Document:

Exhibit 10.1

 

FINANCIAL
SECURITY ASSURANCE HOLDINGS LTD.

 

2004 DEFERRED COMPENSATION PLAN

 

 

as of December 17, 2004

 

 

TABLE OF CONTENTS

 

	
  ARTICLE
  I

  	
  ESTABLISHMENT
  AND PURPOSE OF THE PLAN

  
	
   

  	
   

  
	
  ARTICLE
  II

  	
  DEFINITIONS

  
	
   

  	
   

  
	
  ARTICLE III

  	
  PARTICIPATION

  
	
   

  	
   

  
	
  ARTICLE
  IV

  	
  DEFERRAL
  ELECTIONS

  
	
   

  	
   

  
	
  ARTICLE
  V

  	
  CREDITING
  OF DEFERRAL AMOUNTS AND ACCRUAL OF INVESTMENT GAINS OR LOSSES

  
	
   

  	
   

  
	
  ARTICLE
  VI

  	
  COMMENCEMENT
  OF BENEFITS

  
	
   

  	
   

  
	
  ARTICLE VII

  	
  BENEFICIARY DESIGNATION

  
	
   

  	
   

  
	
  ARTICLE VIII

  	
  MAINTENANCE AND VALUATION OF
  ACCOUNTS

  
	
   

  	
   

  
	
  ARTICLE
  IX

  	
  FUNDING

  
	
   

  	
   

  
	
  ARTICLE
  X

  	
  AMENDMENT
  AND TERMINATION

  
	
   

  	
   

  
	
  ARTICLE
  XI

  	
  FINANCIAL
  HARDSHIP WITHDRAWALS

  
	
   

  	
   

  
	
  ARTICLE XII

  	
  ADMINISTRATION

  
	
   

  	
   

  
	
  ARTICLE XIII

  	
  GENERAL PROVISIONS

  

 

 

FINANCIAL
SECURITY ASSURANCE HOLDINGS LTD.

2004 DEFERRED COMPENSATION PLAN

 

 

ARTICLE I

ESTABLISHMENT AND PURPOSE OF THE PLAN

 

1.1           Effective as of June 1, 1995,
Financial Security Assurance Holdings Ltd. (the “Company”) established for the
benefit of certain of its employees, certain employees of its affiliates or
subsidiaries and certain members of its board of directors an unfunded plan by
which eligible employees or eligible directors can elect to defer,
respectively, receipt of all or a portion of their compensation or fees.  This plan was amended and restated as of July
10, 2002, November 14, 2002, May 16, 2003, November 13, 2003 and December 17,
2004.  This plan, as so amended and
restated, is known as the Financial Security Assurance Holdings Ltd. 1995 Deferred
Compensation Plan.  The Company seeks to
establish a new deferred compensation plan, serving the same purposes as the
1995 Deferred Compensation Plan, pursuant to which eligible participants can
elect to defer, respectively, receipt of all or a portion of their compensation
or fees earned or vested on or after January 1, 2005.  This new plan, as amended from time to time,
is known as the Financial Security Assurance Holdings Ltd. 2004 Deferred
Compensation Plan.

 

ARTICLE II

DEFINITIONS

 

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

 

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

 

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

 

2.3           The term “Board” shall mean the Board
of Directors of the Company.

 

2.4           The term “Bonus” shall mean:  (i) bonus compensation payable in cash; and (ii)
an amount payable pursuant to a “Performance Shares” award under the Equity
Participation Plan.

 

2.5           The
term “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time.  Any references herein to a
specific section of the Code shall be deemed to refer to the rules and
regulations under the Code in respect of such section, and to the corresponding
provisions of any future internal revenue law and the rules and regulations
thereunder.

 

2.6           The term “Committee” shall mean the
Human Resources Committee of the Board.

 

2.7           The term “Company” shall mean
Financial Security Assurance Holdings Ltd., a New York corporation.

 

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

 

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2.9           The term “Deferral Amount” shall mean
the amount of Compensation that a Participant defers under the terms of the
Plan.

 

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

 

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

 

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

 

2.13         The term “Disability” shall mean, in
the case of a Participant, that, as determined by the Committee, the
Participant is (i) unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months or (ii) by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months,
receiving income replacement benefits for a period of not less than 3 months
under an accident and health plan covering employees of the Company.

 

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

 

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

 

2.16         The term “Equity Participation Plan” shall
mean the Financial Security Assurance Holdings Ltd. 1993 Equity Participation
Plan or 2004 Equity Participation Plan, as the case may be, in each case as
amended from time to time.

 

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

 

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

 

2.19         The term “Plan” shall mean the
Financial Security Assurance Holdings Ltd. 2004 Deferred Compensation Plan, as
set forth herein and as amended from time to time.

