Document:

Exhibit
10.40

 

ASSURED GUARANTY LTD.

EMPLOYEE STOCK PURCHASE PLAN

SECTION 1

GENERAL

1.1.  Purpose.  The Assured Guaranty Ltd. Employee Stock
Purchase Plan (the “Plan”) has been established by Assured Guaranty Ltd.  (the “Company”) to provide eligible employees
of the Company and the Related Companies with an opportunity to acquire a
proprietary interest in the Company through the purchase of common shares of
the Company (“Stock”).  The Plan is
intended to qualify as an employee stock purchase plan under section 423 of the
Code, and the provisions of the Plan are to be construed in a manner consistent
with the requirements of that section.

1.2.  Operation and Administration.  The operation and administration of the Plan
shall be subject to the provisions of Section 3.  Capitalized terms in the Plan shall be
defined as set forth in Section 6 or elsewhere in the Plan.

SECTION 2

METHOD OF PURCHASE

2.1.  Eligibility.  Plan participation shall be available to (and
shall be limited to) all persons who are employees of the Employers, except
that the following persons shall not be eligible to participate in the Plan:

(a)                                  An employee who has been
employed less than 500 hours and less than six months.

(b)                                 An employee whose customary
employment is 20 hours or less per week.

(c)                                  An employee whose customary
employment is for not more than five months in any calendar year.

(d)                                 An employee who owns, or who
would own upon the exercise of any rights extended under the Plan and the
exercise of any other option held by the employee (whether qualified or
non-qualified), shares possessing 5% or more of the total combined voting power
or value of all classes of stock of the Company or of any parent or subsidiary
corporation.

Notwithstanding the foregoing provisions of
this subsection 2.1, an individual may participate in the Plan for any
Subscription Period only if he is employed by an Employer on the first day of
that period.

 

2.2.  Participation Election.  The Committee shall establish “Subscription
Periods” of not longer than one year for the accumulation of funds necessary
for payment of the Purchase Price (as defined in subsection 2.3) of Stock under
the Plan.  For any Subscription Period,
an eligible employee shall become a Plan “Participant” by filing, with the
Committee, a written payroll deduction authorization with respect to
Compensation otherwise payable to the Participant during the period.  Such payroll deductions shall be any full
percentage of the Compensation of the Participant, or any specified whole
dollar amount, up to but not more than 10% of his Compensation in either
case.  After the beginning of the
Subscription Period, and except as otherwise provided in subsection 2.4, a
Participant may not alter the rate of his payroll deductions for that
period.  Subject to the limitations of
subsection 2.3, each eligible employee who has elected to become a Participant
for a Subscription Period in accordance with the foregoing provisions of this
subsection 2.2 shall be granted on the first day of such Subscription Period an
option to purchase (at the applicable Purchase Price) on the Exercise Date (as
defined in subsection 2.3) for such Subscription Period up to a number of whole
shares of Stock determined by dividing such Participant’s accumulated payroll
deductions as of such Exercise Date by the applicable Purchase Price.  Exercise of the option shall occur as
provided in subsection 2.3, unless the Participant has terminated participation
in the Plan prior to the Exercise Date as provided in subsection 2.4 or the
Participant elects not to exercise the option as provided in subsection
2.3(b).  The option shall expire on the
last day of the Subscription Period.

1

 

2.3.  Purchase of Stock.  On the last day of each Subscription Period
(the “Exercise Date”), a Participant shall become eligible to exercise his
option to purchase the number of whole shares of Stock as his accumulated
payroll deductions for the Subscription Period will purchase, subject to the
following:

(a)                                  The “Purchase Price” per
share shall be equal to 85% of the lesser of (i) the fair market value of Stock
on the first day of the Subscription Period; or (ii) the fair market value of
Stock on the Exercise Date (or such higher price as may be determined by the
Committee from time to time).  In no
event shall the Purchase Price be less than the par value of the Stock.

(b)                                 A Participant shall be
deemed to have elected to purchase the shares of Stock which he became entitled
to purchase on the Exercise Date unless he shall notify the Company prior to
the Exercise Date, or such other time as the Committee may establish, that the
Participant he elects not to make such purchase.

(c)                                  Any accumulated payroll
deductions that are not used to purchase full shares of Stock under the Plan
shall be paid to the Participant without interest.

(d)                                 No employee shall have the
right to purchase more than $25,000 in value of Stock under the Plan (and any
other employee stock purchase plan described in Code section 423 and maintained
by the Company or any Related Company) in any calendar year, such value being
based on the fair market value of Stock as of the date on which the option to
purchase the Stock is granted, as determined in accordance with subsection 2.2
of the Plan.

2.4.  Termination of Participation.  A Participant may discontinue his
participation in the Plan for any Subscription Period, whereupon all of the
Participant’s payroll deductions for the Subscription Period will be promptly
paid to him without interest, and no further payroll deductions will be made
from his pay for that period.  If a
Participant’s employment with the Employers terminates during a Subscription
Period for any reason, all payroll deductions accumulated by the Participant under
the Plan for the period shall be paid to the Participant without interest.

