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Exhibit 10.6    
    

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.  

DEFERRED COMPENSATION PLAN  

Amended and Restated

as of November 13, 2003  

TABLE OF CONTENTS  

	 
	 	 
	 	Page

	ARTICLE I	 	ESTABLISHMENT AND PURPOSE OF THE PLAN	 	1
	

ARTICLE II	
 	

DEFINITIONS	
 	

1
	

ARTICLE III	
 	

PARTICIPATION	
 	

2
	

ARTICLE IV	
 	

DEFERRAL ELECTIONS	
 	

3
	

ARTICLE V	
 	

CREDITING OF DEFERRAL AMOUNTS AND ACCRUAL OF INVESTMENT GAINS OR LOSSES	
 	

5
	

ARTICLE VI	
 	

COMMENCEMENT OF BENEFITS	
 	

5
	

ARTICLE VII	
 	

BENEFICIARY DESIGNATION	
 	

7
	

ARTICLE VIII	
 	

MAINTENANCE AND VALUATION OF ACCOUNTS	
 	

7
	

ARTICLE IX	
 	

FUNDING	
 	

7
	

ARTICLE X	
 	

AMENDMENT AND TERMINATION	
 	

8
	

ARTICLE XI	
 	

FINANCIAL HARDSHIP WITHDRAWALS	
 	

8
	

ARTICLE XII	
 	

ADMINISTRATION	
 	

9
	

ARTICLE XIII	
 	

GENERAL PROVISIONS	
 	

9

   FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.

DEFERRED COMPENSATION PLAN  

ARTICLE I

ESTABLISHMENT AND PURPOSE OF THE PLAN  

        1.1    Effective
as of June 1, 1995, Financial Security Assurance Holdings Ltd. established for the benefit of certain of its employees, certain employees of its
affiliates or subsidiaries and certain members of its board of directors an unfunded plan by which an eligible employee or eligible director can elect to defer, respectively, receipt of all or a
portion of his or her compensation or fees. This plan was amended and restated as of July 10, 2002, November 14, 2002, May 16, 2003 and November 13, 2003. This plan, as so
amended and restated, is known as the Financial Security Assurance Holdings Ltd. Deferred Compensation Plan. 

ARTICLE II

DEFINITIONS  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE III

PARTICIPATION  

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

        3.2    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 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 

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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. 

ARTICLE IV

DEFERRAL ELECTIONS  

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

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

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

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

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

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

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this
Section 4.8 may be changed at any time prior to death or Disability by the execution of a valid Deferred Compensation Plan Election Change Form, timely filed with the Company. 

ARTICLE V

CREDITING OF DEFERRAL AMOUNTS AND

ACCRUAL OF INVESTMENT GAINS OR LOSSES  

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

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

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. 

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

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

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

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

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

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

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

ARTICLE IX

FUNDING  

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

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

7

 

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

ARTICLE XI

FINANCIAL HARDSHIP WITHDRAWALS  

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

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

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

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

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

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

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

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        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 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. 

        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). 

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

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

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

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

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

10

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Exhibit 10.7    
    

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.

SEVERANCE POLICY FOR SENIOR MANAGEMENT

(As Amended and Restated Effective November 13, 2003)  

TABLE OF CONTENTS  

	 
	 	 
	 	PAGE

	SECTION 1.	 	ESTABLISHMENT AND PURPOSE OF THE PLAN	 	1
	

SECTION 2.	
 	

ELIGIBLE EMPLOYEES	
 	

1
	

SECTION 3.	
 	

SEVERANCE PAY AND SEVERANCE BENEFITS	
 	

2
	

SECTION 4.	
 	

OFFSET	
 	

4
	

SECTION 5.	
 	

PAYMENT OF SEVERANCE PAY	
 	

4
	

SECTION 6.	
 	

REINSTATEMENT	
 	

4
	

SECTION 7.	
 	

WAIVER AND RELEASE AGREEMENT	
 	

5
	

SECTION 8.	
 	

PLAN ADMINISTRATION	
 	

5
	

SECTION 9.	
 	

AMENDMENT/TERMINATION/VESTING	
 	

5
	

SECTION 10.	
 	

PAY AND OTHER BENEFITS	
 	

6
	

SECTION 11.	
 	

NO ASSIGNMENT	
 	

6
	

SECTION 12.	
 	