 

2.20         The
term “Specified Employee” shall mean a key employee (as defined in Section
416(i) of the Code, without regard to paragraph (5) thereof) of a corporation
any stock in which is publicly traded on an established securities market or
otherwise.  At December 2004, Section
416(i) of the Code provides that a company’s key employees are (i) officers
(but no more than 50 officers) with annual compensation over $135,000 (for
2005, adjusted thereafter); (ii) employees who are 5% owners of the employer;
and (iii) employees who are 1% owners of the employer with annual compensation
over $150,000.

 

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2.21         The
term “Unforeseen Emergency” shall mean a severe financial hardship to the
Participant resulting from an illness or accident of the Participant, the
Participant’s spouse, or a dependent (as defined in Section 152(a) of the Code)
of the Participant, loss of the Participant’s property due to casualty, or
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant.

 

2.22         The term “Year” shall mean the initial
period from January 1, 2005 through December 31, 2005 and each 12-month calendar
year thereafter beginning with January 1, 2006.

 

ARTICLE III

PARTICIPATION

 

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

 

3.2                      Subject to Section 3.4, an
Eligible Employee or Eligible Director shall become a Participant in the Plan
as of the date a Deferral Amount is credited to his or her Account and shall
remain a Participant until the complete distribution of the Participant’s
Account, subject to Article VII hereof.

 

3.3                      Notwithstanding anything
in the Plan to the contrary, the Committee shall be authorized to take such
steps as may be necessary to ensure that the Plan (a) is and remains at all
times an unfunded deferred compensation arrangement for a select group of
management or highly compensated employees, within the meaning of the Employee
Retirement Income Security Act of 1974, as amended from time to time and (b)
satisfies the requirements of Section 409A of the Code for exclusion from gross
income of amounts deferred under the Plan.

 

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3.4                      Notwithstanding anything
in the Plan to the contrary, no Deferral Amount may be elected by any Eligible
Director or Eligible Employee if such Deferral Amount would be subject to
current income taxes in any jurisdiction notwithstanding any deferral of such
Compensation under the Plan.  To the
extent that, due to a change in law or administrative oversight, a Deferral
Amount is credited and would be subject to taxes as aforesaid, the Company
shall distribute such Compensation, adjusted for gains or losses in accordance
with Article V of the Plan, to the Participant in the form of a lump sum
distribution promptly following confirmation by the Committee of such change in
law or administrative oversight; provided, however, that such distribution
shall be made only to the extent permitted by Section 409A of the Code for
exclusion from gross income of amounts deferred under the Plan.

 

ARTICLE IV

DEFERRAL ELECTIONS

 

4.1           In December of each Year, each
Eligible Director then serving and each Eligible Employee then employed at a
Participating Company shall have the right to determine his or her Deferral
Amount for the next Year, subject to the limitations set forth in this Article
IV.  Any such Deferral Amount may be
comprised of salary and/or cash Bonus payable in respect of such next Year
and/or “Performance Shares” awarded pursuant to the Equity Participation Plan
having “Performance Cycles” scheduled to end at December 31 of such next Year;
provided that deferrals of salary may only be made with the approval the
Committee (or the Chief Executive in respect of all Participants).  With respect to the initial Year, cash
Bonuses payable in 2005 that were earned in 2004 and deferred in 2003 under the
1995 Deferred Compensation Plan shall be deemed to have been deferred under the
Plan rather than under the 1995 Deferred Compensation Plan to the extent that
the requirements of Section 409A of the Code apply to such deferrals for 

 

6

 

exclusion
from gross income of such deferred cash Bonuses.  With respect to any individual who becomes an
Eligible Employee or Eligible Director for the first time on or after January 1
but before March 1 in any Year, the election of a Deferral Amount can be made
within thirty days of becoming an Eligible Employee or Eligible Director but
only with respect to Compensation for services rendered subsequent to the
election.  Subject to Section 4.3, such
Deferral Amount shall reduce the amount that is to be paid to the Participant
for the Year of reference.  Subject to
the foregoing, an Eligible Employee may submit a separate election for a Year
with respect to salary payable in that Year, with respect to a cash Bonus
payable for that Year and with respect to any amount payable in respect of “Performance
Shares” awarded pursuant to the Equity Participation Plan having “Performance
Cycles” scheduled to end at December 31 of that Year.  Prior to the commencement of any Year, the
Chief Executive Officer or the Committee may provide, by notice to Eligible
Employees, that salary or other specified components of compensation do not
qualify for deferral under the Plan for that Year.