SECTION 3

OPERATION AND ADMINISTRATION

3.1.  Effective Date.  Subject to the approval of the shareholders
of the Company at the Company’s 2005 annual meeting of its shareholders, the
Plan shall be effective as of the date on which it is adopted by the Board;
provided, however, that to the extent that rights are granted under the Plan
prior to its approval by shareholders, they shall be contingent on approval of
the Plan by the shareholders of the Company. 
The Plan shall be unlimited in duration and, in the event of Plan
termination, shall remain in effect as long as any rights granted under the
Plan are outstanding.

3.2.  Shares Subject to Plan.  Shares of Stock to be purchased under the
Plan shall be subject to the following:

(a)                                  The shares of Stock which
may be purchased under the Plan shall be currently authorized but unissued
shares, or shares purchased in the open market by a direct or indirect wholly
owned subsidiary of the Company (as determined by the President, Chief
Financial Officer or General Counsel of the Company).  The Company may contribute to the subsidiary
an amount sufficient to accomplish the purchase in the open market of the
shares of Stock to be so acquired (as determined by the Chairman or any Executive
Vice President of the Company).

(b)                                 Subject to the provisions of
subsection 3.3, the number of shares of Stock which may be purchased under the
Plan shall not exceed 100,000 shares in the aggregate.

(c)                                  A Participant will have no
interest in shares of Stock covered by his Subscription Agreement until the
shares are delivered to him.

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3.3.  Adjustments to Shares.

(a)                                  If the Company
shall effect any subdivision or consolidation of shares of Stock or other
capital readjustment, payment of stock dividend, stock split, combination of
shares or recapitalization or other increase or reduction of the number of
shares of Stock outstanding without receiving compensation therefor in money,
services or property, then, subject to the requirements of Code section 423,
the Committee shall adjust the number of shares of Stock available under the
Plan.

(b)                                 If the Company is
reorganized, merged or consolidated or is party to a plan of exchange with
another corporation, pursuant to which reorganization, merger, consolidation or
plan of exchange the shareholders of the Company receive any shares of stock or
other securities or property, or the Company shall distribute securities of
another corporation to its shareholders, then, subject to the requirements of
Code section 423, there shall be substituted for the shares subject to
outstanding rights to purchase Stock under the Plan an appropriate number of
shares of each class of stock or amount of other securities or property which
were distributed to the shareholders of the Company in respect of such shares.

3.4.  Limit on Distribution.  Distribution of shares of Stock or other
amounts under the Plan shall be subject to the following:

(a)                                  Notwithstanding any other
provision of the Plan, the Company shall have no liability to issue any shares
of Stock under the Plan unless such delivery or distribution would comply with
all applicable laws and the applicable requirements of any securities exchange
or similar entity.

(b)                                 In the case of a Participant
who is subject to Section 16(a) and 16(b) of the Securities Exchange Act of
1934, the Committee may, at any time, add such conditions and limitations with
respect to such Participant as the Committee, in its sole discretion, deems necessary
or desirable to comply with Section 16(a) or 16(b) and the rules and
regulations thereunder or to obtain any exemption therefrom.

(c)                                  To the extent that the Plan
provides for issuance of certificates to reflect the transfer of shares of
Stock, the transfer of such shares may, at the direction of the Committee, be
effected on a non-certificated basis, to the extent not prohibited by the
provisions of Rule 16b-3, applicable local law, the applicable rules of any
stock exchange, or any other applicable rules.

3.5.  Withholding.  All benefits under the Plan are subject to
withholding of all applicable taxes.

3.6.  Transferability.  Except as otherwise permitted under Code
section 424 and SEC Rule 16b-3, neither the amount of any payroll deductions
made with respect to a Participant’s compensation nor any Participant’s rights
to purchase shares of Stock under the Plan may be pledged or hypothecated, nor
may they be assigned or transferred other than by will and the laws of descent
and distribution.  During the lifetime of
the Participant, the rights provided to the Participant under the Plan may be
exercised only by him.

3.7.  Limitation of Implied Rights.

(a)                                  Neither a Participant nor
any other person shall, by reason of the Plan, acquire any right in or title to
any assets, funds or property of the Employers whatsoever, including, without
limitation, any specific funds, assets, or other property which the Employers,
in their sole discretion, may set aside in anticipation of a liability under
the Plan.  A Participant shall have only
a contractual right to the amounts, if any, payable under the Plan, unsecured
by any assets of the Employers.  Nothing
contained in the Plan shall constitute a guarantee by any of the Employers that
the assets of the Employers shall be sufficient to pay any benefits to any
person.

(b)                                 The Plan does not constitute
a contract of employment, and participation in the Plan will not give any
employee the right to be retained in the employ of an Employer or any Related
Company, nor any right or claim to any benefit under the Plan, unless such
right or claim has specifically accrued under the terms of the Plan.  Except as otherwise provided in the Plan, no
right to purchase shares under the Plan shall confer upon the holder thereof
any right as a shareholder of the Company prior to the date on which he
fulfills all service requirements and other conditions for receipt of such
rights.