RECOVERY OF PAYMENTS MADE BY MISTAKE	
 	

6
	

SECTION 13.	
 	

REPRESENTATIONS CONTRARY TO THE PLAN	
 	

6
	

SECTION 14.	
 	

NO EMPLOYMENT RIGHTS	
 	

7
	

SECTION 15.	
 	

COMPANY INFORMATION	
 	

7
	

SECTION 16.	
 	

CONFIDENTIALITY	
 	

7
	

SECTION 17.	
 	

PLAN FUNDING	
 	

7
	

SECTION 18.	
 	

APPLICABLE LAW	
 	

7
	

SECTION 19.	
 	

SEVERABILITY	
 	

8
	

SECTION 20.	
 	

PLAN YEAR	
 	

8
	

SECTION 21.	
 	

RETURN OF COMPANY PROPERTY	
 	

8

  

 
 

Exhibit 10.7    
    

FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.

SEVERANCE POLICY FOR SENIOR MANAGEMENT  

SECTION 1    ESTABLISHMENT AND PURPOSE OF THE PLAN  

        FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. (hereinafter "FSA") has adopted the  FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. SEVERANCE
POLICY FOR SENIOR MANAGEMENT (hereinafter the
"Plan"), for the benefit of the Senior Management (as hereinafter defined) of FSA and its current direct and indirect wholly-owned subsidiaries
(collectively referred to herein as the "Company"), as described herein. The Plan was adopted effective as of February 8, 1995, and was amended
and restated effective March 13, 2000 and May 17, 2001. The Plan is hereby amended and restated, as set forth in this Plan document, effective November 13, 2003, to require
cooperation in defending or pursuing litigation as a term to the waiver and release agreement required to be signed as a condition to receiving benefits under the Plan. The Plan is an unfunded welfare
benefit plan for purposes of the Employee Retirement Income Security Act of 1974, as amended (hereinafter "ERISA") and a severance pay plan within the
meaning of the United States Department of Labor regulations section 2510.3-2(b). The purpose of the Plan is to provide an eligible employee whose employment terminates as described
in Section 2 with Severance Pay and Severance Benefits for a specified period of time. 

SECTION 2    ELIGIBLE EMPLOYEES  

        Members of Senior Management who have been employed with the Company for at least one (1) year and whose employment is (i) terminated by the Company
for any reason other than for cause or (ii) constructively terminated, are eligible to participate in the Plan and shall be considered "eligible
employees" under the Plan. "Senior Management" means, and shall be limited to, the permanent members of the Management Committee
of the Company on the effective date of the Plan and any person who shall hereafter be designated as eligible to participate in the Plan by written notice thereof, signed by the President of the
Company and expressly stating that such person is a member of "Senior Management" for purposes of the Plan. The permanent members of the Management Committee of the Company on the effective date of
the Plan, as amended and restated, are (a) the Chief Executive Officer of the Company, (b) the Chief Operating Officer of the Company, (c) the General Counsel of the Company,
(d) the Chief Financial Officer of the Company, (e) the Managing Director in charge of the Asset Finance Group of Financial Security Assurance Inc., and (f) the Chief Risk
Management Officer of Financial Security Assurance Inc.. Termination "for cause" means termination for unethical practices, illegal conduct or
gross insubordination, but specifically excludes termination as a result of substandard performance. "Constructive termination" of employment occurs if
an eligible employee's compensation opportunity is significantly reduced out of line with Company results, or if there is a material reduction in responsibilities. The determination as to whether an
employee has been (i) terminated for cause, or (ii) constructively terminated, will be made by the Plan Administrator, in its sole discretion. 

        An
otherwise eligible employee shall not be eligible for Severance Pay and Severance Benefits under the Plan if: 

	(a)
	the
eligible employee's employment with the Company terminates by reason of death or disability;

	(b)
	the
eligible employee's employment with the Company terminates through retirement, voluntary resignation, job abandonment or failure to report for work; 

1

 

	(c)
	the
eligible employee's employment with the Company is involuntarily terminated after the eligible employee refuses a transfer to a new position at the same geographical location of
the Company, and such transfer does not constitute a constructive termination;

	(d)
	the
eligible employee is employed in a Company operation or facility substantially all of the assets of which are sold and the eligible employee is offered a comparable position, as
determined by the Plan Administrator, with the purchaser;

	(e)
	the
eligible employee fails or refuses to continue in the employment of the Company until the end of the notice period provided for in the notice of termination described in
Section 3 below (absent constructive termination during such notice period); or

	(f)
	the
Plan is terminated. 