 

4.2           An Eligible Employee or Eligible
Director who does not elect a Deferral Amount in December of any Year will not
be permitted to make such an election until the following December, effective
for the following Year; provided that any individual who becomes an Eligible
Employee or Eligible Director for the first time on or after January 1 but
before March 1 in any year may elect a Deferral Amount within thirty days of
becoming an Eligible Employee or Eligible Director but only with respect to
Compensation for services rendered subsequent to the election.

 

4.3           No deferral agreement with respect to
a Year shall provide for a Deferral Amount of less than $5,000 for such Year;
provided, however, that an election by an Eligible Employee

 

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with
respect to salary or Bonus may be conditioned upon the amount of the Eligible
Employee’s salary or Bonus (or component thereof) awarded.

 

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

 

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

 

4.6           An election with respect to a Deferral
Amount for a Year must specify the Deferral Period applicable to that Deferral
Amount.  With respect to a Deferral
Amount for any Year, the Participant may elect a Deferral Period of a specific
number of years, provided that in no event may the number of years be less than
three (3).  Alternatively, the
Participant may elect a Deferral Period which ends on (a) his or her separation
from service as an employee or director, (b) the date which is thirteen (13)
months after such separation from service, or (c) the earlier of such separation
from service (or the date which is thirteen (13) months after such separation
from service) or a specified number of years pursuant to the preceding
sentence.  A Participant may elect a
different Deferral Period for each Year’s Deferral Amount or for any specified
portion of any Year’s Deferral Amounts, except that, unless the Committee (or
the Chief Executive Officer in respect of all Participants) otherwise directs,
the Deferral Period referred to in clause (c) of the preceding sentence may
only be elected by a Participant if so elected for all Deferral Amounts of such
Participant.  A Participant may elect to
extend, but not 

 

8

 

shorten,
a previously elected Deferral Period at any time at least 12 months before the
end of such previously elected Deferral Period by the execution of a valid
Deferred Compensation Plan Election Change Form, timely filed with the Company;
provided that a Deferral Period extension must be a minimum of five years.  If such previously elected Deferral Period
ended upon separation from service as an employee or director, then a Deferred
Compensation Plan Election Change Form shall only be effective in respect of
Deferral Amounts that would not otherwise have been distributed at least 12
months after the filing of such Form. 
Notwithstanding the foregoing, any Deferral Period for a Specified
Employee that purports to end upon the separation from service of such
Specified Employee shall in no event expire earlier than the date which is six
months after the date of such employee’s separation from service (or, if
earlier, date of death).  Section 409A of
the Code, as interpreted by the Committee in its sole discretion for exclusion
from gross income of amounts deferred under the Plan, shall govern
applicability of the foregoing provisions to participants who become Specified
Employees or cease to be Specified Employees during the course of any Deferral
Period.

 

4.7           Each
deferral election also must specify the payment option that will apply for the
Deferral Amount, or any portion thereof, for that Year, and earnings credited
on that amount.  The normal form of
payment shall be a lump sum payment.  A
Participant may elect that the distribution be made in installments payable
over a specified number of years, not longer than 15 years; provided, however,
that in no event may installment payments be elected over a number of years
that is more than the Participant’s life expectancy or the life expectancy of
the designated primary Beneficiary, whichever is greater.  If a Participant elects the installment
payment option, the Participant also must elect whether installments should be
made annually, quarterly or, if the Committee (or the Chief Executive Officer
in respect of all Participants) shall direct to offer such 

 

9

 

alternative,
monthly.  Different payment options may
be elected with respect to the Deferral Amount, or any portion thereof, for
each Year, and earnings credited on such amount.

 

4.8           Anything in Section 4.6 or 4.7 to the
contrary notwithstanding (except as provided in Section 4.6 in respect of a
Participant who is a Specified Employee), on his or her Deferred Compensation
Plan Election Form, the Participant may elect that in the event of his or her
death or (except as provided in Section 4.6 in respect of a Participant who is
a Specified Employee) Disability any Deferral Period or form of distribution
election otherwise applicable to a Deferral Amount is nullified and: (i)
distribution shall be made after the date of death or (except as provided in
Section 4.6 in respect of a Participant who is a Specified Employee) Disability;
and (ii) distribution of his or her entire Account, or of any Deferral Amount,
shall be made either in a lump sum or in installments payable over a specified
number of years, not longer than 15. 
Unless otherwise elected pursuant to the preceding sentence, in the
event of the Participant’s death or (except as provided in Section 4.6 in
respect of a Participant who is a Specified Employee) Disability, payment of a
Participant’s Account shall be made in the form of a lump sum as soon as
administratively practicable following the date of death or (except as provided
in Section 4.6 in respect of a Participant who is a Specified Employee) Disability.

