARTICLE III
  
    PARTICIPATION    
  

        3.1    Each
Eligible Employee and each Eligible Director shall become a Participant, as of the date specified in Section 3.2, by electing a Deferral Amount in accordance
with Section 4.1. 

        3.2    An
Eligible Employee or Eligible Director shall become a Participant in the Plan as of the date a Deferral Amount is credited to his or her Account and shall remain a
Participant until the complete distribution of the Participant's Account, subject to Article VII hereof. 

        3.3    Notwithstanding
anything in the Plan to the contrary, the Committee shall be authorized to take such steps as may be necessary to ensure that the Plan is and remains at
all times an unfunded deferred compensation arrangement for a select group of management or highly compensated employees, within the meaning of the Employee Retirement Income Security Act of 1974, as
amended from time to time. 

 
 

ARTICLE IV
  
    DEFERRAL ELECTIONS    
  

        4.1    Except
with respect to the initial Year, in December of each Year, each Eligible Director then serving and each Eligible Employee then employed at a Participating
Company shall have the right to determine his or her Deferral Amount for the next Year, subject to the limitations set forth in this Article IV. With respect to the initial Year, the election
of a Deferral Amount by an Eligible Employee, 

3

 

or by an Eligible Director, can be made within thirty days after the effective date of the Plan but only with respect to Compensation for services rendered subsequent to the election. Subject to
Section 4.3, such Deferral Amount shall reduce the amount that is to be paid to the Participant for the Year of reference. With respect to an Eligible Employee, a separate election for a Year
may be made with respect to salary payable in that Year and with respect to a Bonus payable for that Year, including a separate election with respect to any amount payable in respect of "Performance
Shares" or "Equity Bonuses", or any other component of Bonus, as the case may be, awarded pursuant to the Equity Participation Plan. 

        4.2    An
Eligible Employee or Eligible Director who does not elect a Deferral Amount in December of any Year (or on or prior to June 30, 1995 with respect to the
initial Year) will not be permitted to make such an election until the following December, effective for the following Year. 

        4.3    No
deferral agreement with respect to a Year shall provide for a Deferral Amount of less than $5,000 for such Year; provided, however, that an election by an Eligible
Employee with respect to salary or Bonus may be conditioned upon the amount of the Eligible Employee's salary or Bonus (or component thereof) awarded. 

        4.4    Any
election of a Deferral Amount shall be effected by the execution of a valid Deferred Compensation Plan Election Form, timely filed with the Company, and shall be
irrevocable for the Year with respect to which the election is made. 

        4.5    Each
validly executed and timely filed Deferred Compensation Plan Election Form shall be effective solely with respect to the specified Year. An Eligible Director or
Eligible Employee who wishes to elect a Deferral Amount with respect to a succeeding Year must make a separate and timely election for such Year. 

        4.6    An
election with respect to a Deferral Amount for a Year must specify the Deferral Period applicable to that Deferral Amount. With respect to a Deferral Amount for any
Year, the Participant may elect a Deferral Period of a specific number of years, provided that in no event may the number of years be less than three (3). Alternatively, the Participant may elect a
Deferral Period which ends on his or her termination of employment or directorship, as the case may be, or the earlier or later of such termination or a specified number of years pursuant to the
preceding sentence. A Participant may elect a different Deferral Period for each Year's Deferral Amount or for any specified portion of any Year's Deferral Amounts. A Participant may elect to extend,
but not shorten, a previously elected Deferral Period at any time at least 12 months before the end of such previously elected Deferral Period by the execution of a valid Deferred Compensation
Plan Election Change Form, timely filed with the Company. If such previously elected Deferral Period ended upon termination of employment or directorship, then a Deferred Compensation Plan Election
Change Form shall only be effective in respect of Deferral Amounts that would not otherwise have been distributed at least 12 months after the filing of such Form. 

        4.7    Each
deferral election also must specify the payment option that will apply for the Deferral Amount, or any portion thereof, for that Year, and earnings credited on that
amount. The normal form of payment shall be a lump sum payment. A Participant may elect that the distribution be made in installments payable over a specified number of years, not longer than
15 years; provided, however, that in no event may installment payments be elected over a number of years that is more than the Participant's life expectancy or the life expectancy of the
designated primary Beneficiary, whichever is greater. If a Participant elects the installment payment option, the Participant also must elect whether installments should be made annually, quarterly or
monthly. Different payment options may be elected
with respect to the Deferral Amount, or any portion thereof, for each Year, and earnings credited on such amount. At any time at least 12 months before the end of a Deferral Period, a
Participant may 

4

 

make the following changes to the payment option previously elected with respect to the Deferral Amount corresponding to such Deferral Period: 

	(a)
	a
Participant who previously elected a lump sum payment with respect to a Deferral Amount may select an installment payment option described in this Section 4.7 of the Plan;
and

	(b)
	a
Participant who previously elected an installment payment option described in this Section 4.7 with respect to a Deferral Amount may select a different installment payment
option described in this Section 4.7 which provides for the payment of the Deferral Amount over a longer, but not a shorter, period of time. 

