Document:

Exhibit 10.1

 

MAC-GRAY CORPORATION

LONG TERM INCENTIVE PLAN

 

1.             Purpose.  This Plan is intended to create incentives
for certain executive officers and key employees of the Company and any
Subsidiary to allow the Company to attract and retain in its employ persons who
will contribute to the future success of the Company.  It is further the intent of the Company that
awards made under this Plan be used to achieve the twin goals of (i) aligning
executive incentive compensation with increases in stockholder value over the
long term, and (ii) using equity compensation as a tool to retain executive
officers and key employees.  In
furtherance of the goals, it is the intention of the Company that, except in
limited circumstances, fifty percent (50%) of each Award made under this Plan
will be made in the form of restricted stock and the remaining fifty percent
(50%) in the form of stock options.

 

2.             Definitions.  Capitalized terms not otherwise defined
herein shall have the meanings set forth below:

 

2.1           “Annual
Target Award” shall mean, for any Participant, a percentage of his or her base
salary at the beginning of each Fiscal Year.

 

2.2           “Committee”
shall mean those members of the Compensation Committee of the Board of
Directors of the Company who are “non-employee directors” as such term is
defined under Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended.

 

2.3           “Company”
shall mean Mac-Gray Corporation.

 

2.4           “Effective
Date” shall mean February 27, 2006.

 

2.5           “Fiscal
Year” shall mean the fiscal year of the Company, which is the 12-month period
ending December 31 of each year.

 

2.6           “Participant”
shall mean any executive officer or key employee recommended by the Chief
Executive Officer and approved by the Committee pursuant to Section 4 to participate
herein.

 

2.7           “Performance
Measure” shall mean, for any Fiscal Year, (a) the Company’s earnings before
interest, taxes, depreciation and amortization

 

 

(EBITDA) for
such Fiscal Year, less (b) the Company’s interest expense and capital
expenditures for such Fiscal Year, as determined by reference to the Company’s
audited financial statements for such Fiscal Year.

 

2.8           “Plan”
shall mean the Mac-Gray Corporation Long Term Incentive Plan, as amended from
time to time.

 

2.9           “Stock”
shall mean the common stock, par value $.01 per share, of the Company.

 

2.10         “Stock
Option Plan” shall mean the Mac-Gray Corporation 2005 Stock Option and
Incentive Plan, as amended or amended and/or restated from time to time.

 

2.11         “Subsidiary”
shall mean any corporation or other entity in which the Company has a
controlling interest, either directory or indirectly.

 

3.             Administration.  The Committee shall have sole discretionary
power to determine the target amount for the Performance Measure each year, to
interpret the provisions of this Plan, to administer and make all decisions and
exercise all rights of the Company with respect to this Plan.  The Committee shall have final authority to
apply the provisions of the Plan and determine, in its sole discretion, the
amount of the Annual Target Awards for Participants hereunder and shall also
have the exclusive discretionary authority to make all other determinations
(including, without limitation, the interpretation and construction of the Plan
and the determination of relevant facts) regarding the entitlement to benefits
hereunder and the amount of benefits to be paid from the Plan.  The Committee’s exercise of this
discretionary authority shall at all times be in accordance with the terms of
the Plan and shall be entitled to deference upon review by any court, agency or
other entity empowered to review its decision, and shall be enforced provided
that it is not arbitrary, capricious or fraudulent.

 

4.             Eligibility.  For each Fiscal Year, those executive
officers and key employees recommended by the Chief Executive Officer and
approved by the Committee shall be Participants.  The selection of an individual to be a
Participant in any one Fiscal Year does not entitle the individual to be a Participant
in any other Fiscal Year.

 

5.             Annual
Target Awards.  The Committee shall
determine the Annual Target Award for each Participant.  It is expected that 50 percent of the value
of the Annual Target Award shall be awarded annually in the form of stock
options and 50 percent of the value of the Annual Target Award shall be awarded
annually in the form of restricted stock. 
Value for this purpose shall mean (a) in the case of stock options, the
Black-Scholes value of such stock options, and (b) in the case of restricted
stock, the number of shares subject to the award multiplied by the average
closing price of the Stock for the

 