 

ARTICLE V

CREDITING OF DEFERRAL AMOUNTS AND

ACCRUAL OF INVESTMENT GAINS OR LOSSES

 

5.1           All Deferral Amounts will be withheld
from the electing Participant’s Compensation and credited on the Company’s
books in the Account maintained in such Participant’s name.

 

10

 

5.2           Each month, the balance of each
Participant’s Account shall be credited with earnings or investment gains and
losses as provided below.  The Committee
may establish procedures permitting Participants to designate one or more
investment benchmarks specified by the Chief Executive Officer or the Committee
for the purpose of determining the earnings or investment gains and losses to
be credited or debited to a Participant’s Account.  Investment benchmarks so specified may be
made available to all Participants or selected Participants as the Chief
Executive Officer or the Committee may designate.  The Committee shall have the sole discretion
to make such rules as it deems desirable with respect to the administration of
any such investment benchmark procedures, including rules permitting the
Participant to change the designation of investment benchmarks to be used to
measure the value of the Account.  The
Committee, however, retains the discretion at any time to change the investment
benchmarks available to Participants, including any investment benchmarks
previously specified by the Chief Executive Officer, or to discontinue the
investment benchmark procedure.  If the
Committee fails to implement an investment benchmark procedure or discontinues
such procedure, the Participant’s Account shall be credited with earnings at a
rate determined by the Committee in its sole discretion, utilizing whatever
factors or indicia it deems appropriate; provided, however, that the rate of
return on a Participant’s Account in such circumstances shall not be less than
the JP Morgan Chase Bank prime rate plus one percent per annum.  If the Participant fails to designate
properly an investment benchmark, the Participant’s Account shall be credited
with earnings at a rate determined by the Committee in its sole discretion,
utilizing whatever factors or indicia it deems appropriate; provided, however,
that the rate of return on a Participant’s Account in such circumstances shall
not be less than the “money market account” benchmark available to Participants
at the time or, if no such benchmark shall be available, then not less than the
rate of interest on 90-day treasury bills for the applicable period as
determined by the

 

11

 

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

 

ARTICLE VI

COMMENCEMENT OF BENEFITS

 

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

 

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

 

6.3           Notwithstanding any other provision
of the Plan to the contrary, the Committee, in its sole discretion, shall have
the right, but shall not be required, to distribute all or any portion of a
Participant’s benefits under the Plan in the form of any investment or security
chosen by the 

 

12

 

Participant at any time
as an investment benchmark for measuring the value of his or her Account
pursuant to Section 5.2 of the Plan.

 

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

 

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

 

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

 

ARTICLE VII

BENEFICIARY DESIGNATION

 

                The Participant
may, at any time, designate a Beneficiary or Beneficiaries to receive the
benefits payable in the event of his or her death (and may designate a
successor Beneficiary or Beneficiaries to receive any benefits payable in the
event of the death of any other Beneficiary). 
Each Beneficiary designation shall become effective only when filed in
writing with the Company during the Participant’s lifetime on a form prescribed
or accepted by the Company (a “Beneficiary Designation Form”).  The filing of a new Beneficiary Designation
Form will cancel any Beneficiary 

 

13

 

Designation Form previously filed. 
If no Beneficiary shall be designated by the Participant, or if the
designated Beneficiary or Beneficiaries shall not survive the Participant,
payment of the Participant’s Account shall be made to the Participant’s
estate.  If a Participant designated that
payments be made in installments and did not designate a successor Beneficiary,
the Beneficiary of such Participant may submit a Beneficiary Designation Form
in respect of himself or herself and the provisions of the Plan shall apply to
such Beneficiary as if the Beneficiary were the Participant hereunder.

 

ARTICLE VIII

MAINTENANCE AND VALUATION OF ACCOUNTS

 

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

 

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

 

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

 

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ARTICLE IX

FUNDING

 

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

 

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

 

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

 

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ARTICLE X

AMENDMENT AND TERMINATION

 

10.1         The Board, or its duly authorized
delegates, may at any time amend the Plan in whole or in part; provided,
however, that no amendment shall be effective to decrease the accrued benefits
or rights of any Participant under the Plan except to the extent necessary or
desirable to comply with the requirements of Section 409A of the Code as
interpreted by the Committee in its sole discretion for the exclusion from
gross income of amounts deferred under the Plan.  Written notice of any such amendment shall be
given to each Participant.

 

10.2         The Board may at any time terminate the
Plan; provided, however, that such termination shall not decrease the accrued
benefits or rights of any Participant under the Plan.  Upon any termination of the Plan under this
Section 10.2, each Participant shall cease to make deferrals under the Plan,
and all amounts shall prospectively cease to be deferred for the balance of
such Year.  Accounts shall be maintained
and distributed pursuant to such terms, at such times and upon such conditions
as were effective immediately prior to the termination of the Plan; provided,
however, that the Committee, in its discretion, may direct that all benefits
payable under the Plan be distributed in the form of a lump sum distribution
following the Plan’s termination to the extent permitted by Section 409A of the
Code as interpreted by the Committee for exclusion from gross income of amounts
deferred under the Plan.