Any
such change in payment options shall be made by the execution of a valid Deferred Compensation Plan Election Change Form, timely filed with the Company. If such previously elected Deferral Period
ended upon termination of employment or directorship, then a Deferred Compensation Plan Election Change Form shall only be effective in respect of Deferral Amounts that would not otherwise have been
distributed at least 12 months after the filing of such Form. 

        4.8    Anything
in Section 4.6 or 4.7 to the contrary notwithstanding, on his or her Deferred Compensation Plan Election Form the Participant may elect that in the event
of his or her death or Disability any Deferral Period or form of distribution election otherwise applicable to a Deferral Amount is nullified and: (i) distribution shall be made after the date
of Disability or death; and (ii) distribution of his or her entire Account, or of any Deferral Amount, shall be made either in a lump sum or in installments payable over a specified number of
years, not longer than 15. Unless otherwise elected pursuant to the preceding sentence, in the event of the Participant's death or Disability, payment of a Participant's Account shall be made in the
form of a lump sum as soon as administratively practicable following the date of death or Disability. Any election made pursuant to this Section 4.8 may be changed at any time prior to death or
Disability by the execution of a valid Deferred Compensation Plan Election Change Form, timely filed with the Company. 

 
 

ARTICLE V
  
    CREDITING OF DEFERRAL AMOUNTS AND
  ACCRUAL OF INVESTMENT GAINS OR LOSSES    
  

        5.1    All
deferral amounts will be withheld from the electing Participant's Compensation and credited on the Company's books in the Account maintained in such Participant's
name. 

        5.2    Each
month, the balance of each Participant's Account shall be credited with earnings or investment gains and losses as provided below. The Committee may establish
procedures permitting Participants to designate one or more investment benchmarks specified by the Chief Executive Officer or the Committee for the purpose of determining the earnings or investment
gains and losses to be credited or debited to a Participant's Account. Investment benchmarks so specified may be made available to all Participants or selected Participants as the Chief Executive
Officer or the Committee may designate. The Committee shall have the sole discretion to make such rules as it deems desirable with respect to the administration of any such investment benchmark
procedures, including rules permitting the Participant to change the designation of investment benchmarks to be used to measure the value of the Account. The Committee, however, retains the discretion
at any time to change the investment benchmarks available to Participants, including any investment benchmarks previously specified by the Chief Executive Officer, or to discontinue the investment
benchmark procedure. If the Committee fails to implement an investment benchmark procedure or discontinues such procedure, or if the Participant fails to designate properly an investment benchmark,
the Participant's Account shall be credited with earnings at a rate determined by the Committee in its sole discretion, utilizing whatever factors or indicia it deems appropriate; provided, however,
that the rate of return on a Participant's Account in such circumstances shall not be less than the Chase Bank prime rate plus one 

5

 

percent. Nothing in this Article V or in the Committee's rules shall give a Participant the right to require the Company or a Participating Company to acquire any asset for the Account of the
Participant, and if the Company or a Participating Company acquires any asset, or causes a trustee on its behalf to acquire any asset, to permit it to satisfy its obligations to pay the Participant's
Deferral Amount, the Participant shall have no right or interest in any such asset, which shall be held by the Company or the Participating Company subject to the rights of all unsecured creditors of
the Company or the Participating Company. The rights of the Participant with respect to any designation of one or more investment benchmarks for measuring the value of any Account hereunder shall be
expressly subject to the provisions of Article IX of the Plan. 

 
 

ARTICLE VI
  
    COMMENCEMENT OF BENEFITS    
  

        6.1    At
the end of the Deferral Period selected by a Participant with respect to each Deferral Amount or, if applicable, termination of employment with a Participating
Company or of status as an Eligible Director, the amount credited with respect to such Deferral Amount shall be distributable to such Participant in the form of payment selected, commencing as soon as
administratively practicable. 

