FINANCIAL SECURITY ASSURANCE HOLDINGS LTD/NY/
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>ex10-2.txt
<TEXT>

                                                                    EXHIBIT 10.2

                   FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
                     SEVERANCE POLICY FOR SENIOR MANAGEMENT

                (AS AMENDED AND RESTATED EFFECTIVE MAY 17, 2001)

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                                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..........................................................  5

SECTION 5.   PAYMENT OF SEVERANCE PAY........................................  6

SECTION 6.   REINSTATEMENT...................................................  6

SECTION 7.   WAIVER AND RELEASE AGREEMENT....................................  6

SECTION 8.   PLAN ADMINISTRATION.............................................  7

SECTION 9.   AMENDMENT/TERMINATION/VESTING...................................  7

SECTION 10.  PAY AND OTHER BENEFITS..........................................  7

SECTION 11.  NO ASSIGNMENT...................................................  8

SECTION 12.  RECOVERY OF PAYMENTS MADE BY MISTAKE............................  8

SECTION 13.  REPRESENTATIONS CONTRARY TO THE PLAN............................  9

SECTION 14.  NO EMPLOYMENT RIGHTS..............................................9

SECTION 15.  COMPANY INFORMATION.............................................  9

SECTION 16.  CONFIDENTIALITY.................................................  9

SECTION 17.  PLAN FUNDING.....................................................10

SECTION 18.  APPLICABLE LAW.................................................. 10

SECTION 19.  SEVERABILITY.................................................... 10

SECTION 20.  PLAN YEAR....................................................... 10

SECTION 21.  RETURN OF COMPANY PROPERTY...................................... 10

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                   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. The Plan is hereby amended and restated,
as set forth in this Plan document, effective as of May 15, 2001, to amend the
form of waiver and release agreement appended thereto to comply with new
regulations under the Age Discrimination in Employment Act. 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 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 Financial Guaranty Department of Financial
Security Assurance Inc., (f) the Chief Underwriting Officer of Financial
Security Assurance Inc. and (g) the Managing Director in charge of the Insured
Portfolio Management Department 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.

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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;

      (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

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                  Office 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,
                  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

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                  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

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                                                                          Page 5


                  "ACCOUNTING FIRM") which shall provide detailed supporting
                  calculations both to the Company and the eligible employee
                  within 15 business 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.

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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 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.

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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.

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,

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      (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.

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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 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.

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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.

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/ Roger K. Taylor
                                       ----------------------------

                                   Its: President
                                        ---------------------------

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                                                                 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

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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.

      (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. 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

<Page>
                                                                          page 3


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.

      (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)


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                (Signature)                                    (Date)

</TEXT>
</DOCUMENT>