 

ARTICLE XI

FINANCIAL HARDSHIP WITHDRAWALS

 

11.1         Subject to the provisions set forth
herein, a Participant may withdraw up to 100% (one hundred percent) of his or
her Account balance as necessary to satisfy immediate and heavy financial needs
of the Participant which the Participant is unable to meet from any other
resource 

 

16

 

reasonably
available to the Participant due to the occurrence of an Unforeseen Emergency.  The amount of such hardship withdrawal may
not exceed the amount required to meet such need plus taxes reasonably
anticipated as a result of distribution, after taking into account the extent
to which such hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the Participant’s
assets (to the extent the liquidation of such assets would not itself cause
severe financial hardship).  The
Participant shall be required to furnish evidence of qualification for a
financial hardship withdrawal to the Committee on forms prescribed by or acceptable
to the Company.

 

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

 

11.3         Notwithstanding any other provision of
the Plan to the contrary, upon written application of a Participant, the
Committee may, in the case of financial hardship, authorize the cessation of
deferrals by such Participant to the extent permitted by Section 409A of the
Code as interpreted by the Committee for exclusion from gross income of amounts
deferred under the Plan.

 

ARTICLE XII

ADMINISTRATION

 

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

 

12.2         The Committee shall have general charge
of the administration of the Plan and shall have full power and authority to
make its determinations effective.  All
decisions of the 

 

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

 

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

 

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

 

18

 

ARTICLE XIII

GENERAL PROVISIONS

 

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

 

13.2         No
interest of any Participant or Beneficiary hereunder shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment by creditors of the Participant or the
Participant’s Beneficiary. 
Notwithstanding the foregoing, pursuant to rules comparable to those
applicable to qualified domestic relations orders, as determined by the
Committee, the Committee may direct a distribution prior to any distribution
date otherwise described in the Plan, to an alternate payee (as defined under
the rules applicable to qualified domestic relations orders) to the extent
permitted by Section 409A of the Code as interpreted by the Committee for
exclusion from gross income of amounts deferred under the Plan.

 

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

 

19

 

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

 

13.5         Should any provision of the Plan or any
rule or procedure thereunder be deemed or held to be unlawful or invalid for
any reason, such fact shall not adversely affect the other provisions of the
Plan, or any rule or procedure thereunder, unless such invalidity shall render
impossible or impractical the functioning of the Plan, and, in such case, the
appropriate parties shall immediately adopt a new provision or rule or
procedure to take the place of the one held illegal or invalid.

 

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

 

20

 

is
resolved in favor of the Participant, Beneficiary or other person asserting a
claim under the Plan, such person’s cost of the arbitration and the fees of the
American Arbitration Association shall be paid by the Company.

 

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

 

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

 

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

 

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

 

21Exhibit 10.2

 

FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.

 

1995 DEFERRED COMPENSATION PLAN

 

 

Amended and Restated

 

as of December 17, 2004

 

 

TABLE OF
CONTENTS

 

 

	
  ARTICLE I

  	
  ESTABLISHMENT AND
  PURPOSE OF THE PLAN

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  PARTICIPATION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  DEFERRAL ELECTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  CREDITING OF
  DEFERRAL AMOUNTS AND ACCRUAL OF INVESTMENT GAINS OR LOSSES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  COMMENCEMENT OF
  BENEFITS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  BENEFICIARY
  DESIGNATION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  	
  MAINTENANCE
  AND VALUATION OF ACCOUNTS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  FUNDING

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  AMENDMENT AND
  TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  FINANCIAL HARDSHIP
  WITHDRAWALS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  ADMINISTRATION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XIII

  	
  GENERAL
  PROVISIONS

  	
   

  

 

 

FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD.

1995 DEFERRED COMPENSATION PLAN

 

 

ARTICLE I

ESTABLISHMENT AND PURPOSE OF THE PLAN

 

1.1                                                                                 Effective
as of June 1, 1995, Financial Security Assurance Holdings Ltd. (the “Company”) established
for the benefit of certain of its employees, certain employees of its
affiliates or subsidiaries and certain members of its board of directors an
unfunded plan by which an eligible employee or eligible director can elect to
defer, respectively, receipt of all or a portion of his or her compensation or
fees.  This plan was amended and restated
as of July 10, 2002, November 14, 2002, May 16, 2003, November 13, 2003 and
December 17, 2004.  This plan, as so
amended and restated, is known as the Financial Security Assurance Holdings
Ltd. 1995 Deferred Compensation Plan (the “Plan”).  On December 17, 2004, the Company established
a new deferred compensation plan, serving the same purposes as the Plan,
pursuant to which eligible participants can elect to defer, respectively,
receipt of all or a portion of their compensation or fees earned or vested on
or after January 1, 2005.  This new plan,
as amended from time to time, is known as the Financial Security Assurance
Holdings Ltd. 2004 Deferred Compensation Plan (the “New Plan”).