 

ten
trading days immediately preceding the award date.  Stock options shall have an exercise price
equal to the fair market value of the Stock on the date of grant and shall
become exercisable over a three-year period, at the rate of 33 1/3  percent each year,
subject to continued employment of the Participant by the Company or a
Subsidiary.  The restricted stock awards
shall become vested over a three-year period, at the rate of 33 1/3 percent
each year, subject to both (x) continued employment of the Participant by the
Company or a Subsidiary and (y) the Company meeting or exceeding the
Performance Measure annual target amount established by the Committee for the
applicable Fiscal Year.  In view of the
Chief Executive Officer’s significant ownership position in the Stock, he shall
have the right to receive a cash award in lieu of a restricted stock award,
such that 50 percent of the value of his Annual Target Award shall be awarded
in the form of stock options and up to 50 percent of the value of his Annual
Target Award shall be awarded in cash. 
The amount of the cash award shall equal the closing price of the Stock
on the trading date immediately preceding the applicable vesting date
multiplied by the number of shares of Stock that would have vested on such date
to the Chief Executive Officer if his award had been in the form of restricted
stock.  The Committee shall have full discretion
to modify the Performance Measure target amount for any Fiscal Year at any
time, including without limitation to take into account any acquisitions or
other corporate transactions occurring during such Fiscal Year.

 

6.             Forfeiture.  Unless otherwise determined by the Committee,
a Participant whose employment with the Company terminates for any reason prior
to fulfilling the vesting requirements for his or her stock options and
restricted stock award hereunder shall forfeit all rights to his or her stock
options and restricted stock that remain unvested on his or her termination
date.

 

7.             Amendment
or Termination of Plan.  The Compensation
Committee may amend or terminate this Plan at any time or from time to time;
provided, however, that no such amendment or termination shall, without the written
consent of the Participants, in any material adverse way affect the rights of a
Participant with respect to benefits earned prior to the date of amendment or
termination.

 

8.             Limitation
of Company’s Liability.  Subject to its
obligation to make payments as provided for hereunder, neither the Company nor
any person acting on behalf of the Company shall be liable for any act
performed or the failure to perform any act with respect to this Plan, except
in the event that there has been a judicial determination of willful misconduct
on the part of the Company or such person. 
The Company is under no obligation to fund any of the payments required
to be made hereunder in advance of their actual payment or to establish any
reserves with respect to this Plan.  Any
benefits which become payable hereunder shall be paid from the general assets
of the Company.  No Participant, or his
or her beneficiary or beneficiaries, shall have any right, other than the right
of an unsecured general creditor, against the Company in respect of the
benefits to be paid hereunder.

 

9.             Withholding
of Tax.  Anything to the contrary
notwithstanding, all payments required to be made by the Company hereunder
shall be subject to the withholding of

 

 

such
amounts as the Company reasonably may determine that it is required to withhold
pursuant to applicable federal, state or local law or regulation.  Withholding can be made in the form of Stock
up to the minimum withholding amount.

 

10.           Assignability.  Except as otherwise
provided by law, no benefit hereunder shall be assignable, or subject to
alienation, garnishment, execution or levy of any kind, and any attempt to
cause any benefit to be so subject shall be void.

 

11.           No
Contract for Continuing Services.  This
Plan shall not be construed as creating any contract for continued services
between the Company and any Participant and nothing herein contained shall give
any Participant the right to be retained as an employee of the Company.

 

12.           Governing
Law.  This Plan shall be construed, administered,
and enforced in accordance with the laws of the Commonwealth of Massachusetts.

 

13.           Non-Exclusivity.  The Plan does not limit the authority of the
Company, the Committee, or any subsidiary of the Company, to grant awards or
authorize any other compensation under any other plan or authority, including,
without limitation, awards or other compensation based on the same Performance
Measure used under the Plan.  In
addition, executives not selected to participate in the Plan may participate in
other plans of the Company.Exhibit 10.5

 

BY HAND

 

 

December 12, 2005

 

 

Dear Pierre:

 

This will confirm our discussions about your
resignation as President, Chief Operating Officer and director of Assured
Guaranty Re Ltd., as director of Assured Guaranty Re Overseas Ltd. and as Executive
Vice President - Reinsurance of Assured Guaranty Ltd., each a Bermuda Company
(collectively referred to as the “Company”) on mutually agreeable terms as set
forth below. You and the Company agree this Agreement represents the full and
complete agreement concerning your separation from employment with the Company
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, 2005, which shall be your effective date of resignation. On or prior to
December 31, 2005, you must resign in writing from all of your positions and
offices with the Company and any and all of its affiliated companies and/or the
respective Boards thereof by executing the letter annexed hereto as Exhibit A. Effective
December 9, 2005, you will no longer be an SEC Executive Officer of the Company
or any of its affiliated companies. Between the date of this Agreement and
December 31, 2005, you do not need to report to the office on a daily basis,
but shall be available to consult with the Company regarding matters related to
the Company’s business.