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

3.9.  Action by Employers.  Any action required or permitted to be taken
by any Employer shall be by resolution of its board of directors, or by action
of one or more members of the board (including a committee of the board) who
are duly authorized to act for the board, or (except to the extent prohibited
by the provisions of Rule 16b-3, applicable local law, the applicable rules of
any stock exchange, or any other applicable rules) by a duly authorized officer
of the Employer.

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

SECTION 4

COMMITTEE

4.1.  Administration.  The authority to control and manage the
operation and administration of the Plan shall be vested in a committee (the
“Committee”) in accordance with this Section 4.

4.2.  Selection of Committee.  The Committee shall be selected by the Board,
and shall consist of not less than two members of the Board, or such greater
number as may be required for compliance with SEC Rule 16b-3.

4.3.  Powers of Committee.  The authority to manage and control the
operation and administration of the Plan shall be vested in the Committee,
subject to the following:

(a)                                  Subject to the provisions of
the Plan, the Committee will have the authority and discretion to establish the
terms, conditions, restrictions, and other provisions applicable to the right
to purchase shares of Stock under the Plan.

(b)                                 The Committee will have the
authority and discretion to interpret the Plan, to establish, amend, and
rescind any rules and regulations relating to the Plan, to determine the terms
and provisions of any agreements made pursuant to the Plan, and to make all
other determinations that may be necessary or advisable for the administration
of the Plan.

(c)                                  Any interpretation of the
Plan by the Committee and any decision made by it under the Plan is final and
binding on all persons.

4.4.  Delegation by Committee.  Except to the extent prohibited by the
provisions of Rule 16b-3, applicable local law, the applicable rules of any
stock exchange, or any other applicable rules, the Committee may allocate all
or any portion of its responsibilities and powers to any one or more of its
members and may delegate all or any part of its responsibilities and powers to
any person or persons selected by it. 
Any such allocation or delegation may be revoked by the Committee at any
time.

4.5.  Information to be Furnished to Committee.  The Employers and Related Companies shall
furnish the Committee with such data and information as may be required for it
to discharge its duties.  The records of
the Employers and Related Companies as to an employee’s or Participant’s
employment, termination of employment, leave of absence, reemployment and
compensation shall be conclusive on all persons unless determined to be
incorrect.  Participants and other
persons entitled to benefits under the Plan must furnish the Committee such
evidence, data or information as the Committee considers desirable to carry out
the terms of the Plan.

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4.6.  Liability and Indemnification of Committee.  No member or authorized delegate of the
Committee shall be liable to any person for any action taken or omitted in
connection with the administration of the Plan unless attributable to his own
fraud or willful misconduct; nor shall the Employers be liable to any person
for any such action unless attributable to fraud or willful misconduct on the
part of a director or employee of the Employers.  The Committee, the individual members
thereof, and persons acting as the authorized delegates of the Committee under
the Plan, shall be indemnified by the Employers, to the fullest extent
permitted by law, against any and all liabilities, losses, costs and expenses
(including legal fees and expenses) of whatsoever kind and nature which may be
imposed on, incurred by or asserted against the Committee or its members or
authorized delegates by reason of the performance of a Committee function if
the Committee or its members or authorized delegates did not act dishonestly or
in willful violation of the law or regulation under which such liability, loss,
cost or expense arises.  This
indemnification shall not duplicate but may supplement any coverage available
under any applicable insurance.

SECTION 5

AMENDMENT AND TERMINATION

The Board may, at any time,
amend or terminate the Plan, provided that, subject to subsection 3.3 (relating
to certain adjustments to shares), no amendment or termination may adversely
affect the rights of any Participant or beneficiary with respect to shares that
have been purchased prior to the date such amendment is adopted by the
Board.  No amendment of the Plan may be
made without approval of the Company’s shareholders to the extent that such
approval is required to maintain compliance with the requirements of Code
section 423.

SECTION 6

DEFINED TERMS

For purposes of the Plan, the terms listed below
shall be defined as follows:

(a)                                  Board.  The term “Board” shall mean the Board of
Directors of the Company.

(b)                                 Code.  The term “Code” means the Internal Revenue
Code of 1986, as amended.  A reference to
any provision of the Code shall include reference to any successor provision of
the Code.

(c)                                  Compensation.  The term “Compensation” means salary, except
that if a Participant does not receive salary, Compensation shall be based on
such other amount of basic compensation as determined by the Committee.

(d)                                 Dollars.  As used in the Plan, the term “dollars” or
numbers preceded by the symbol “$” shall mean amounts in United States Dollars.

(e)                                  Effective Date.  The “Effective Date” shall be the date on
which the Plan is adopted by the Board.

(f)                                    Employer.  The Company and each Related Company which,
with the consent of the Company, adopts the Plan for the benefit of its
eligible employees are referred to collectively as the “Employers” and
individually as an “Employer”.

(g)                                 Fair Market Value.  The “Fair Market Value” of a share of Stock
of the Company as of any date shall be the closing market composite price for
such Stock as reported for the New York Stock Exchange - Composite Transactions
on that date or, if Stock is not traded on that date, on the next preceding
date on which Stock was traded.