 

ARTICLE II

DEFINITIONS

 

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

 

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

 

1

 

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

 

2.3                                 The
term “Board” shall mean the Board of Directors of the Company.

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.16.                        The
term “New Plan” shall mean the Financial Security Assurance Holdings Ltd. 

 

3

 

2004
Deferred Compensation Plan, as amended from time to time.

 

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

 

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

 

2.19                           The
term “Plan” shall mean the Financial Security Assurance Holdings Ltd. 1995 Deferred
Compensation Plan, as set forth herein and as amended from time to time.

 

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

 

ARTICLE III

PARTICIPATION

 

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

 

3.2                                 Subject
to Section 3.4, an Eligible Employee or Eligible Director shall become a Participant
in the Plan as of the date a Deferral Amount is credited to his or her Account
and shall remain a Participant until the complete distribution of the
Participant’s Account, subject to Article VII hereof.

 

4

 

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

 

3.4                                 Notwithstanding
anything in the Plan to the contrary, no Deferral Amount may be elected by any
Eligible Director or Eligible Employee if such Deferral Amount would be subject
to current income taxes in any jurisdiction notwithstanding any deferral of
such Compensation under the Plan.  To the
extent that, due to a change in law or administrative oversight, a Deferral
Amount is credited and would be subject to taxes as aforesaid, the Company
shall distribute such Compensation, adjusted for gains or losses in accordance
with Article V of the Plan, to the Participant in the form of a lump sum
distribution promptly following confirmation by the Committee of such change in
law or administrative oversight. 
Notwithstanding the foregoing, any deferrals under the Plan of cash
Bonuses earned in 2004 but vested in 2005 shall be deemed to have been deferred
under the New Plan rather than under the Plan to the extent that such deferral
is subject to the requirements of Section 409A of the Internal Revenue Code of
1986, as amended, for exclusion of such Deferral Amounts from the gross income
of the Participants and to the extent that deferral of such amounts under the
New Plan accomplishes exclusion of such Deferred Amounts from the gross income
of the Participants.

 

ARTICLE IV

DEFERRAL ELECTIONS

 

4.1                                 Except
with respect to the initial Year, in December of each Year through and
including December 2003, each Eligible Director then serving and each Eligible
Employee then 

 

5

 

employed at a Participating Company shall have the
right to determine his or her Deferral Amount for the next Year, subject to the
limitations set forth in this Article IV. 
With respect to the initial Year, the election of a Deferral Amount by
an Eligible Employee, or by an Eligible Director, can be made within thirty
days after the effective date of the Plan but only with respect to Compensation
for services rendered subsequent to the election.  With respect to any individual who becomes an
Eligible Employee or Eligible Director on or after January 1 but before March 1
in any Year through and including 2004, the election of a Deferral Amount can
be made within thirty days of becoming an Eligible Employee or Eligible
Director but only with respect to Compensation for services rendered subsequent
to the election.  Subject to Section 4.3,
such Deferral Amount shall reduce the amount that is to be paid to the
Participant for the Year of reference. 
With respect to an Eligible Employee, a separate election for a Year may
be made with respect to salary payable in that Year and with respect to a Bonus
payable for that Year, including a separate election with respect to any amount
payable in respect of “Performance Shares” or “Equity Bonuses”, or any other
component of Bonus, as the case may be, awarded pursuant to the Equity
Participation Plan.  Prior to the commencement
of any Year, the Chief Executive Officer or the Committee may provide, by
notice to Eligible Employees, that salary or other specified components of
compensation do not qualify for deferral under the Plan for that Year.

 

4.2                                 An
Eligible Employee or Eligible Director who does not elect a Deferral Amount in
December of any Year (or on or prior to June 30, 1995 with respect to the
initial Year) will not be permitted to make such an election until the
following December, effective for the following Year; provided that any
individual who becomes an Eligible Employee or Eligible Director on or after
January 1 but before March 1 in any year may elect a Deferral Amount within
thirty days of 

 

6

 

becoming an Eligible Employee or Eligible Director but
only with respect to Compensation for services rendered subsequent to the
election.

