Document:

Exhibit
10.50

 

ASSURED GUARANTY LTD.

PERFORMANCE RETENTION PLAN

 

(As Amended and Restated as
of February 14, 2008

for Awards Granted during 2007)

 

Mayer Brown LLP

 

 

ASSURED GUARANTY LTD.

PERFORMANCE RETENTION PLAN

CERTIFICATE

I, James M. Michener, General Counsel and Secretary of
Assured Guaranty Ltd., hereby certify that the attached document is a full,
true and complete copy of the Assured Guaranty Ltd. Performance Retention Plan,
as in effect on                         .

 

Dated                                         .

 

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  General and Secretary as Aforesaid

  
	
   

  	
   

  
	
   

  	
  (Seal)

  

 

2

 

SECTION 1

GENERAL

 

1.1.  Purpose.  Effective February 2, 2006, Assured
Guaranty Ltd. (the “Company”) established the Assured Guaranty Ltd. Performance
Retention Plan (the “Plan”) as a means of attracting and retaining the services
of experienced and knowledgeable officers and employees and as a means of
aligning their interests with the interests of the Company and its shareholders.  The Plan permits the Company to award
performance retention bonuses to eligible officers and employees, subject to
the terms and conditions of this Plan. 
The Plan is now amended, restated, and continued effective February 14,
2008 (the Effective Date” of the Plan as set forth herein), and shall
apply to awards granted during 2007.

 

1.2.  Participation.  Subject to the terms and conditions of the
Plan, the Committee shall determine and designate from time to time, from among
the executive and management employees of the Company and the Related
Companies, those persons who shall be granted an award under the Plan, who will
thereby become “Participants” in the Plan.

 

1.3.  Operation,
Administration, and Definitions. 
The operation and administration of the Plan shall be subject to the
provisions of Section 3 (relating to operation and administration).  Capitalized terms in the Plan shall be
defined as set forth in the Plan (including the definition provisions of Section 7).

 

SECTION 2

PERFORMANCE RETENTION BONUS AMOUNT

 

2.1.  The Performance Retention Bonus.  Subject to the terms and conditions set forth
below, the Committee may, in its discretion, award a “Performance Retention
Bonus” to a Participant.  The Performance
Retention Bonus shall equal the product of (a) a principal amount
designated by the Committee, multiplied by (b) a fraction, the numerator
of which is the Company’s Modified Adjusted Book Value as of the last day of
the applicable Performance Period and the denominator of which is the Company’s
Modified Adjusted Book Value as of the first day of the applicable Performance
Period; provided, however, that the fraction in clause (b) shall in no
event be less than one.  If the Company’s
Modified Adjusted Book Value is no greater on the last day of the applicable
Performance Period than it was on the first day of the applicable Performance
Period, then the Participant’s Performance Retention Bonus shall consist only
of the originally-designated principal amount described in clause (a) of
the immediately preceding sentence. The date on which the Committee awards the
Performance Retention Bonus to a Participant is the “Bonus Award Date” with
respect to such Performance Retention Bonus.

 

2.2.  Performance Retention Bonus Payment Date.  Except as otherwise provided in this Section 2
or as otherwise provided by the Committee on the Bonus Award Date, a
Participant’s Performance Retention Bonus shall be payable on the first to
occur of the following events (the “Performance Retention Bonus Payment Date”):
(a) the fourth anniversary of the Bonus Award Date, provided that the
Participant is still employed by the Company or a Related Company on 

 

 

such date or the Participant’s Date of Termination
resulting from his or her Retirement occurred on or prior to such date; (b) the
Participant’s Date of Termination resulting from the Participant’s death, or (c) the
date on which the Participant becomes Permanently Disabled (regardless of
whether the Participant remains employed for a period after becoming Permanently
Disabled).  The Performance Retention
Bonus shall be paid to the Participant in a lump sum on or as soon as
practicable after the Performance Retention Bonus Payment Date, but in any
event no later than the last day of the Year in which the Performance Retention
Bonus Payment Date occurs (or if later, the 15th day of the third month
following the Performance Retention Bonus Payment Date).