(h)                                 Participant.  The term “Participant” means any employee of
the Company who is eligible and elects to participate pursuant to the
provisions of Section 2.

(i)                                     Related Companies.  The term “Related Company” means any company
during any period in which it is a “subsidiary corporation” (as that term is
defined in Code section 424(f)) with respect to the Company.

 

5Exhibit 10.41

 

December 15, 2004

 

Mr. Robbin Conner

525 East 72nd Street—Apt. 5E

New York, New York  10021

 

Dear Robbin:

 

This will confirm our discussion about
your resignation as Executive Vice President of Assured Guaranty Corp. (“AGC”
or the “Company”) on mutually agreeable terms as set forth below.  You and AGC agree this Agreement represents
the full and complete agreement concerning your separation from employment with
AGC and any of its affiliated companies.

 

1.                                      Last Day of Employment:  You will remain on the Company’s payroll at
your present level of pay through December 31, 2004, which shall be your
effective date of resignation.  On or
prior to December 31, 2004, you must resign in writing from all of your
positions and offices with AGC and any and all of its affiliated companies
and/or the respective Boards thereof by executing the letter annexed hereto as
Exhibit A.  Between the date of this
Agreement and December 31, 2004 you will not be required to report to the
office on a daily basis but shall be available to consult with the Company
regarding matters related to AGC business.

 

2.                                      Consideration: Provided
that you sign and do not revoke this Agreement and the attached Supplemental
Release, AGC will provide you with the following consideration :

 

(a)                                  Salary
for the months of January and February 2005 to be paid on AGC’s
regular payroll schedule;

 

(b)                                 A
lump sum separation payment of $525,000 to be paid approximately ten (10) days
after you execute this Agreement (and, provided that you voluntarily choose to
sign, and do not revoke, this Agreement (including Exhibits A and B hereto) by December 21,
2004, you will receive such payment on or before December 31, 2004); and

 

(c)                                  subject
to (i) approval by Assured Guaranty Ltd.’s Board of Directors, which approval
the Compensation Committee of Assured Guaranty Ltd.’s Board of Directors and
Senior Management of the Company will strongly recommend at the next Board
meeting currently scheduled for February 9-10, 2005, and (ii) your full
compliance with the terms of this Agreement, including but not limited to the
provisions of paragraphs 13,

 

1

 

14, 15 and 16, you will receive, on or
about October 31, 2005, 28,230 common shares of Assured Guaranty Ltd.
Stock which were awarded to you on April 27, 2004 pursuant to the Assured
Guaranty Ltd. Replacement Award Plan (the “Replacement Award Plan”) provided
that you then meet all conditions of the Replacement Award Plan, without regard
to the restrictions on your rendering of services for any competitor of the
Company as specified in section (i) of the definition of “Detrimental
Activity” under the Replacement Award Plan.

 

3.                                      Withholding on Payments:  Taxes, applicable withholding and authorized
or required deductions will be deducted from all payments to you and, with
respect to the benefits set forth in paragraph 2(c) herein, in accordance with
the terms of the Replacement Award Plan.

 

4.                                      Employee Benefits:  Your
employee benefits (which shall include but are not limited to
medical/hospitalization, dental insurance benefits, life insurance, short-term
disability and long-term disability insurance coverage, non-qualified
profit-sharing plan participation and 401(k) plan participation ) will remain
in effect at their current levels and on their current terms until December 31,
2004, at which time they will terminate. 
Further, you acknowledge and agree that you will not accrue any
additional vacation, sick days, personal days or any other benefit, or accrue
any further benefits in any benefit plan sponsored by AGC or any of its
affiliated companies, after December 31, 2004, and by signing below you
expressly waive any such further accruals. 
It is understood and agreed that in the event the Board of Directors
declares that an annual profit-sharing plan contribution shall be made to the
accounts of eligible participants of the Assured Guaranty Corp. 401(k) Plan
employed on December 31, 2004, your account shall be entitled to receive
the requisite portion of any such profit-sharing contribution actually paid,
notwithstanding that such contribution is made during 2005. If the Company
determines that such contribution cannot be made under the Assured Guaranty
Corp. 401(k) Plan because you are not actively performing services for the
Company, then, in lieu of making such contribution to such plan, the Company
shall pay to you the amount of such contribution under a non-qualified
arrangement, which payment shall fully satisfy any obligation of the Company to
make such contribution under the Assured Guaranty Corp. 401(k) Plan.

 

5.                                      COBRA:
Effective January 1, 2005, you may elect to continue
medical/hospitalization, dental and vision insurance coverage at your own
expense pursuant to a federal law known as COBRA.  You will receive, under separate cover,
information regarding continuing insurance coverage pursuant to COBRA. Provided
that you timely elect COBRA coverage and that you have not secured alternate
coverage, AGC will, as additional consideration for your signing this
Agreement, pay the cost of the first eight (8) months of COBRA coverage, unless
you secure alternate coverage at an earlier time, in which event and at which
time AGC-paid COBRA coverage will cease.