SECTION 3    SEVERANCE PAY AND SEVERANCE BENEFITS  

        In exchange for providing the Plan Administrator a valid Waiver and Release Agreement in a form acceptable to the Company, an eligible employee shall be eligible
to receive Severance Pay and Severance Benefits in accordance with the paragraphs set forth below. The consideration for the voluntary Waiver and Release Agreement shall be the Severance Pay and the
Severance Benefits that the eligible employee would not otherwise be eligible to receive. 

	(a)
	Severance Pay.  An eligible employee shall be eligible to receive Severance Pay in accordance with the following:

	(1)
	Chief Executive Officer and Chief Operating Officer:  Each eligible employee who served as the Chief Executive Officer or
the Chief Operating Officer of the Company shall be eligible to receive eighteen (18) months of pay.

	(2)
	Permanent Members of Management Committee: Each eligible employee who served as a permanent member of the Management Committee of the
Company (and who did not serve as the Chief Executive Officer or the Chief Operating Officer of the Company) shall be eligible to receive twelve (12) months of pay. 

        For
purposes of determining the amount of Severance Pay to which an eligible employee is entitled, "months of pay" (a) shall be
determined on the basis of (a) the eligible employee's monthly salary on his or her separation date and (b) shall include the eligible employee's most recent bonus (or three year
average, if higher), with one-twelfth (1/12th) of such bonus amount being allocated to each month of pay. An eligible employee's base salary and bonus shall include amounts deferred under
the Financial Security Assurance Holdings Ltd. Deferred Compensation Plan and the Financial Security Assurance Inc. Cash or Deferred Plan, and amounts allocated to the Financial Security
Assurance Flex Plan. For this purpose, "bonus" shall also include any amounts converted into an equity bonus under the Financial Security Assurance
Holdings Ltd. 1993 Equity Participation Plan. For all purposes of the Plan, the term "separation date" shall mean the last day the eligible
employee is actively employed by the Company. In the event an eligible employee receives formal written notice of a future termination of employment and employment is not terminated until the date
provided in such notice, then the Plan Administrator may, in its discretion, reduce the period of Severance Pay by the length of the notice period, in an amount of up to one-third (1/3) of
the severance period. For purposes of the Plan, "severance period" shall mean the period of time over which an eligible employee is to receive Severance
Pay pursuant to this Section 3. 

	(b)
	Severance Benefits.

	(1)
	Continuation of Hospital, Medical, Dental, Prescription Drug and Vision Coverages.    An eligible employee may elect
continuation of his or her Company sponsored hospital, 

2

 

medical,
dental, prescription drug and vision benefits ("health benefits") under COBRA, as defined in Section 4980B(f)(2) of the Internal Revenue
Code of 1986, as amended ("COBRA coverage") for a period of up to eighteen (18) months following the separation date. The eligible employee shall
pay the same premium paid by active employees for their Company sponsored health benefits and the Company shall pay the remaining portion of the premium during the severance period. The COBRA coverage
provided at this reduced cost shall continue until the end of the month for which the eligible employee is permitted to pay the same premium paid by similarly situated active employees for their
Company sponsored health benefits. After the end of the severance period, the eligible employee may elect to continue his or her health benefits under COBRA for up to the remainder of the eighteen
(18) months; however, the eligible employee must pay the full premium for such coverage plus a two percent (2%) administrative charge, or 102% of the total premium cost. If the eligible
employee dies prior to the end of the period of time that he or she would have received his or her Severance Benefits, and if the eligible employee's spouse and/or dependents are entitled to continued
COBRA coverage, the Company shall pay the entire cost of such coverage for the remainder of the severance period. Thereafter, the spouse and/or dependents may elect to continue COBRA coverage; however
they must pay the full premium cost for such coverage plus a two percent (2%) administrative charge. 

	(2)
	Life Insurance Benefits.    Coverage under the Financial Security Assurance Inc. Life and AD & D Insurance Plan
shall continue on the same basis as for similarly situated active employees during the severance period to the extent, if any, that the insurance carrier will so allow.