 

2.3.  Forfeiture of Performance Retention Bonus.  Notwithstanding any other provision of this
Plan, if the Participant’s Date of Termination occurs prior to the four-year
anniversary of the Bonus Award Date as designated in clause (a) of
subsection 2.2 (or such other date designated as the Performance Retention
Bonus Payment Date by the Committee on the Bonus Award Date in accordance with
section 2.2), the Participant shall forfeit any and all rights to the
Performance Retention Bonus on his Date of Termination.  Notwithstanding the foregoing, the
Participant shall not forfeit his rights to the Performance Retention Bonus and
shall become vested on his Date of Termination prior to the four-year
anniversary of the Bonus Award Date if the Date of Termination occurs by reason
of Retirement, as described in clause (a) of subsection 2.2, or by reason
of death, as described in clause (b) of subsection 2.2; and further
provided that a Participant shall not forfeit his rights to the Performance
Retention Bonus and shall become vested on the date he becomes Permanently
Disabled, if such Permanently Disability occurs prior to the four-year
anniversary of the Bonus Award Date and on or before his Date of Termination.

 

2.4.  Performance Period.  Except as otherwise provided by the Committee
on the Bonus Award Date, the Performance Period for a Performance Retention
Bonus is the four-year period beginning on January 1 of the Year in which
the Bonus Award Date occurs and ending on December 31 of the fourth
following Plan Year (for example, the Performance Period for a Performance
Retention Bonus with a Bonus Award Date of February 8, 2007, is the period
beginning January 1, 2007 and ending December 31, 2010).  Notwithstanding the foregoing:

 

(a)                                 If
a Participant’s Performance Retention Bonus Payment Date occurs as a result of
the Participant’s death or Retirement as described in subsection 2.2, then the
Performance Period shall end on the last day of the calendar quarter coincident
with or immediately preceding the Participant’s Date of Termination resulting
from such death or Retirement (and as provided in clause (a) of subsection
2.2, the Performance Retention Bonus Payment Date with respect to Retirement
shall be the fourth anniversary of the Bonus Award Date (or such other date
provided by the Committee on the Bonus Award Date), but as provided in clause (b) of
subsection 2.2, the Performance Retention Bonus Payment Date with respect to
death shall be the Date of Termination resulting from such death).

 

(b)                                 If
a Participant’s Performance Retention Bonus Payment Date occurs as a result of
the Participant becoming Permanently Disabled as described in subsection 2.2,
then the Performance Period shall end on the last day of the calendar quarter
coincident with or immediately preceding the date the Participant becomes
Permanently Disabled (and as provided in clause (b) of subsection 2.2, the
Performance Retention Bonus Payment Date 

 

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with respect to the Participant becoming Permanently Disabled shall be
the date on which the Participant becomes Permanently Disabled).

 

SECTION 3

OPERATION AND ADMINISTRATION

 

3.1.  Effective Date.  The “Effective Date” of the Plan is February 14,
2008, as set forth in Section 1.1.

 

3.2.  Benefits May Not Be Assigned.  The interests of a Participant under the Plan
are not 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 Participant’s rights under the Plan are not transferable other than
as designated by the Participant by will or by the laws of descent and
distribution.

 

3.3.  Plan Not Contract of Employment.  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 any Employer 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.

 

3.4.  Heirs and Successors.  The Plan shall be binding upon, and inure to
the benefit of, the Company and its successors and assigns, and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Company’s assets and business.  If any benefits deliverable to a Participant
under the Plan have not been delivered at the time of the Participant’s death,
such benefits shall be delivered to the Designated Beneficiary in accordance
with the provisions of the Plan.  The “Designated
Beneficiary” shall be the beneficiary or beneficiaries designated by a Participant
in a writing filed with the Board in such form and at such time as the Board
shall require.  If a deceased Participant
fails to designate a beneficiary, or if the Designated Beneficiary does not
survive the Participant, any benefits distributable to the Participant shall be
distributed to the legal representative of the estate of the Participant.  If a deceased Participant designates a
beneficiary and the Designated Beneficiary survives the Participant but dies before
the complete distribution of benefits to the Designated Beneficiary under the
Plan, then any benefits distributable to the Designated Beneficiary shall be
distributed to the legal representative of the estate of the Designated
Beneficiary.

 

3.5.  Distributions to Disabled Persons.  Notwithstanding the provisions of subsection
2.2 or subsection 3.4, if, in the opinion of the Committee, a Participant or
beneficiary is under a legal disability or is in any way incapacitated so as to
be unable to manage his financial affairs, the Board may direct that payment be
made to a relative or friend of such person for his benefit until claim is made
by a conservator or other person legally charged with the care of his person or
his estate, and such payment shall be in lieu of any such payment to such Participant
or beneficiary.  Thereafter, any benefits
under the Plan to which such Participant or beneficiary is entitled shall be
paid to such conservator or other person legally charged with the care of his
person or his estate.