 

6.                                      Vacation:   You
acknowledge that you do not have any accrued but unused vacation.

 

2

 

7.                                      Reimbursement of Business Expenses:
You agree to promptly submit appropriate documentation of all authorized
business expenses incurred in connection with your performance of duties for
AGC, and AGC will reimburse you in accordance with AGC policy.  You can submit such documentation to the
Finance Department.

 

8.                                      Unemployment
Insurance:  While AGC will not
oppose a claim by you for unemployment insurance benefits, you must understand
that the New York State Department of Labor (“DOL”), not AGC, determines
whether you are eligible to receive benefits and that you cannot raise any
claim against AGC because of information that is provided to the DOL.

 

9.                                      Transition:

 

(a) Until your last day of employment, you agree to
continue to perform your duties in a professional manner and to cooperate in
the orderly and smooth transition of your job responsibilities.

 

(b) After your last day of work you agree that you
will be available, upon reasonable notice, to respond to questions and provide
assistance to AGC regarding any unfinished business and to provide full and
complete cooperation to AGC in connection with any litigation or other disputes
for which AGC may need your assistance. 
Such assistance may include, but is not limited to (i) meeting with
employees and/or representatives of AGC as needed, (ii) providing full and
complete disclosure of facts relevant to the litigation or dispute, and/or
(iii) with reasonable advance notice, being available for depositions and
preparation meetings.  AGC will reimburse
you for any reasonable out-of-pocket expenses you incur as a result of any such
post-employment cooperation.

 

(c)   Simultaneously with signing this
Agreement, you shall complete the AGC Code of Conduct Annual Affirmation
Statement annexed hereto as Exhibit B and shall cooperate with AGC in any
follow-up inquiry thereto.

 

(d)   You shall
not apply for or accept employment with AGC or any of its affiliated companies
at any time in the future.

 

10.                               Acknowledgement:  You understand and agree that absent this
Agreement, you would not otherwise be entitled to the payments and benefits
specified in this Agreement. Further, by signing this Agreement, you agree that
you are not entitled to any payments and/or benefits that are not specifically
listed in this Agreement for any past, present or future year, including but
not limited to benefits under any severance plan, benefits under any bonus plan
(including but not limited to plans relating to years 2003, 2004 and 2005),
benefits related to 2005 under any non-qualified
profit-sharing plan, stock option grants and restricted stock grants
under any long-term incentive plan, and/or stock grants under the Replacement
Award Plan, except for the award dated April 27, 2004 of 28,230 common
shares of Assured Guaranty Ltd. stock and except for those qualified retirement
benefits in which you have vested rights, in each case pursuant to the terms of
the applicable plans and applicable law. You further expressly acknowledge
that all stock

 

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option grants and restricted stock grants under the
Assured Guaranty Ltd.  2004 Long-Term
Incentive Plan are properly forfeited.

 

11.                               General Release of All Claims:  In exchange for AGC’s payments and benefits
under this Agreement, you release AGC, Assured Guaranty Re International Ltd.,
Assured Guaranty Ltd., ACE Limited, and its and/or their past and/or present
parents, subsidiaries, affiliates, predecessors, successors, assigns, officers,
directors, employees and agents (hereinafter collectively referred to as “Releasees”)
from any and all claims you may have, known or unknown, including but not
limited to those related to your employment, your separation from employment or
otherwise, from the beginning of time through the date that this Agreement
becomes effective, which is eight (8) days after you sign both this Agreement
and the attached Supplemental Release.

 

You understand and agree that you are
releasing Releasees from any and all claims for breach of contract, personal
injury, wages, benefits, defamation, slander and wrongful discharge, and any
and all claims based on any oral or written agreements or promises, whether
arising under statute (including but not limited to, claims arising under the
Family and Medical Leave Act, the Fair Labor Standards Act, the Employee
Retirement Income Security Act of 1974, the New York Labor Law, the New York
Whistleblower Statute, and any other federal, state, local, or foreign laws or
regulations), contract (express or implied), constitutional provision, common
law or otherwise, from the beginning of time through the date that this
Agreement becomes effective, which is eight (8) days after you sign both this
Agreement and the attached Supplemental Release.

 

You understand and agree that you are
releasing Releasees from any and all claims for discrimination or harassment in
employment, or retaliation, on the basis of race, color, creed, religion, age,
national origin, alienage or citizenship, gender, sexual orientation,
disability, marital status, veteran’s status, and any other protected grounds
including, but not limited to, any and all rights and claims you may have
arising under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities
Act, the Age Discrimination in Employment Act of 1967, the New York State Human
Rights Law, the New York City Human Rights Law, and any other federal, state,
local, or foreign laws or regulations, from the beginning of time through the
date that this Agreement becomes effective, which is eight (8) days after you
sign both this Agreement and the attached Supplemental Release.

 

12.                               No Claims Filed:  As a condition of AGC entering into this
Agreement, you represent that you have not filed and do not intend to file any
claim against Releasees relating to your employment, your separation from
employment or otherwise, except that you understand that you are not giving up
your right to challenge: (a) AGC’s failure to comply with its promises to make
payment and provide benefits under this Agreement; or (b) the knowing and
voluntary nature of your release of claims under the Age Discrimination in
Employment Act of l967.