        6.2    Notwithstanding
Section 6.1, each Participant's Account shall be distributed in accordance with Section 4.8 in the event of the Participant's death or
Disability. 

        6.3    Notwithstanding
any other provision of the Plan to the contrary, the Committee, in its sole discretion, shall have the right, but shall not be required, to distribute
all or any portion of a Participant's benefits under the Plan in the form of any investment or security chosen by the Participant at any time as an investment benchmark for measuring the value of his
or her Account pursuant to Section 5.2 of the Plan. 

        6.4    If
the Participant or the Participant's Beneficiary is entitled to receive any benefits hereunder and is in his or her minority, or is, in the judgment of the Committee,
legally, physically or mentally incapable of personally receiving and receipting any distribution, the Committee may make distributions to a legally appointed guardian or to such other person or
institution as, in the judgment of the Committee, is then maintaining or has custody of the payee. 

        6.5    After
all benefits have been distributed in full to the Participant or to the Participant's Beneficiary, all liability under the Plan to such Participant or to his or
her Beneficiary shall cease. 

        6.6    To
the extent required by law in effect at the time payments are made, the Company or other Participating Company shall withhold from payments made hereunder the minimum
taxes required to be withheld by the federal or any state or local government, or such greater withholding amount as a Participant or the Participant's Beneficiary may designate. 

 
 

ARTICLE VII
  
    BENEFICIARY DESIGNATION    
  

        The Participant may, at any time, designate a Beneficiary or Beneficiaries to receive the benefits payable in the event of his or her death (and may designate a
successor Beneficiary or Beneficiaries to receive any benefits payable in the event of the death of any other Beneficiary). Each Beneficiary designation shall become effective only when filed in
writing with the Company during the Participant's lifetime on a form prescribed or accepted by the Company (a "Beneficiary Designation Form"). The filing of a new Beneficiary Designation Form will
cancel any Beneficiary Designation Form previously filed. If no Beneficiary shall be designated by the Participant, or if the designated Beneficiary or Beneficiaries shall not survive the Participant,
payment of the Participant's Account shall be made to the Participant's estate. If a Participant designated that payments be made in installments and did not 

6

 

designate a successor Beneficiary, the Beneficiary of such Participant may submit a Beneficiary Designation Form in respect of himself or herself and the provisions of the Plan shall apply to such
Beneficiary as if the Beneficiary were the Participant hereunder. 

 
 

ARTICLE VIII
  
    MAINTENANCE AND VALUATION OF ACCOUNTS    
  

        8.1    The
Company shall establish and maintain a separate bookkeeping Account on behalf of each Participant. The value of an Account as of any date shall equal the
Participant's Deferral Amounts theretofore credited to such Account plus the earnings and investment gains and losses credited to such Account in accordance with Article V of the Plan through
the day preceding such date and less all payments made by the Company to the Participant or his or her Beneficiary or Beneficiaries through the day preceding such date. 

        8.2    Each
Account shall be valued by the Company as of each December 31 or on such more frequent dates as designated by the Company. Accounts also may be valued by the
Company as of any other date as the Company may authorize for the purpose of determining payment of benefits, or any other reason the Company deems appropriate. 

        8.3    The
Company shall submit to each Participant, within 60 (sixty) days after the close of each Year, a statement in such form as the Company deems desirable setting forth
the balance standing to the credit of each Participant in his or her Account, including Deferral Amounts, earnings and investment gains or losses and Deferral Periods. 

 
 

ARTICLE IX
  
    FUNDING    
  

        9.1    The
benefits contemplated hereunder may be paid directly by the Company, any other Participating Company or through any trust established by the Company hereunder to
assist in meeting its obligations. Nothing contained herein, however, shall create any obligation on the part of the Company or any other Participating Company to set aside or earmark any monies or
other assets specifically for payments under the Plan. 

        9.2    Notwithstanding
anything in the Plan to the contrary, Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights,
interest or claims in any specific property or assets of the Company or any other Participating Company, nor shall they be beneficiaries of, or
have any rights, claims or interests in, any funds, securities, life insurance policies, annuity contracts, or the proceeds therefrom, owned or which may be acquired by the Company. Such funds,
securities, policies or other assets shall not be held in any way as collateral security for the fulfillment of the obligations under the Plan. Any and all of such assets shall be, and remain, for
purposes of the Plan, the general unpledged, unrestricted assets of the Company or Participating Company, as the case may be. 