 

3.6.  Applicable Laws.  The Plan
shall be construed and administered in accordance with the laws of Bermuda.

 

3

 

3.7.  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.

 

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.  Taxes. 
All payments under the Plan are subject to all applicable taxes, which
are the responsibility of the Participant, and the Company is authorized to
withhold any taxes as may be required by applicable law.

 

3.10.  No
Additional Benefit.  Neither the
award of a Performance Retention Bonus nor the payment made in settlement of a
Performance Retention Bonus shall be taken into account as compensation or
otherwise for purposes of determining a Participant’s right to a benefit or the
amount of any benefit under any other plan maintained by the Company or any
Related Company.

 

SECTION 4

SOURCE OF BENEFIT PAYMENTS

 

4.1.  Liability for Benefit Payments.  Subject to the provisions of this Section 4,
an Employer shall be liable for payment of benefits under the Plan with respect
to any Participant to the extent that such benefits are attributable to
services rendered by the Participant to that Employer.  Any disputes relating to liability of
Employers for benefit payments shall be resolved by the Board.

 

4.2.  No Guarantee.  Neither a Participant nor any other person
shall, by reason of the Plan, acquire any right in or title to any assets,
funds or property of the Employers whatsoever, including, without limitation,
any specific funds, assets, or other property which the Employers, in their
sole discretion, may set aside in anticipation of a liability under the
Plan.  A Participant shall have only a
contractual right to the amounts, if any, payable under the Plan, unsecured by
any assets of the Employers.  Nothing
contained in the Plan shall constitute a guarantee by any of the Employers that
the assets of the Employers shall be sufficient to pay any benefits to any
person.

 

SECTION 5

COMMITTEE

 

5.1.  Administration.  The authority to control and manage the
operation and administration of the Plan shall be vested in the Compensation
Committee of the Board (“the Committee”) in accordance with this Section 5.

 

5.2.  Powers of Committee.  The Committee’s administration of the Plan
shall be subject to the following:

 

(a)                                 Subject to the provisions of the Plan, the
Committee will have the authority and discretion to select from among the
executive and management employees of the 

 

4

 

Company and any Related Company those persons who shall be eligible to
participate in 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, 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.

 

5.3.  Delegation by
Committee.  Except to the
extent prohibited by applicable law, 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  any time.

 

5.4.  Information to be
Furnished to Committee. 
The Company shall furnish the Committee with such data and information
as it determines may be required for it to discharge its duties.  The records of the Company 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.

 

SECTION 6

AMENDMENT AND TERMINATION

 

The Board may, at any time, amend or
terminate the Plan, provided that no amendment or termination may materially
adversely affect the rights of any Participant or beneficiary under the Plan
with respect to Plan Years that have ended prior to the date on which such
amendment or termination is adopted by the Board. Notwithstanding the
foregoing, it is the intent of the Company that the Plan and the Performance
Retention Bonuses granted hereunder comply with the requirements of section
409A of the Code and applicable guidance issued thereunder (“Section 409A”),
and no amendment, modification, or termination of this Agreement shall be
adopted or effective if it would result in accelerated recognition of income or
imposition of additional tax under Section 409A.  The Board retains the right to amend the
Plan, and the Committee retains the right to amend any Performance Retention
Bonuses awarded under the Plan, to the extent it deems it necessary or
desirable to conform to the requirements of Section 409A and applicable
guidance issued thereunder.

 

SECTION 7

DEFINED TERMS

 

In addition to the other definitions
contained herein, the following definitions shall apply:

 

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

 

5

 

(b)                                Code.  The term “Code” means the
United States Internal Revenue Code of 1986, as amended.

 

(c)                                 Date of Termination.  A
Participant’s “Date of Termination” means the first day on which the Participant
is not employed by the Company or any Related Company, regardless of the reason
for the termination of employment; provided that a termination of employment
shall not be deemed to occur by reason of a transfer of the Participant between
the Company and a Related Company or between two Related Companies, nor by
reason of a Participant’s termination of employment with the Company or a
Related Company if immediately following such termination of employment the
Participant continues to be or becomes a Director; and further provided that
the Participant’s employment shall not be considered terminated while the
Participant is on a leave of absence from the Company or a Related Company
approved by the Participant’s employer. 
If, as a result of a sale or other transaction, the Participant’s
employer ceases to be a Related Company (and the Participant’s employer is or
becomes an entity that is separate from the Company), and the Participant is
not, at the end of the 30-day period following the transaction, employed by the
Company or an entity that is then a Related Company, then the occurrence of
such transaction shall be treated as the Date of Termination.