 

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13.                               Confidential Information:

 

(a) You acknowledge
that AGC and its affiliated companies have, through the expenditure of
considerable time and expense over a period of years, developed extensive
confidential and proprietary information and trade secrets regarding its
business affairs (financial or otherwise), clients and prospective clients,
including, without limitation: (i) information relating to the identities,
points of contact, affairs, operations, habits and patterns of clients and
prospective clients; (ii) information relating to internal business, legal,
human resources and financial policies and practices, plans, strategies,
methodologies, operations, services, projects, status, training, advertising,
marketing, and other non-publicly disclosed information; and (iii) information
relating to its employees’ identities, skills, abilities, evaluations, work
histories, and compensation (hereinafter referred to collectively as “Confidential
Information”).

 

(b) You acknowledge
that such Confidential Information is proprietary, not available to the public
or AGC’s competitors, and provides AGC with a unique and valuable competitive
advantage, and that its use or disclosure in violation of this Agreement would
cause AGC immediate and serious irreparable injury.

 

(c) You acknowledge
that you were employed in a professional, confidential and fiduciary
relationship with AGC, that you performed certain duties with regard to AGC,
and that you were entrusted with Confidential Information in connection with
the performance of those duties.

 

(d) Accordingly, you
promise and agree that you will preserve the confidentiality of the
Confidential Information and that you will not directly or indirectly use,
disclose, reproduce, sell, retain, remove from the premises, make available to
any other person or entity, or use for your own or for any other person or
entity’s benefit, any portion of the Confidential Information.   You also promise that you will not use any
such Confidential Information to damage AGC, its interests or its customers,
providers or any other person or entity with whom AGC does business.

 

(e) In the event that
you are required by legal process to disclose any Confidential Information, you
shall immediately provide the Company’s General Counsel with written notice of
such legal obligation and shall fully cooperate with any efforts by the Company
to oppose or limit such disclosure.

 

(f) You promise and
agree (i) to return immediately to AGC any and all Confidential Information and
all other materials, documents or property belonging to AGC, including without
limitation files, records, manuals, reports, software and hardware, laptops,
computers, cell phone, blackberry, keys, equipment, identification card, access
card, credit cards, mailing lists, rolodexes, computer print-outs, and computer
disks and tapes, (ii) not to retain any copies of any Confidential Information
and/or any other materials, documents or property

 

5

 

belonging to AGC, and
(iii) to delete all Confidential Information from your home and/or personal
computer drives and from any other personal electronic, digital or magnetic
storage devices.

 

14.                               Restrictions on Solicitation:

 

Solely for the purposes of this paragraph 14, the
Restricted Period shall end October 27, 2005.

 

(a)   Solicitation of Clients

 

(i)  During the Restricted Period, you shall not,
directly or indirectly, for your own account or as proprietor, stockholder,
member, partner, director, officer, employee, agent or otherwise for or on
behalf of any person, business firm, corporation, partnership or other entity,
sell, offer to sell, or contact or solicit any business from any person,
corporation or other entity which is a customer of the Company or its
affiliates for the purpose of assisting, facilitating or encouraging, in any
way, any such customer to transfer any business from Company and/or its
affiliates, whether by termination, non-renewal or otherwise.  For purposes of this Agreement, “customers”
of the Company and its affiliates mean and include (A) any and all persons,
businesses, corporations, partnerships, or other entities which have done
business with the Company or its affiliates as a customer or have preexisting
business relationships and/or dealings with you when your employment with the
Company terminated and (B) all persons, businesses, corporations, partnerships
or other entities which control any such customer.

 

(ii)  During the Restricted Period, you shall not,
directly or indirectly, for your own account or as proprietor, stockholder,
member, partner, director, officer, employee, agent or otherwise for or on
behalf of any person, business, firm, corporation, partnership or other entity,
sell, offer to sell, or contact or solicit any reinsurance business from MBIA,
Inc. AMBAC Financial Group Inc., Financial Security Assurance Inc. or Financial
Guaranty Insurance Company, or their affiliates.

 

(b)  Solicitation
of Employees

 

During the Restricted Period you will not, directly or
indirectly, induce, encourage or solicit any other employee or officer of AGC
or any affiliated companies to leave the employ of AGC or any affiliate of AGC
or assist any person, company or entity to engage in such conduct.

 

15.                               Confidentiality of Agreement:  You agree that the terms of this Agreement
are confidential.  You agree not to tell
anyone about this Agreement and not to disclose any information contained in
this Agreement to anyone, other than your lawyer, financial advisor, immediate
family members or as required by process of law.  If you do tell your lawyer, financial advisor
or immediate family members about this Agreement or its contents, you must
immediately tell them that they must keep it confidential as well.

 

6

 

AGC also agrees to keep the terms of this
Agreement, and the circumstances leading up to it, confidential, provided
however, that AGC may disclose this information as necessary for the proper
operation of its business; to effectuate the terms of this Agreement; to brief
senior management, the Board of Directors, accountants, attorneys, rating
agencies, underwriters, regulators and the SEC; and as required by process of
law.