 

2.             Consideration:   The Company will pay you a total of $700,000,
payable in 24 monthly installments, beginning in January 2006. These amounts
will not be eligible for deferrals or contributions under any of the retirement
plans maintained by the Company. During this 24 month period, you will make a
good faith effort to seek other employment. If you obtain other employment
suitable to your qualifications during the 24 month period, you shall so notify
the Company and any compensation paid to you by your new employer shall reduce,
by an equivalent amount, the payments required to be made by the Company under
this paragraph.

 

In
addition, the Assured Guaranty Ltd. stock options and restricted stock granted
to you in April 2004 and February 2005 shall continue to vest through April 30,
2006. Any stock option or restricted stock not vested on April 30, 2006 shall
be forfeited. Any stock options vested prior to April 30, 2006 must be
exercised prior to the close of business on December 31, 2006. At that time,
all stock options shall be forfeited.

 

1

 

You
will be paid $200,000 at the time employees of Assured Guaranty Re Ltd. are
generally paid bonuses for 2005 performance. This payment will be subject to
the deferrals and contributions generally applicable to employees of Assured
Guaranty Re Ltd. under the retirement plans maintained by the Company.

 

3.             Withholding
on Payments:  Taxes,
applicable withholding and authorized or required deductions will be deducted
from all payments to you. The Company shall reimburse you for (i) United States
Federal, State or local tax obligations, if any, regarding your income from the
Company in 2005 and (ii) the cost of preparing and filing of any United States
Federal, State or local tax returns for 2005.

 

4.             Employee Benefits:  You will continue to receive medical and
life insurance benefits at the levels generally made available to employees of
Assured Guaranty Re Ltd. until December 31, 2007, or upon your securing
employment with another employer, whichever is earlier, at which time they will
terminate. All other benefits will terminate on December 31, 2005. Further, you
acknowledge and agree that you will not accrue any additional vacation, sick
days, personal days, Retirement Plan, car allowance, financial planning, club
or any other benefit, or accrue any further benefits in any benefit plan
sponsored by the Company or any of its affiliated companies, after December 31,
2005, and by signing below you expressly waive any such further accruals.

 

5.             Vacation:   You acknowledge that you have 10.5
accrued but unused vacation days. You will be paid for 10.5 vacation days at
your current annual rate of salary prior to January 31, 2006.

 

6.             Reimbursement
of Business Expenses:  You agree
to promptly, and in any event not later than December 31, 2005, submit
appropriate documentation of all authorized business expenses incurred in
connection with your performance of duties for the Company, and the Company
will reimburse you in accordance with Company policy. You should submit such
documentation to the General Counsel. We will reimburse you for up to $6,000
for the cost of your counsel in advising you with respect to this Agreement.

 

7.             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.

 

After your last day of
work you agree that you will be available, upon reasonable notice, to respond
to questions and provide assistance to the Company regarding any unfinished
business and to provide full and complete cooperation to the Company in connection
with any litigation or other disputes for which the Company may need your
assistance. Such assistance may include, but is not limited to (i) meeting with
employees and/or representatives of the Company 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. The Company will reimburse you for any reasonable
out-of-pocket expenses you incur as a result of any such post-employment cooperation, including the reasonable cost of your personal
attorneys, if reasonably necessary.  In addition, the Company

 

2

 

will
indemnify you and advance all reasonable costs including attorneys fees and
expenses in matters related to your employment with the Company to the maximum
extent permitted by the Company’s existing by-laws, Bermuda law, or your
Employment Agreement.  Nothing herein shall require the waiver of any
personal legal privileges.

 

(b)           Simultaneously
with signing this Agreement, you shall complete the Annual Affirmation required
under the Assured Guaranty Ltd. Code of Conduct annexed hereto as Exhibit B and
shall cooperate with the Company in any follow-up inquiry thereto.

 

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

 

8.             Acknowledgement:  You understand and agree that absent this
Agreement, you would not otherwise be entitled to all 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 your Employment Agreement dated April 28, 2004,
any severance plan, benefits under any bonus plan (including but not limited to
plans relating to years 2005 – 2007), stock option grants and restricted stock
grants under any long-term incentive plan, or any additional stock grants under
the Replacement Award Plan, except for those 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, except as
described in Section 2, all stock option grants and restricted stock grants
under the Assured Guaranty Ltd. 2004 Long-Term Incentive Plan are properly
forfeited.