 

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

 

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

 

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

 

4.6                                 An
election with respect to a Deferral Amount for a Year must specify the Deferral
Period applicable to that Deferral Amount. 
With respect to a Deferral Amount for any Year, the Participant may
elect a Deferral Period of a specific number of years, provided that in no
event may the number of years be less than three (3).  Alternatively, the Participant may elect a
Deferral Period which ends on (a) his or her termination of employment or
directorship, as the case may be, (b) the date which is thirteen (13) months
after such termination, or (c) the earlier of such termination (or the date
which is thirteen (13) months after such termination) or a specified number of
years pursuant to the preceding sentence. 
A Participant may elect a different Deferral Period for each Year’s
Deferral Amount or for any specified portion of any Year’s 

 

7

 

Deferral Amounts, except that, unless the Committee
(or the Chief Executive Officer in respect of all Participants) otherwise
directs, the Deferral Period referred to in clause (c) of the preceding
sentence may only be elected by a Participant if so elected for all Deferral
Amounts of such Participant.  A
Participant may elect to extend, but not shorten, a previously elected Deferral
Period at any time at least 12 months before the end of such previously elected
Deferral Period by the execution of a valid Deferred Compensation Plan Election
Change Form, timely filed with the Company. 
If such previously elected Deferral Period ended upon termination of
employment or directorship, then a Deferred Compensation Plan Election Change
Form shall only be effective in respect of Deferral Amounts that would not
otherwise have been distributed at least 12 months after the filing of such
Form.

 

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

 

8

 

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

 

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

 

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

 

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

 

4.8                                 Anything
in Section 4.6 or 4.7 to the contrary notwithstanding, on his or her Deferred
Compensation Plan Election Form the Participant may elect that in the event of
his or her death or Disability any Deferral Period or form of distribution
election otherwise applicable to a Deferral Amount is nullified and: (i)
distribution shall be made after the date of Disability or death; and (ii)
distribution of his or her entire Account, or of any Deferral Amount, shall be
made either in a lump sum or in installments payable over a specified number of
years, not longer than 15.  Unless
otherwise elected pursuant to the preceding sentence, in the event of the
Participant’s death or Disability, payment of a Participant’s Account shall be
made in the form of a lump sum 

 

9

 

as soon as
administratively practicable following the date of death or Disability.   Any election made pursuant to this Section
4.8 may be changed at any time prior to death or Disability by the execution of
a valid Deferred Compensation Plan Election Change Form, timely filed with the
Company.

 

ARTICLE V

CREDITING OF DEFERRAL AMOUNTS AND

ACCRUAL OF INVESTMENT GAINS OR LOSSES

 

5.1                                 All
Deferral Amounts will be withheld from the electing Participant’s Compensation
and credited on the Company’s books in the Account maintained in such
Participant’s name.

 

5.2                                 Each
month, the balance of each Participant’s Account shall be credited with
earnings or investment gains and losses as provided below.  The Committee may establish procedures
permitting Participants to designate one or more investment benchmarks
specified by the Chief Executive Officer or the Committee for the purpose of
determining the earnings or investment gains and losses to be credited or
debited to a Participant’s Account. 
Investment benchmarks so specified may be made available to all
Participants or selected Participants as the Chief Executive Officer or the
Committee may designate.  The Committee
shall have the sole discretion to make such rules as it deems desirable with
respect to the administration of any such investment benchmark procedures,
including rules permitting the Participant to change the designation of
investment benchmarks to be used to measure the value of the Account.  The Committee, however, retains the
discretion at any time to change the investment benchmarks available to
Participants, including any investment benchmarks previously specified by the
Chief Executive Officer, or to discontinue the investment benchmark procedure.  If the Committee fails 

 

10

 

to implement an investment benchmark procedure or discontinues such
procedure, the Participant’s Account shall be credited with earnings at a rate
determined by the Committee in its sole discretion, utilizing whatever factors
or indicia it deems appropriate; provided, however, that the rate of return on
a Participant’s Account in such circumstances shall not be less than the JP
Morgan Chase Bank prime rate plus one percent per annum.  If the Participant fails to designate
properly an investment benchmark, the Participant’s Account shall be credited
with earnings at a rate determined by the Committee in its sole discretion,
utilizing whatever factors or indicia it deems appropriate; provided, however,
that the rate of return on a Participant’s Account in such circumstances shall
not be less than the “money market account” benchmark available to Participants
at the time or, if no such benchmark shall be available, then not less than the
rate of interest on 90-day treasury bills for the applicable period as
determined by the Committee.  Nothing in
this Article V or in the Committee’s rules shall give a Participant the right
to require the Company or a Participating Company to acquire any asset for the
Account of the Participant, and if the Company or a Participating Company
acquires any asset, or causes a trustee on its behalf to acquire any asset, to
permit it to satisfy its obligations to pay the Participant’s Deferral Amount,
the Participant shall have no right or interest in any such asset, which shall
be held by the Company or the Participating Company subject to the rights of
all unsecured creditors of the Company or the Participating Company.  The rights of the Participant with respect to
any designation of one or more investment benchmarks for measuring the value of
any Account hereunder shall be expressly subject to the provisions of Article
IX of the Plan.