 

16.                               No Negative Statements:  You agree not to make, directly or
indirectly, to any person or entity, including but not limited to AGC’s employees,
AGC’s Board members, AGC’s affiliates or staff thereof, and/or the press, any
negative or disparaging oral or written statements about, or do anything which
damages, any of the Releasees, or its or their services, good will, reputation,
or financial status, or which damages it or them in any of its or their
business relationships.   AGC will
instruct its senior officers not to make, directly or indirectly, to any person
or entity, including but not limited to AGC’s employees, AGC’s Board members,
AGC’s affiliates or staff thereof, and/or the press, any negative or
disparaging oral or written statements about, or do anything which damages, you
or your services, good will, reputation, or financial status, or which damages
you in any of your business relationships.

 

17.                               Non-admission of Wrongdoing:  By entering into this Agreement, neither you
nor AGC or any of AGC’s parents, subsidiaries, affiliates, officers, directors,
employees or agents admit any wrongdoing or violation of law.

 

18.                               Applicable Law:  This
Agreement shall be interpreted, enforced and governed under the laws of the
State of New York.

 

19.                               Severability:  You agree that should a court of law find
that any provision of this Agreement is unenforceable, the remainder of this
Agreement will nonetheless still be effective.

 

20.                               Changes to the Agreement:  This Agreement may not be changed unless the
changes are in writing and signed by you and the Chief Executive Officer of
AGC.

 

21.          Supplemental Release:    On or after, but not before, December 31,
2004 you must sign the attached Supplemental Release and return it to Ivana
Grillo, Vice President, Human
Resources, Assured Guaranty Corp., 1325 Avenue of the Americas, NY, NY 10019.

 

22.                               Arbitration
of Disputes:    Without in any
way affecting the terms of paragraph 11, you and AGC agree that any of the
following types of disagreements, disputes or claims shall be resolved
exclusively by arbitration in New York, New York in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association and
judgment upon the award rendered by the Arbitrator may be entered in any court
having jurisdiction over the matter:

 

7

 

a)                                      those
arising out of or relating to the validity of this Agreement or how it is
interpreted or implemented, provided that the resolution of any disagreement
related to your eligibility for fringe benefits shall be subject to the terms
of the benefit plans and the substantive provisions of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”); and

 

b)                                     those
involving in any way, or related to your employment with AGC or the termination
of that employment, if for any reason your release and waiver under paragraph
11 is found to be unenforceable or inapplicable.

 

In the event of such a
dispute, the prevailing party shall be entitled to an award of all costs and
expenses reasonably incurred including reasonable legal fees. The foregoing provisions of
this paragraph 22 shall not be construed to limit the Company’s right to obtain
relief under the following provisions of this paragraph relating to equitable
remedies with respect to any matter or controversy subject to paragraphs 13,
14, 15, or 16 and, pending a final determination by the arbitrator with respect
to any such matter or controversy, the Company shall be entitled to obtain any
such relief by direct application to state, federal, or other applicable court,
without being required to first arbitrate such matter or controversy.  You acknowledge that the Company would be
irreparably injured by a violation of paragraphs 13, 14, 15, or 16, and you
agree that the Company, in addition to any other remedies available to it for
such breach or threatened breach, shall be entitled to a preliminary injunction,
temporary restraining order, or other equivalent relief, restraining you from
any actual or threatened breach of paragraphs 13, 14, 15, or 16.  If a bond is required to be posted in order
for the Company to secure an injunction or other equitable remedy, the parties
agree that said bond need not be more than a nominal sum.

 

23.                               Entire Agreement:  This Agreement contains the entire agreement
between you and AGC, and replaces and supercedes any and all prior agreements
or understandings between you and AGC and any and all of AGC’s affiliated
companies, whether written or oral, including but not limited to the Employment
Agreement dated July 1, 2003 between you and ACE Guaranty Corp., which
Employment Agreement shall be null and void. 
By signing this Agreement you acknowledge that you have not relied upon
any other statement, document, agreement or contract, whether written or oral,
in deciding to enter into this Agreement.

 

24.                               Waiver:  By signing this Agreement, you acknowledge
that:

 

(a) You have carefully
read, and understand, this Agreement.

 

(b) You have been
given up to twenty-one (21) days to consider your rights and obligations under
this Agreement and to consult with an attorney.

 

(c) AGC advised you to
consult with an attorney and/or any other advisors of your choice before
signing this Agreement.

 

8

 

(d)  You consulted with Michael Volpe, Esq. of
Clifton Budd DeMaria, the attorney of your choice.

 

(e) You understand
this Agreement is legally binding and by signing it you give up certain rights.

 

(f) You have
voluntarily chosen to enter into this Agreement and have not been forced or
pressured in any way to sign it.