 

(d)                                 Director.  The term “Director” means a
member of the Board, who may or may not be an employee of the Company or a
Related Company.

 

(e)                                 Disability.  The Participant shall be
considered to have a “Disability” (i) during the period in which the
Participant is unable, by reason of a medically determinable physical or mental
impairment, to engage in any substantial gainful activity, which condition, in
the opinion of a physician selected by the Committee, is expected to have a
duration of not less than 180 days; and (ii) during the period following
the date on which the Participant becomes Permanently Disabled.  The Participant will be considered to be “Permanently
Disabled” if he would be treated as “disabled” in accordance with the
provisions of Treas. Reg. §1.409A-3(i)(4).

 

(f)                                   Employer.  The term “Employer” means the
Company and each of the Related Companies that adopts the Plan.

 

(g)                                Modified Adjusted Book Value.  The “Modified
Adjusted Book Value” of the Company as of any date shall be determined by the
Committee in its sole discretion, and shall be based on the book value of the
Company, derived by determining shareholders’ equity, and by then adding the
after-tax value of the financial guaranty and mortgage guaranty net unearned
premium reserves less deferred acquisition costs, plus the present value of
estimated net future installment premiums (as reported in the Company’s
quarterly Financial Supplement), excluding the effects of Accumulated Other
Comprehensive Income (AOCI) and the effects of unrealized gains and losses on
derivative financial instruments (FAS 133). 
In the event of a corporate transaction involving the Company
(including, without limitation, any share dividend, share split, extraordinary
cash dividend, recapitalization, reorganization, merger, amalgamation,
consolidation, split-up, spin-off, sale of assets or subsidiaries, combination
or exchange of shares), the Committee may further adjust the calculation of the
Company’s Modified Adjusted Book 

 

6

 

Value as the Committee deems necessary or desirable in order to
preserve the benefits or potential benefits of the Performance Retention
Bonuses awarded under the Plan.

 

(h)                                Plan Year.  The term “Plan Year” means the
calendar year.

 

(i)                                    Related Companies.  The
term “Related Company” means the Company and any corporation, partnership,
joint venture or other entity during any period in which at least fifty percent
of the voting power of all classes entitled to vote with respect to such entity
is owned, directly or indirectly, by the Company.

 

(j)                                   Retirement.  “Retirement” of a Participant
shall mean with respect to an employee of the Company or a Related Company the
occurrence of a Participant’s Date of Termination with the consent of the
Participant’s Employer after the Participant has completed five years of
service and attained age 55.  For
purposes of this definition, years of service shall be determined in accordance
with rules which may be established by the Committee, and shall take into
account service with the Company and its Subsidiaries, as well as service with
ACE Limited and its subsidiaries occurring prior to the initial public offering
of stock of the Company.  Notwithstanding
that the Participant’s Date of Termination occurs with the consent of the
Participant’s Employer after the Participant’s completion of five years of
service and the attainment of age 55, the Committee retains the discretion to
determine at any time on or prior to the applicable Performance Retention Bonus
Payment Date that the Participant’s Date of Termination did not result from
Retirement because the Participant has continued or intends to continue to be
employed by or provide services to a business in the financial services
industry, and that the Participant shall forfeit all rights to the Performance
Retention Bonus in accordance with subsection 2.3 of the Plan.

 

7Exhibit
10.58

 

ASSURED GUARANTY LTD.

PERFORMANCE RETENTION PLAN

 

(As Amended and Restated as
of February 14, 2008)

 

Mayer Brown LLP

 

 

ASSURED GUARANTY LTD.

PERFORMANCE RETENTION PLAN

 

CERTIFICATE

 

I, James M. Michener, General Counsel and Secretary of
Assured Guaranty Ltd., hereby certify that the attached document is a full,
true and complete copy of the Assured Guaranty Ltd. Performance Retention Plan,
as in effect as of February 14, 2008.

 

Dated                                         .