	(3)
	Disability Insurance Coverage.    Coverage under Company sponsored disability insurance shall continue on the same basis as
for similarly situated active employees during the severance period to the extent, if any, that the insurance carrier will so allow.

	(c)
	Certain Additional Payments by the Company.

	(1)
	Gross-Up Payments.    Anything in the Plan to the contrary notwithstanding, in the event that it shall be
determined that any payment or distribution by the Company to or for the benefit of an eligible employee (whether paid or payable or distributed or distributable pursuant to the terms of the Plan or
otherwise) (a "Payment") would be subject to the excise tax imposed by Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), or that any interest or penalties are incurred by an eligible employee with respect to such excise tax (such excise tax, together with any such
interest and penalties, being hereinafter collectively referred to as the "Excise Tax"), then the eligible employee shall be entitled to receive an
additional payment (the "Gross-Up Payment") in an amount such that after payment by the eligible employee of all taxes (including any
interest or penalties imposed with respect to such taxes and Excise Tax) imposed upon the Gross-Up Payment, the eligible employee retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.

	(2)
	Determination of Gross-Up Payments.    Notwithstanding the provisions of Section 8, all determinations
required to be made under this Section 3(c), including whether and when the Gross-Up Payment is required and the amount of such Gross-Up Payment including any
determination of the parachute payments under Code Section 280G(b)(2), and the assumptions to be utilized in arriving at such determinations shall be made by a nationally recognized certified
public accounting firm that is mutually selected by the eligible employee and the Company (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the eligible employee within 15 business 

3

 

days
of the receipt of notice from the eligible employee that there has been a Payment, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment shall be paid by the Company to the eligible employee within five days of the receipt of the Accounting Firm's determination. Any determination
by the Accounting Firm shall be binding upon the Company and the eligible employee. As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that the Gross-Up Payment made will have been an amount less than the Company should have paid pursuant to this
Section 3(c) (the "Underpayment"). In the event that the eligible employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment and any such Underpayment shall be promptly paid by the Company to or for the benefit of the eligible employee. 

The
Plan Administrator, acting in its sole discretion may, in writing, enhance the amount of Severance Pay and/or Severance Benefits that an eligible employee is eligible to receive over the amount of
Severance Pay and Severance Benefits described above and/or make available to the eligible employee other forms of Severance Benefits. 

SECTION 4    OFFSET  

        Severance Pay and Severance Benefits provided under the Plan shall be offset by any severance pay or severance benefits provided to an eligible employee under an
authorized written employment agreement containing a severance provision, an authorized written severance agreement, or any other group reorganization/restructuring benefit plan or program sponsored
by the Company. By accepting Severance Pay and Severance Benefits under the Plan, an eligible participant waives all rights to receive benefits under the Financial Security Assurance
Holdings Ltd. Severance Policy. In the event an eligible employee who is receiving Severance Pay and Severance Benefits under the Plan is employed with any other employer during the severance
period, due and unpaid Severance Pay shall be offset by an amount equal to fifty percent (50%) of the compensation received by the eligible employee from the new employment during the severance
period, and Severance Benefits shall cease. The eligible employee shall be obligated to refund any amounts paid by the Company as Severance Pay that exceed the amount of Severance Pay payable to the
eligible employee hereunder giving effect to the offset referred to in the preceding sentence. An eligible employee shall, as a condition of receiving Severance
Pay and Severance Benefits under the Plan, undertake to provide to the Company prompt notice of the commencement of any new employment of such eligible employee during the severance period. 

SECTION 5    PAYMENT OF SEVERANCE PAY  

        Severance Pay that becomes payable shall be paid in installments in accordance with the Company's regular payroll payment schedule commencing with the first
regular payroll payment date occurring after expiration of the seven (7) day period during which an eligible employee may revoke his or her Waiver and Release Agreement (as explained more fully
below under the Section entitled "WAIVER AND RELEASE AGREEMENT"); however, the Plan Administrator reserves the right in its sole discretion to pay
Severance Pay in a lump sum. All legally required taxes and any sums owing to the Company shall be deducted from Severance Pay payments. 

SECTION 6    REINSTATEMENT  

        If an eligible employee returns to a temporary assignment with the Company while receiving Severance Pay and Severance Benefits, payments of Severance Pay and
availability of Severance Benefits shall cease during the period of temporary employment and shall resume at the conclusion of the temporary assignment. In the event that an eligible employee who is
receiving Severance Pay or 

4

 

Severance
Benefits is permanently reemployed by the Company, the payment of Severance Pay and the availability of Severance Benefits under the Plan shall cease as of the date his or her reemployment
begins. 