        9.3    The
obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Company, or Participating Company pursuant to the succeeding sentence, to
pay money in the future. By action of its board of directors, any Participating Company may assume joint and several liability with the Company with respect to any obligations under the Plan for
Eligible Employees or Eligible Directors of the Participating Company. 

7

 

 
 

ARTICLE X
  
    AMENDMENT AND TERMINATION    
  

        10.1    The
Board, or its duly authorized delegates, may at any time amend the Plan in whole or in part; provided, however, that no amendment shall be effective to decrease the
accrued benefits or rights of any Participant under the Plan. Written notice of any such amendment shall be given to each Participant. 

        10.2    The
Board may at any time terminate the Plan; provided, however, that such termination shall not decrease the accrued benefits or rights of any Participant under the
Plan. Upon any termination of the Plan under this Section 10.2, each Participant shall cease to make deferrals under the Plan, and all amounts shall prospectively cease to be deferred for the
balance of such Year. Accounts shall be maintained and distributed pursuant to such terms, at such times and upon such conditions as were effective immediately prior to the termination of the Plan;
provided, however, that the Committee, in its discretion, may direct that all benefits payable under the Plan be distributed in the form of a lump sum distribution following the Plan's termination. 

 
 

ARTICLE XI
  
    FINANCIAL HARDSHIP WITHDRAWALS    
  

        11.1    Subject
to the provisions set forth herein, a Participant may withdraw up to 100% (one hundred percent) of his or her Account balance as necessary to satisfy immediate
and heavy financial needs of the Participant which the Participant is unable to meet from any other resource reasonably available to the Participant. The amount of such hardship withdrawal may not
exceed the amount required to meet such need. 

        11.2    (a)
Upon written application, the Committee, in its sole discretion, may grant a withdrawal to the Participant for any of the following unforeseen financial hardships: 

        (i)    unusual
medical expenses incurred by the Participant for the Participant or his or her dependents; 

        (ii)    threat
of foreclosure upon or eviction from the Participant's primary residence; or 

        (iii)    any
other situation which the Committee shall deem to constitute financial hardship. 

        (b)    The
Participant shall be required to furnish evidence of purpose and need to the Committee on forms prescribed by or acceptable to the Company. 

        11.3    For
purpose of determining the Participant's Account under this Article XI, the earnings and investment gains and losses credited to the Participant's Account
shall be determined pursuant to Section 5.2 as if the Participant had terminated employment with the Company as of the date of the relevant hardship withdrawal distribution made hereunder. 

        11.4    Notwithstanding
any other provision of the Plan to the contrary, upon written application of a Participant, the Committee may, in the case of financial hardship,
authorize the cessation of deferrals by such Participant. 

 
 

ARTICLE XII
  
    ADMINISTRATION    
  

        12.1    The
administration of the Plan shall be vested in the Committee. 

8

 

        12.2    The
Committee shall have general charge of the administration of the Plan and shall have full power and authority to make its determinations effective. All decisions of
the Committee shall be by a vote of the majority of its members and shall be final and binding unless the Board shall determine otherwise. Members of the Committee, whether or not Eligible Employees
or Eligible Directors, shall be eligible to participate in the Plan while serving as a member of the Committee, but a member of the Committee shall not vote or act upon any matter which relates solely
to such member as a Participant. The Committee may delegate to any agent or to any sub-committee or member of the Committee its authority to perform any act hereunder, including, without
limitation, those matters involving the exercise of discretion, provided that such delegation shall be subject to revocation at any time by the Committee. 

        12.3    In
addition to all other powers vested in it by the Plan, the Committee shall have power to interpret the Plan, to establish and revise rules and regulations relating
to the Plan and to make any other determinations that it believes necessary or advisable for the administration of the Plan. The Committee shall have absolute discretion and all decisions made by the
Committee pursuant to the exercise of its authority (including, without limitation, any interpretation of the Plan) shall be final and binding, in the absence of arbitrary or capricious action, on all
persons and shall be accorded the maximum deference permitted by law. 

        12.4    The
Company shall indemnify and hold harmless the members of the Committee against any and all claims, loss, damage, expense or liability arising from any action or
failure to act with respect to the Plan to the fullest extent permitted by law. 

 
 

ARTICLE XIII
  
    GENERAL PROVISIONS    
  

        13.1    Neither
the establishment of the Plan, nor any modification thereof, nor the creation of an Account, nor the payment of any benefits shall be construed: (a) as
giving the Participant, Beneficiary or other person any legal or equitable right against the Company unless such right shall be specifically provided for in the Plan or conferred by affirmative action
of the Company in accordance with the terms and provisions of the Plan; or (b) as giving an Eligible Employee the right to be retained in the service of a Participating Company or to continue
as a member of the Board or the board of directors
of any Participating Company, and the Participant shall remain subject to discharge or removal to the same extent as if the Plan had never been established. 