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  General Counsel and Secretary as 

  Aforesaid

  
	
   

  	
   

  
	
   

  	
  (Seal)

  

 

2

 

SECTION 1

GENERAL

 

1.1.  Purpose.  Effective February 2,
2006, Assured Guaranty Ltd. (the “Company”) established the Assured Guaranty
Ltd. Performance Retention Plan (the “Plan”) as a means of attracting and
retaining the services of experienced and knowledgeable officers and employees
and as a means of aligning their interests with the interests of the Company
and its shareholders.  The Plan permits
the Company to grant performance retention awards to eligible officers and
employees, subject to the terms and conditions of this Plan.  The Plan was amended, restated and continued
effective as of February 8, 2007, and subsequently restated as of February 8,
2007 in part to satisfy the requirements of section 409A of the Code.  The Plan is amended, restated, and continued
effective as of February 14, 2008, the “Effective Date” of the Plan as set
forth herein; and shall apply to awards granted on or after the Effective
Date; provided that awards granted prior to the Effective Date will be subject
to the applicable provisions of the Plan as in effect prior to the Effective
Date.  All Performance Retention Awards
under this Plan that are granted on or after the Effective Date are granted
under and pursuant to Section 4 (relating to Cash Incentive Awards) of the
Assured Guaranty Ltd. 2004 Long-Term Incentive Plan (the “LTIP”) and, except as
otherwise provided by the Committee not later than the Grant Date with respect
to the Performance Incentive Award, are intended to constitute
performance-based compensation as that term is used in the LTIP and section 162(m) of
the Code.

 

1.2.  Participation.  Subject to the terms and conditions of the
Plan, the Committee shall determine and designate from time to time, from among
the executive and management employees of the Company and the Subsidiaries,
those persons who shall be granted an award under the Plan, who will thereby
become “Participants” in the Plan.

 

1.3.  Operation,
Administration, and Definitions. 
The operation and administration of the Plan shall be subject to the
provisions of Section 3 (relating to operation and administration).  Capitalized terms in the Plan shall be
defined as set forth in the Plan (including the definition provisions of Section 7).

 

SECTION 2

PERFORMANCE RETENTION AWARD TERMS

 

2.1.  General.  Subject to the terms and conditions set forth
in the Plan, the Committee may, in its discretion, grant a “Performance
Retention Award” (sometimes also referred to in this Plan as an “Award”) to a
Participant.  The date on which the
Committee grants a Performance Retention Award to a Participant is the “Grant Date”
with respect to such Award.  Subject to
the terms and conditions set forth in the Plan, the Committee shall, not later
than the Grant Date for any Award:

 

(a)                                  Establish the time or
times at which the Award is to be paid to a Participant.

 

(b)                                 Establish the
Performance Period applicable to the Award.

 

 

(c)                                  Establish the
forfeiture provisions of the Award and such other conditions, restrictions and
contingencies as the Committee, in its discretion, determines to be appropriate.

 

2.2.  Delayed
Distribution for Specified Employees. 
If a Participant’s benefits constitute Deferred Compensation, payment of
the benefits is made by reason of Separation from Service, and the Participant
is a Specified Employee at the time of Separation from Service, payment of
benefits under the Plan may not be paid before the date that is six months
after the Separation from Service or, if earlier, the date of death of the Participant.  At the end of the six-month period described
in the preceding sentence, amounts that could not be paid by reason of the
limitation in this subsection 2.2 shall be paid on the first day of the seventh
month following Separation from Service. 
For purposes of the Plan, (i) the term “Specified Employee” shall
be defined in accordance with Treas. Reg. §1.409A-1(i) and such rules as
may be established by the Chief Executive Officer of the Company or his
delegate from time to time; and (ii) the term “Separation from Service”
shall be defined in accordance with Treas. Reg. §1.409A-1(h).

 

SECTION 3

OPERATION AND ADMINISTRATION

 

3.1.  Effective Date.  The “Effective Date” of the Plan as amended
and restated herein is February 14, 2008, as set forth in Section 1.1.

 

3.2.  Benefits May Not Be Assigned.  The interests of a Participant under the Plan
are not 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 Participant’s rights under the Plan are not transferable other than
as designated by the Participant by will or by the laws of descent and
distribution.

 

3.3.  Plan Not Contract of Employment.  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 the
Company or any Subsidiary 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.