SECTION 7    WAIVER AND RELEASE AGREEMENT  

        In order to receive Severance Pay and Severance Benefits, an eligible employee must submit a signed Waiver and Release Agreement form to the Plan Administrator no
later than twenty-one (21) days after his or her separation date. If the termination of the eligible employee is part of a group termination, the signed Waiver and Release Agreement
must be submitted to the Plan Administrator no later than forty-five (45) days after his or her separation date. Attached to the Waiver and Release Agreement, if required by law, as
Attachment I will be a list of job titles and ages of employees of the Company who are eligible for the Plan, and as Attachment II will be a list of the ages of employees of the Company who are not
eligible for the Plan. An eligible employee may revoke his or her signed Waiver and Release Agreement within seven (7) days of his or her signing the Waiver and
Release Agreement. A revocation by an eligible employee must be made in writing and must be received by the Plan Administrator within such seven (7) day period. An eligible employee who timely
revokes his or her Waiver and Release Agreement shall not be eligible to receive any Severance Pay and Severance Benefits under the Plan. An eligible employee who timely submits a signed Waiver and
Release Agreement form and who does not exercise his or her right of revocation shall be eligible to receive Severance Pay and Severance Benefits. Eligible employees shall be encouraged to contact
their personal attorney to review the Waiver and Release Agreement form if they so desire. 

SECTION 8    PLAN ADMINISTRATION  

        FSA shall serve as the "Plan Administrator" of the Plan and a "named fiduciary" within the meaning of such terms as defined in ERISA. The Plan Administrator shall
have the discretionary authority to determine eligibility for Plan benefits and to construe the terms of the Plan, including the making of factual determinations. The decisions of the Plan
Administrator shall be final and conclusive with respect to all questions concerning the administration of the Plan. The Plan Administrator may delegate to other persons responsibilities for
performing certain of the duties of the Plan Administrator under the terms of the Plan and may seek such expert advice as the Plan Administrator deems reasonably necessary with respect to the Plan.
The Plan Administrator shall be entitled to rely upon the information and advice furnished by such delegatees and experts, unless actually knowing such information and advice to be inaccurate or
unlawful. The Plan Administrator shall establish and maintain a reasonable claims procedure, including a procedure for appeal of denied claims. In no event shall an eligible employee or any other
person be entitled to challenge a decision of the Plan Administrator in court or in any other administrative proceeding unless and until the claim and appeals procedures established under the Plan
have been complied with and exhausted. 

SECTION 9    AMENDMENT/TERMINATION/VESTING  

        The Company may terminate or amend the Plan at any time and from time to time, for any reason or no reason;  provided, however, that any such termination or amendment of the Plan that is adverse to the interest of
any eligible employee under the Plan shall be effective only (i) as to any eligible employee first becoming an Employee after the date of such amendment or termination or (ii) as to any
other employee, on or after December 31, 2004. Any amendment or termination of the Plan shall be adopted by the Board of Directors of FSA and executed by an authorized officer of FSA. In no
event will the termination of the Plan reduce Severance Pay and Severance Benefits previously granted to an eligible employee under the Plan. 

5

 

SECTION 10    PAY AND OTHER BENEFITS  

        An eligible employee's participation in all of the Company's employee pension benefit plans and employee welfare plans in which he or she is enrolled as of his or
her separation date shall cease as of his or her separation date, except as provided above with respect to COBRA coverage and life insurance benefits. All pay and other benefits, including
unreimbursed valid business expenses and accrued but unpaid salary (but excluding Plan benefits), payable to an eligible employee upon his or her separation date shall be paid in accordance with the
terms of those established policies, plans and procedures. An eligible employee who is participating in the Plan shall not be eligible for any other type of severance benefits under any other
severance pay plan, program or policy of the Company. Eligible employees shall receive payment for unused vacation days on the first payroll date following the eligible employee's termination of
employment. Such payment shall be equal to one twentieth (1/20th) of one month of Severance Pay for every vacation day and shall be paid in a single lump sum payment. Such payment shall not reduce the
amount of Severance Pay otherwise payable to the eligible employee under the Plan. For purposes of the foregoing, 