 

(g) You knowingly and
voluntarily release AGC, Assured Guaranty Re International Ltd., Assured
Guaranty Ltd., ACE Limited, and its and/or their parents, subsidiaries,
affiliates, officers, directors, employees and agents from any and all claims
you may have, known or unknown, in exchange for the benefits you have obtained
by signing this Agreement, and you acknowledge that these benefits are in
addition to any benefits that you would have otherwise received if you did not
sign this Agreement, except that it is understood and agreed that you are not
releasing your right to challenge AGC’s failure to comply with its promises to
make payment and provide benefits under this Agreement.

 

(h) The General
Release in this Agreement includes a waiver of all rights and claims you may
have under the Age Discrimination in Employment Act of 1967(29 U.S.C. 621 et
seq.), and

 

(i) This Agreement
does not waive any rights or claims that may arise after this Agreement is
signed and becomes effective, which is eight (8) days after you sign both this
Agreement and the attached Supplemental Release.

 

25.                               Return of Signed Agreement:  You should return the signed Agreement to
Ivana Grillo, Vice President, Human Resources, Assured Guaranty Corp., 1325
Avenue of the Americas, NY, NY 10019 no later than December 31,
2004.

 

26.                               Effective Date:  You have seven (7) days from the date you
sign both this Agreement and the attached Supplemental Release to change your
mind.  If you change your mind, you must
send written notice of your decision to Ivana Grillo, Vice President of Human
Resources, so that Ms. Grillo receives your revocation no later than the eight
(8th) day after you originally signed this Agreement or the attached
Supplemental Release, as applicable.  You
should understand that AGC will not be required to make payments or provide the
benefits herein unless this Agreement becomes effective.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  James Michener

  
	
   

  	
  General Counsel

  

 

9

 

	
  Read, Accepted and Agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Robbin Conner

  	
  Date

  
	
   

  	
   

  
	
   

  	
   

  
	
  State of                   )

  	
   

  
	
   

  	
  ss.:

  	
   

  
	
  County of                   )

  	
   

  
	
   

  	
   

  
					

 

On the       
day of           , 2004
before me personally came Robbin Conner, to me known and known to me to be the
individual described in and who executed the foregoing instrument, and duly
acknowledged to me that he
executed the same.

 

 

	
   

  	
   

  
	
  Notary Public

  

 

10

 

SUPPLEMENTAL RELEASE

 

In
exchange for the payments and benefits described in the Agreement dated December 15,
2004 (“Agreement”), I RELEASE AGC, Assured Guaranty Re International Ltd.,
Assured Guaranty Ltd., ACE Limited, and its and/or their past and/or present
parents, subsidiaries, affiliates, predecessors, successors, assigns, officers,
directors, employees and agents (hereinafter collectively referred to as “Releasees”).

 

By
signing below, I  SPECIFICALLY
RELEASE  Releasees from ANY AND ALL CLAIMS I may have, known or unknown, including
but not limited to those related to my employment, my separation from
employment or otherwise, from the
beginning of time through the date that the Agreement becomes effective, which
is eight (8) days after I sign both the Agreement and this Supplemental
Release.

 

I
also understand and agree that I am RELEASING Releasees
from any and all claims for breach of contract, personal injury, wages, benefits,
defamation, slander, wrongful discharge, and any and all claims based on any
oral or written agreements or promises, including, but not limited to, claims
arising under the Family and Medical Leave Act, the Fair Labor Standards Act,  the Employee Retirement Income Security Act
of 1974, the New York State Labor Law and the New York Whistleblower Statute,
from the beginning of time through the date that the Agreement becomes
effective, which is eight (8) days after I sign both the Agreement and this
Supplemental Release.

 

Further,
I understand and agree that I am also RELEASING Releasees
from any and all claims for discrimination or harassment in employment, or
retaliation, on the basis of race, color, creed, religion, age, national
origin, alienage or citizenship, gender, sexual orientation, disability,
marital status, veteran’s status and any other protected grounds, including,
but not limited to, any and all rights and claims I may have arising under
Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act,
the Age Discrimination in Employment Act of 1967, the New York State Human
Rights Law, the New York City Human Rights Law, and any other federal, state or
local laws or regulations, from the beginning of time through the date that the
Agreement becomes effective, which is eight (8) days after I sign both the
Agreement and this Supplemental Release.

 

I
understand that I have seven (7) days from the date I sign both the Agreement
and this Supplemental Release to change my mind.  If I change my mind, I must send written
notice of my decision to Ivana Grillo so that she RECEIVES my
revocation no later than the eighth day after I originally signed both the
Agreement and this Supplemental Release. 
I understand that AGC will not be
required to make payments or provide the benefits set forth in the Agreement
unless the Agreement becomes effective.

 

	
   

  	
   

  	
   

  
	
   

  	
  Robbin Conner

  

 

 

Dated:
                                ,
200

 

11

 

	
  STATE OF 

  	
  )

  
	
   

  	
  : ss.:

  
	
  COUNTY OF 

  	
  )

  
	
   

  

 

On the            
day of                  ,
200   before me personally came Robbin Conner, to me known and known
to me to be the individual described in, and who executed, the Supplemental
Release, and duly acknowledged to me that he executed the same.

 

 

	
   

  	
   

  
	
  Notary Public

  

 

12

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