 

3.4.  Heirs and Successors.  The Plan shall be binding upon, and inure to
the benefit of, the Company and its successors and assigns, and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Company’s assets and business.  If any benefits deliverable to a Participant
under the Plan have not been delivered at the time of the Participant’s death,
such benefits shall be delivered to the Designated Beneficiary in accordance
with the provisions of the Plan.  The “Designated
Beneficiary” shall be the beneficiary or beneficiaries designated by a
Participant in a writing filed with the Board in such form and at such time as
the Board shall require.  If a deceased
Participant fails to designate a beneficiary, or if the Designated Beneficiary
does not survive the Participant, any benefits distributable to the Participant
shall be distributed to the legal representative of the estate of the
Participant.  If a deceased Participant
designates a beneficiary and the Designated Beneficiary survives the
Participant but dies before the complete distribution of benefits to the
Designated Beneficiary under the Plan, then any benefits distributable to the
Designated Beneficiary shall be distributed to the legal representative of the
estate of the Designated Beneficiary.

 

2

 

3.5.  Distributions to Disabled Persons. 
Notwithstanding the provisions of Section 2 or subsection 3.4, if,
in the opinion of the Committee, a Participant or beneficiary is under a legal
disability or is in any way incapacitated so as to be unable to manage his
financial affairs, the Board may direct that payment be made to a relative or
friend of such person for his benefit until claim is made by a conservator or
other person legally charged with the care of his person or his estate, and
such payment shall be in lieu of any such payment to such Participant or
beneficiary.  Thereafter, any benefits
under the Plan to which such Participant or beneficiary is entitled shall be
paid to such conservator or other person legally charged with the care of his person
or his estate.

 

3.6.  Applicable Laws.  The Plan shall be construed and administered
in accordance with the laws of Bermuda.

 

3.7.  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.

 

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.  Taxes. 
All payments under the Plan are subject to all applicable taxes, which
are the responsibility of the Participant, and the Company is authorized to
withhold any taxes as may be required by applicable law.

 

3.10.  No Additional Benefit.  Neither the grant of a Performance Retention Award
nor the payment made in settlement of a Performance Retention Award shall be
taken into account as compensation or otherwise for purposes of determining a
Participant’s right to a benefit or the amount of any benefit under any other
plan maintained by the Company or any Subsidiary.

 

SECTION 4

SOURCE OF BENEFIT PAYMENTS

 

4.1.  Liability for Benefit Payments.  Subject to the provisions of this Section 4,
the Company or Subsidiary shall be liable for payment of benefits under the
Plan with respect to any Participant to the extent that such benefits are
attributable to services rendered by the Participant to the Company or that
Subsidiary.  Any disputes relating to
liability for benefit payments shall be resolved by the Board.

 

4.2.  No Guarantee.  Neither a Participant nor any other person
shall, by reason of the Plan, acquire any right in or title to any assets,
funds or property of the Company or any Subsidiary whatsoever, including,
without limitation, any specific funds, assets, or other property which the Company
or Subsidiary, in its 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 Company or Subsidiary.  Nothing contained in the Plan shall
constitute a guarantee by any of the Company or any Subsidiary that the assets
of the Company or Subsidiaries shall be sufficient to pay any benefits to any
person.

 

3

 

SECTION 5

COMMITTEE

 

The authority to control and manage the operation and
administration of the Plan shall be vested in a committee, which shall be the
Committee under the LTIP as selected in accordance with the LTIP from time to
time (“the Committee”).  The Committee
shall have the same authority with respect to the Plan as it has with respect
to the LTIP.

 

SECTION 6

AMENDMENT AND TERMINATION

 

The Board may, at any time, amend or terminate
the Plan, provided that no amendment or termination may materially adversely
affect the rights of any Participant or beneficiary under the Plan with respect
to Performance Periods that have begun prior to the date on which such
amendment or termination is adopted by the Board.  Notwithstanding the foregoing, it is the
intent of the Company that the Plan and the Performance Retention Awards
granted hereunder will be exempt from, or will comply with the requirements of section
409A of the Code and applicable guidance issued thereunder (“Section 409A”),
and no amendment, modification, or termination of this Plan shall be adopted or
effective if it would result in accelerated recognition of income or imposition
of additional tax under Section 409A. 
The Board retains the right to amend the Plan, and the Committee retains
the right to amend any Performance Retention Awards granted under the Plan, to
the extent it deems it necessary or desirable to conform to the requirements of
Section 409A and applicable guidance issued thereunder.

 

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