	(a)
	total
vacation days for any eligible employee in respect of any calendar year shall equal the sum of:

	(1)
	carryover
vacation days to which the eligible employee is entitled in accordance with Company policy from the year prior to the year in which the eligible employee's separation date
occurred; and

	(2)
	the
product (rounded up to the nearest whole number) of:

	(A)
	the
annual number of vacation days to which the eligible employee is entitled in accordance with Company policy; and

	(B)
	a
fraction,

	(i)
	the
numerator of which is the number of days of the year which have elapsed from the January 1 of the year in which the eligible employee's separation date occurs
through and including the eligible employee's separation date, and

	(ii)
	the
denominator of which is three hundred and sixty-five (365); and

	(b)
	unused
vacation days for any eligible employee in respect of any calendar year will equal total vacation days in respect of such year determined in accordance with subsection
(a) above, less vacation days used in such year. 

SECTION 11    NO ASSIGNMENT  

        Severance Pay or Severance Benefits payable under the Plan shall not be subject to anticipation, alienation, pledge, sale, transfer, assignment, garnishment,
attachment, execution, encumbrance, levy, lien, or charge, and any attempt to cause such Severance Pay or Severance Benefits to be so subjected shall not be recognized, except to the extent required
by law. 

SECTION 12    RECOVERY OF PAYMENTS MADE BY MISTAKE  

        An eligible employee shall be required to return to the Company any Severance Pay or Severance Benefits, or portion thereof, made by a mistake of fact or law. 

SECTION 13    REPRESENTATIONS CONTRARY TO THE PLAN  

        No employee, officer, or director of the Company has the authority to alter, vary or modify the terms of the Plan except by means of an authorized written
amendment to the Plan. No verbal or 

6

 

written
representations contrary to the terms of the Plan and its written amendments shall be binding upon the Plan, the Plan Administrator or the Company. 

SECTION 14    NO EMPLOYMENT RIGHTS  

        The Plan shall not confer employment rights upon any person. No person shall be entitled, by virtue of the Plan, to remain in the employ of the Company and
nothing in the Plan shall restrict the right of the Company to terminate the employment of any eligible employee at any time. 

SECTION 15    COMPANY INFORMATION  

        Eligible employees may have access to Company Information. Recognizing that the disclosure or improper use of such Company Information will cause serious and
irreparable injury to the Company, as a condition of receiving Severance Pay and Severance Benefits eligible employees with such access acknowledge that (i) they will not at any time, directly
or indirectly, disclose Company Information to any third party or otherwise retain or use such Company Information for their own benefit or the benefit of others, (ii) if they disclose or
improperly use any Company Information, the Company shall be entitled to apply for and receive an injunction to restrain any violation of this paragraph, and (iii) eligible employees shall be
liable for any damages the Company incurs, including litigation costs and reasonable attorneys' fees. 

        "Company Information" shall mean any confidential, financial, marketing, business, technical or other information, including, without
limitation, information that the eligible employee prepared, caused to be prepared, received in connection with and/or contemporaneous with his or her employment with the Company, such as information
provided by customers that is not generally known in the industry, objective and subjective evaluations of management, transactions or proposed transactions, trade secrets, personnel information and
marketing methods and techniques. The term "Company Information" specifically excludes information that is generally known in the industry (except when
known based upon the eligible employee's actions in contravention of this provision) or that is otherwise publicly available. 

SECTION 16    CONFIDENTIALITY  

        Eligible employees are prohibited from disclosing the existence of this Plan and its terms and conditions, to any other past, present or future employees of the
Company, or to any other person, except (and in such cases, only to the extent necessary) to the eligible employee's immediate family, attorneys, accountants, financial advisors, lending institutions,
federal, state or local taxing authorities, or as otherwise required by law, or for the enforcement of the Plan terms. 

SECTION 17    PLAN FUNDING  

        No eligible employee shall acquire by reason of the Plan any right in or title to any assets, funds, or property of the Company. Any Severance Pay or Severance
Benefits that become payable under the Plan are unfunded obligations of the Company and shall be paid from the general assets of the Company. No employee, officer, director or agent of the Company
guarantees in any manner the payment of Severance Pay or Severance Benefits. 

SECTION 18    APPLICABLE LAW  

        The Plan shall be governed and construed in accordance with ERISA and in the event that any reference shall be made to State law, the internal laws of the State
of New York shall apply. 