 

11

 

ARTICLE VI

COMMENCEMENT OF BENEFITS

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

ARTICLE VII

BENEFICIARY DESIGNATION

 

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

 

ARTICLE VIII

MAINTENANCE AND VALUATION OF ACCOUNTS

 

8.1                                 The
Company shall establish and maintain a separate bookkeeping Account on behalf
of each Participant.  The value of an
Account as of any date shall equal the Participant’s 

 

13

 

Deferral Amounts theretofore credited to such Account
plus the earnings and investment gains and losses credited to such Account in
accordance with Article V of the Plan through the day preceding such date
and less all payments made by the Company to the Participant or his or her
Beneficiary or Beneficiaries through the day preceding such date.

 

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

 

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

 

ARTICLE IX

FUNDING

 

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

 

9.2                           Notwithstanding
anything in the Plan to the contrary, Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights, interest
or claims in any specific property or assets of the Company or any other
Participating Company, 

 

14

 

nor shall they be beneficiaries of, or have any
rights, claims or interests in, any funds, securities, life insurance policies,
annuity contracts, or the proceeds therefrom, owned or which may be acquired by
the Company.  Such funds, securities,
policies or other assets shall not be held in any way as collateral security
for the fulfillment of the obligations under the Plan.  Any and all of such assets shall be, and
remain, for purposes of the Plan, the general unpledged, unrestricted assets of
the Company or Participating Company, as the case may be.

 

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

 

ARTICLE X

AMENDMENT AND TERMINATION

 

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

 

10.2                           The
Board may at any time terminate the Plan; provided, however, that such
termination shall not decrease the accrued benefits or rights of any
Participant under the Plan.  Upon any
termination of the Plan under this Section 10.2, each Participant shall cease
to make deferrals under the Plan, and all amounts shall prospectively cease to
be deferred for the balance of such Year. 
Accounts shall be maintained and distributed pursuant to such terms, at
such times 

 

15

 

and upon such conditions as were effective immediately
prior to the termination of the Plan; provided, however, that the Committee, in
its discretion, may direct that all benefits payable under the Plan be
distributed in the form of a lump sum distribution following the Plan’s
termination.

 

ARTICLE XI

FINANCIAL HARDSHIP WITHDRAWALS

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

ARTICLE XII

ADMINISTRATION

 

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

 

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

 

12.3                           In
addition to all other powers vested in it by the Plan, the Committee shall have
power to interpret the Plan, to establish and revise rules and regulations
relating to the Plan and

 

17

 

to make any other determinations that it believes
necessary or advisable for the administration of the Plan, including rules
restricting the availability to some or all Participants of deferral period
alternatives, investment benchmarks, or distribution alternatives otherwise
available under the Plan.  The Committee
shall have absolute discretion and all decisions made by the Committee pursuant
to the exercise of its authority (including, without limitation, any interpretation
of the Plan) shall be final and binding, in the absence of arbitrary or
capricious action, on all persons and shall be accorded the maximum deference
permitted by law.

 

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

 

ARTICLE XIII

GENERAL PROVISIONS

 

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

 

18

 

13.2                           No
interest of any Participant or Beneficiary hereunder shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment by creditors of the Participant or the
Participant’s Beneficiary. 
Notwithstanding the foregoing, pursuant to rules comparable to those
applicable to qualified domestic relations orders, as determined by the
Committee, the Committee may direct a distribution prior to any distribution
date otherwise described in the Plan, to an alternate payee (as defined under
the rules applicable to qualified domestic relations orders).

 

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

 

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

 

13.5                           Should
any provision of the Plan or any rule or procedure thereunder be deemed or held
to be unlawful or invalid for any reason, such fact shall not adversely affect
the other provisions of the Plan, or any rule or procedure thereunder, unless
such invalidity shall render impossible or impractical the functioning of the
Plan, and, in such case, the appropriate parties shall immediately adopt a new
provision or rule or procedure to take the place of the one held illegal or
invalid.

 

13.6                           Any
dispute, controversy or claim between the Company and any Participant,
Beneficiary or other person arising out of or relating to the Plan shall be
settled by arbitration 

 

19

 

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

 

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

 

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

 

20

 

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

 

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

 

21

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