 

9.             General
Release of All Claims:  In
exchange for the Company payments and benefits under this Agreement, you
unconditionally release Assured Guaranty Re Ltd., Assured Guaranty Ltd.,
Assured Guaranty U.S. Holdings, Inc. and Assured Guaranty Corp. and ACE Limited
and its and/or their past and/or present parents, subsidiaries, affiliates,
predecessors, successors, assigns, owners, shareholders, officers, directors,
employees, accountants, attorneys, advisors, representatives and agents
(hereinafter collectively referred to as “Releasees”) from any and all charges,
claims, complaints, grievances, liabilities, obligations, promises,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, and expenses of any nature you may have, known or unknown,
suspected or unsuspected, vested or contingent, 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.

 

You understand and agree that you are releasing
Releasees from any and all claims for breach of contract, personal injury,
wages, compensation, bonuses, 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 Employment Act 2000, and under any federal or state laws or
regulations applicable in the United States of America including but not
limited to the Family and Medical Leave Act, the Fair Labor Standards Act, the
Employee Retirement Income Security Act of 1974), contract (express or
implied), constitutional provision, common law or otherwise, from the beginning
of time through the date that this Agreement becomes effective.

 

3

 

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 the Employment Act 2000, the Human Rights Act 1981, Title VII of
the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age
Discrimination in Employment Act of 1967, any state anti-discrimination 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.

 

It is understood and agreed, however, that none
of the foregoing releases shall release any claims by you arising under this
Agreement.

 

In exchange for your release
and other valuable consideration, the Company hereby unconditionally releases
you from any and all charges, claims, complaints, grievances, liabilities,
obligations, promises, controversies, damages, actions, causes of action, suits
rights, demands, costs, losses and expenses of any nature related to activities
that you undertook in the ordinary course of your employment or any disclosures
you have made to the Company prior to the date of this Agreement.  The
Company further represents that it has not filed and has no present intention
of filing any claim, lawsuit, complaint, or charge against you relating to your
employment or otherwise.

 

10.          No
Claims Filed:  As a condition of
the Company entering into this Agreement, you represent that you have not filed
and do not intend to file any claim, lawsuit, complaint, or charge 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) the Company’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. You acknowledge and agree that the covenant not to file
any claim, lawsuit, complaint or charge is an essential part of this Agreement
and that without its inclusion, this Agreement would not have been reached by
the Parties.

 

11.          Confidential
Information:

 

(a)           You
acknowledge that the Company 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”).

 

4

 

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

 

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

 

(d)           Accordingly,
it is a condition subsequent of this Agreement 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
the Company, its interests or its customers, providers or any other person or
entity with whom the Company 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 the Company any and all Confidential Information
and all other materials, documents or property belonging to the Company,
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 belonging to the Company, 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.

 

12.          Restrictions
on Solicitation

 

The Restricted Period shall end December 31, 2006.

 

(a)           Solicitation
of Clients

 

(i)            It is a
condition subsequent of this Agreement that, 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

 

5

 

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)           It is a
condition subsequent of this Agreement that, 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., Financial Guaranty Insurance Company, XLCA/XLFA or their
affiliates.

 

(b)           Solicitation
of Employees

 

It is a condition subsequent of this Agreement that,
during the Restricted Period, you will not, directly or indirectly, induce,
encourage or solicit any employee or officer of the Company or any affiliated
companies to leave the employ of the Company or any affiliate of the Company or
assist any person, company or entity to engage in such conduct.

 

13.          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. The Company
also agrees to keep the terms of this Agreement, and the circumstances leading
up to it, confidential, provided however, that the Company 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, law enforcement officials, and as required by process of law.

 

14.          No
Negative Statements:  It is a
condition subsequent of this Agreement that you agree not to make, directly or
indirectly, to any person or entity, including but not limited to the Company’s
employees, the Company’s Board members, the Company’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. The Company, its board
members, and Executive Officers will not make, directly or indirectly any
negative or disparaging oral or written statements about you or your services
or reputation. Nothing herein shall limit any party from responding truthfully
to any legal process or regulatory inquiry.

 

In
the event the Company receives inquiries from your prospective employers,

 

6

 

the
Company will provide the following information:-

 

“Pierre
Samson served as President and Chief Operating Officer of Assured Guaranty Re
Ltd. from April 2004 to December 2005”.