7

 

SECTION 19    SEVERABILITY  

        If any provision of the Plan is found, held or deemed by a court of competent jurisdiction to be void, unlawful or unenforceable under any applicable statute or
other controlling law, the remainder of the Plan shall continue in full force and effect. 

SECTION 20    PLAN YEAR  

        The ERISA plan year of the Plan shall be the calendar year. 

SECTION 21    RETURN OF COMPANY PROPERTY  

        All Company property (including keys, credit cards, identification cards, office equipment, portable computers and cellular telephones) and Company Information
(including all copies, duplicates, reproductions or excerpts thereof) must be returned by the eligible employee as of his or her separation date in order for such eligible employee to commence
receiving Severance Pay and Severance Benefits under the Plan. 

	 	 	FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
	
 	
 	

By:	
 	

/s/  BRUCE E. STERN      
	 	 	 	 	

	 	 	Its:	 	Managing Director and General Counsel
	 	 	 	 	

8

   Attachment I to

Financial Security Assurance Holdings Ltd. Severance Policy for Senior Management  

WAIVER AND RELEASE AGREEMENT  

        (1)    Waiver and Release, Etc.    In consideration for the Severance Pay and Severance Benefits to be provided to me
under the terms of the FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. SEVERANCE POLICY FOR SENIOR MANAGEMENT (hereinafter, the "Plan"), I, on behalf
of myself and my heirs, executors, administrators, attorneys and assigns, hereby waive, release and forever discharge FINANCIAL SECURITY ASSURANCE
HOLDINGS LTD. (hereinafter, the "Company") and the Company's parent, subsidiaries, divisions and affiliates, whether direct or indirect, its and their joint ventures and
joint venturers (including its and their respective directors, officers, associates, employees, shareholders, partners and agents, past, present and future), and each of its and their respective
successors and assigns (hereinafter collectively referred to as "Releasees"), from any and all known or unknown actions, causes of action, claims or liabilities of any kind which have or could be
asserted against the Releasees arising out of or related to my employment with and/or separation from employment with the Company and/or any of the other Releasees and/or any other occurrence up to
and including the later of the date of this Agreement and the date of termination of employment with the Company and/or any of the other Releasees, including but not limited to: 

	(a)
	claims,
actions, causes of action or liabilities arising under Title VII of the Civil Rights Act, as amended, the Age Discrimination in Employment Act, as amended (the "ADEA"), the
Employee Retirement Income Security Act, as amended, the Rehabilitation Act, as amended, the Americans with Disabilities Act, as amended, the Family and Medical Leave Act, as amended, and/or any other
federal, state, municipal, or local employment discrimination statutes (including, but not limited to, claims based on age, sex, attainment of benefit plan rights, race, religion, national origin,
marital status, sexual orientation, ancestry, harassment, parental status, handicap, disability, retaliation, and veteran status); and/or

	(b)
	claims,
actions, causes of action or liabilities arising under any other federal, state, municipal, or local statute, law, ordinance or regulation; and/or

	(c)
	any
other claim whatsoever including, but not limited to, claims for severance pay, claims based upon breach of contract, wrongful termination, defamation, intentional infliction of
emotional distress, tort, personal injury, invasion of privacy, violation of public policy, negligence and/or any other common law, statutory or other claim whatsoever arising out of or relating to my
employment with and/or separation from employment with the Company and/or any of the other Releasees, 

but
excluding the right to file an administrative charge or participate in an investigation conducted by the Equal Employment Opportunity Commission (the "EEOC"), any claims which I may make under
state workers' compensation or unemployment laws, and/or any claims which by law I cannot waive. I am waiving, however, any right to monetary recovery should the EEOC or any other agency pursue any
claim on my behalf. I further waive, release, and discharge the Company and/or any of the other Releasees from any reinstatement rights that I have or could have and I acknowledge that I have not
suffered any on-the-job injury for which I have not already filed a claim. I also agree never to sue the Company and/or any of the Releasees on the basis of any and all claims
of any type to date arising out of any aspect of my employment with and/or separation from employment with the Company and/or any of the Releasees, except for a claim under the ADEA, including a
challenge to the validity of this Agreement under that law. I understand that this Agreement includes a release of all known and unknown claims arising up to and including the date of this Agreement. 