        13.2    No
interest of any Participant or Beneficiary hereunder shall 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. Notwithstanding the foregoing, pursuant to rules comparable to those applicable to qualified domestic
relations orders, as determined by the Committee, the Committee may direct a distribution prior to any distribution date otherwise described in the Plan, to an alternate payee (as defined under the
rules applicable to qualified domestic relations orders). 

        13.3    All
pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, as the identity of the person or persons may require. As the
context may require, the singular may be read as the plural and the plural as the singular. 

        13.4    Any
notice or filing required or permitted to be given to the Committee under the Plan shall be sufficient if in writing and delivered, or sent by registered or
certified mail, to the principal office of the Company, directed to the attention of each of the President and the General Counsel of the Company. Such notice shall be deemed given as of the date of
receipt. 

        13.5    Should
any provision of the Plan or any rule or procedure thereunder be deemed or held to be unlawful or invalid for any reason, such fact shall not adversely affect
the other provisions of the 

9

 

Plan, or any rule or procedure thereunder, unless such invalidity shall render impossible or impractical the functioning of the Plan, and, in such case, the appropriate parties shall immediately
adopt a new provision or rule or procedure to take the place of the one held illegal or invalid. 

        13.6    Any
dispute, controversy or claim between the Company and any Participant, Beneficiary or other person arising out of or relating to the Plan shall be settled by
arbitration conducted in the City of New York, in accordance with the Commercial Rules of the American Arbitration Association then in force and New York law. In any dispute or controversy or claim
challenging any determination by the Committee, the arbitrator(s) shall uphold such determination in the absence of the arbitrator's finding of the presence of arbitrary or capricious action by the
Committee. The arbitration decision or award shall be final and binding upon the parties. The arbitration shall be in writing and shall set forth the basis therefor. The parties hereto shall abide by
all awards rendered in such arbitration proceedings, and all such awards may be enforced and executed upon in any court having jurisdiction over the party against whom enforcement of such award is
sought. Each party shall bear its own costs with respect to such arbitration, including reasonable attorneys' fees; provided, however, that: (i) the fees of the American Arbitration Association
shall be borne equally by the parties; and (ii) if the arbitration is resolved in favor of the Participant, Beneficiary or other person asserting a claim under the Plan, such person's cost of
the arbitration and the fees of the American Arbitration Association shall be paid by the Company. 

        13.7    Nothing
contained herein shall preclude a Participating Company from merging into or with, or being acquired by, another business entity. 

        13.8    The
liabilities under the Plan shall be binding upon any successor or assign of the Company, or of another Participating Company that has assumed liability pursuant to
Section 9.3, and upon any purchaser of substantially all of the assets of the Company or such Participating Company. Subject to Section 10.2, this Plan shall continue in full force and
effect after such an event, with all references to the "Company" or a "Participating Company" herein referring also to such successor, assignor or purchaser, as the case may be. 

        13.9    The
Plan shall be governed by the laws of the State of New York to the extent they are not preempted by the Employee Retirement Income Security Act of 1974, as amended
from time to time. 

        13.10    The
titles of the Articles in the Plan are for convenience of reference only, and, in the event of any conflict, the text rather than such titles shall control. 

10

QuickLinks

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. DEFERRED COMPENSATION PLAN

Amended and Restated as of November 14, 2002

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. DEFERRED COMPENSATION PLAN

ARTICLE I ESTABLISHMENT AND PURPOSE OF THE PLAN

ARTICLE II DEFINITIONS

ARTICLE III PARTICIPATION

ARTICLE IV DEFERRAL ELECTIONS

ARTICLE V CREDITING OF DEFERRAL AMOUNTS AND ACCRUAL OF INVESTMENT GAINS OR LOSSES

ARTICLE VI COMMENCEMENT OF BENEFITS

ARTICLE VII BENEFICIARY DESIGNATION

ARTICLE VIII MAINTENANCE AND VALUATION OF ACCOUNTS

ARTICLE IX FUNDING

ARTICLE X AMENDMENT AND TERMINATION

ARTICLE XI FINANCIAL HARDSHIP WITHDRAWALS

ARTICLE XII ADMINISTRATION

ARTICLE XIII GENERAL PROVISIONS

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