 

15.          Non-admission
of Wrongdoing:  By entering into
this Agreement, neither you nor the Company or any of the Company’s parents,
subsidiaries, affiliates, predecessors, successors, assigns, officers,
directors, employees, accountants, attorneys, advisors, representatives or
agents admit any wrongdoing or violation of law. Neither this Agreement nor
anything in the Agreement shall be admissible in any proceeding or evidence of
wrongdoing by you or the Company.

 

16.          Representation
Regarding Disclosures of Material Facts:  You warrant that, insofar as you are aware,
you have not withheld or failed to disclose any material fact concerning
matters which you were dealing with in the performance of activities as
President, Chief Operating Officer, director or Executive Vice
President-Reinsurance of the Company, where withholding such material fact
would reasonably be expected to be significantly detrimental to the financial
results of the Company.

 

17.          Applicable
Law:  This Agreement shall be
interpreted, enforced and governed under the laws of Bermuda.

 

18.          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.

 

19.          Changes
to the Agreement:  This Agreement
may not be changed unless the changes are in writing and signed by you and any
two of the Chairman of the Board, Chief Financial Officer or the General
Counsel of the Company.

 

20.          Arbitration
of Disputes:  Without in any way
affecting the terms of paragraph 9, you and the Company agree that any of the
types of disagreements, disputes or claims listed in Section (a) and (b) below,
shall be resolved exclusively by arbitration in Hamilton, Bermuda, in
accordance with the laws of Bermuda by three arbitrators appointed by the
Parties. If the Parties cannot agree on the appointment of the arbitrators, one
should be appointed by the Company and one by you and the third shall be
appointed by the first two arbitrators. If the first two arbitrators cannot
agree on the appointment of a third arbitrator, then the third arbitrator shall
be appointed by the appropriate Bermuda court. The arbitration shall be
conducted in accordance with the rules of the Arbitration Act, 1986. The seat
of the arbitration shall be Bermuda. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.

 

(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

 

(b)
those involving in any way, or related to your employment with the Company or
the termination of that employment, if for any reason your release and waiver under
paragraph 9 is found to be unenforceable or inapplicable.

 

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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 20 shall not be construed to limit the either party’s right to
obtain injunctive relief to enforce paragraphs 11, 12, 13 or 14 and, pending a
final determination by the arbitrator with respect to any such matter or
controversy, the either party 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 11, 12,
13 or 14, 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 11,
12, 13 or 14. 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.

 

The Company acknowledges that
you would be irreparably injured by a violation of paragraphs 13 or 14, and the
Company agrees that you, in addition to any other remedies available to you for
such breach or threatened breach, shall be entitled to a preliminary
injunction, temporary restraining order, or other equivalent relief,
restraining the Company from any actual or threatened breach of paragraphs 13
or 14. If a bond is required to be posted in order for you to secure an
injunction or other equitable remedy, the parties agree that said bond need not
be more than a nominal sum.

 

21.          Entire
Agreement:  This Agreement
contains the entire agreement between you and the Company, and replaces and
supercedes any and all prior agreements or understandings between you and the
Company and any and all of the Company’s affiliated companies, whether written
or oral, including but not limited to the Employment Agreement dated April 28,
2004, between you and Assured Guaranty Ltd., Assured Guaranty, U.S. Holdings,
Inc. and Assured Guaranty Corp., which Employment Agreement is hereby
terminated and shall be null and void, except for your indemnification rights
under Section 9(f) of your Employment Agreement. By signing this Agreement, the
parties acknowledge that they have not relied upon any other statement,
document, agreement or contract, whether written or oral, in deciding to enter
into this Agreement.

 

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

 

a)             This
Agreement is written in a manner understood by you;

 

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

 

(c)           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.

 

8

 

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

 

(e)           You
consulted with the attorney of your choice.

 

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

 

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

 

(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. 

 

23.          Authority
The Company represents and
warrants that it has properly authorized this Agreement and has authorized
Walter Scott and James Michener to execute this agreement.

 

24.          Effective
Date:  This Agreement becomes
effective at the time you sign the Agreement.

 

 

Sincerely,

 

 

	
   

  	
   

  	
   

  	
   

  
	
  Walter Scott

  	
   

  	
  James M. Michener

  	
   

  
	
  Chairman of the Board

  	
   

  	
  General Counsel

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Read, Accepted and Agreed:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Pierre Samson

  	
   

  	
  Date

  	
   

  

 

9

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