9

 

        (2)    Company Information.    I acknowledge that I may have access to certain confidential and other information of
the Company, referred to in the Plan as "Company Information". Recognizing that the disclosure or improper use of Company Information may cause serious and irreparable injury to the Company, I agree
that I will not at any time, directly or indirectly, disclose Company Information or use Company Information for my own benefit or the benefit of any other party except as permitted under the Plan. 

        (3)    Cooperation; Return of Company Property.    I agree to cooperate with the Company with respect to providing
information with respect to matters with which I was involved at the time of my termination of employment and to cooperate, at the expense of the Company, in the defense or pursuit by the Company of,
or response by the Company to, any litigation, investigation or dispute relating to matters in which I participated during my term of employment with the Company. I agree to return to the Company all
Company property in my possession as promptly as practicable, including, without limitation, any keys, credit cards, documents and records, identification cards, office equipment, portable computers,
mobile telephones and parking permits. 

        (4)    Consequences of Breach.    In the event that I breach this Agreement by violating any of the provisions of
paragraph (1), (2) or (3), I acknowledge that (q) the Company shall be entitled to apply for and receive an injunction to restrain any violation of such paragraphs, (b) I
shall be required to pay the Company's and/or any of the Releasees' litigation costs and expenses, including reasonable attorneys' fees, associated with defending against my lawsuit and (c) I
shall be obligated to repay to the Company eighty percent (80%) of the Severance Pay already paid to me and to forfeit eighty percent (80%) of the Severance Pay not yet paid to me. Such repayment
and/or forfeiture shall not affect the validity of this Agreement. 

        (5)    Offset.    I understand that, in the event I become employed with any other employer during the severance
period, due and unpaid Severance Pay will be offset by an amount equal to fifty percent (50%) of the compensation received by me from the new employment during the severance period, and Severance
Benefits shall cease. I agree to refund any amounts paid by the Company as Severance Pay that exceed the amount of Severance Pay payable to me under the Plan giving effect to the offset referred to in
the preceding sentence. I further agree to provide to the Company prompt notice of the commencement of any such new employment. 

        (6)    Other Plans.    I understand that this Agreement will not limit any of my rights or obligations in respect of
any Company sponsored plans, each of which has its own provisions governing the rights of employees thereunder in respect of which I agree to remain bound, except that I hereby waive, release and
shall not assert in any forum any claim or right arising out of or in connection with my termination of employment on the basis that such termination interfered with attainment of any rights under
such a plan or was otherwise discriminatory or illegal. The foregoing plans include the Company's pension plans (Money Purchase Plan and Supplemental Executive Retirement Plan), Cash or Deferred Plan
(401(k) plan), home computer program, cafeteria plan ("flex plan"), medical plans, Supplemental Restricted Stock Plan, 1993 Equity Participation Plan and Deferred Compensation Plan. I understand that,
for purposes of determining my rights under the foregoing plans, my employment with the Company will be deemed to have been terminated by the Company without cause. 

        (7)    Review and Revocation Periods.    I acknowledge that I have been given at least twenty-one
(21) days to consider this Agreement thoroughly and I was encouraged to consult with my personal attorney, if desired, before signing below. I understand that I may revoke this Agreement within
seven (7) days after its signing and that any revocation must be made in writing and submitted within such seven (7) day period to the Plan Administrator. I understand that this
Agreement will not be effective or enforceable until after this seven (7) day period. I further understand that if I revoke this Agreement, I shall not receive Severance Pay and Severance
Benefits under the Plan. 

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        (8)    Severability.    I agree that if any provision of this Agreement is found, held or deemed by a court of
competent jurisdiction to be void, unlawful or unenforceable under any applicable statute or controlling law, the remainder of this Agreement shall continue in full force and effect. 

        (9)    Governing Law.    This Agreement is deemed made and entered into in the State of New York, and in all respects
shall be interpreted, enforced and governed under the internal laws of the State of New York, to the extent not governed by federal law. Any dispute under this Agreement shall be adjudicated by a
court of competent jurisdiction in the State of New York. 

        The undersigned hereby acknowledges and agrees that he or she has carefully read and fully understands all the provisions of this Agreement and has voluntarily
entered into this Agreement by signing below as of the date set forth below.

	 	 	 
	
 (Print name)	 	 
	

	
 	

	(Signature)	 	(Date)

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QuickLinks

Exhibit 10.7

Exhibit 10.7

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