Exhibit 10.07
AMBAC FINANCIAL GROUP,
INC.
1997 EQUITY PLAN
JANUARY 2009 NOTICE OF AWARD OF
2008 LONG-TERM
INCENTIVE COMPENSATION IN THE
FORM OF PHANTOM STOCK UNITS
Ambac Financial Group, Inc., a
Delaware corporation and its Subsidiaries (referred to herein as
either the “ Company ” or “
Ambac ”), have adopted the Ambac 1997 Equity
Plan (the “ Plan ”), for the purposes of
providing an incentive to selected employees of the Company and its
affiliates to remain in its employ and to increase their interest
in the success of the Company. The Company pursues these goals by
providing selected employees with opportunities through the Plan to
increase their proprietary interest in the Company and to receive
compensation based upon the Company’s success.
This 2009 Phantom Stock Unit Notice
of Award (the “ Notice of Award” ) sets
forth the terms and conditions of the phantom stock units that have
been granted under the Plan to the individual identified on
Annex A (the “ Participant ”). This
Notice of Award sets forth the number of phantom stock units that
the Participant will receive, the date of grant and the applicable
vesting schedule.
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1.
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Incorporation of Plan Terms.
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This Notice of Award and the phantom
stock units granted hereby are subject to the Plan, the terms of
which are incorporated herein by reference. If there is any
conflict or inconsistency between the Plan and this Notice of
Award, the Plan shall govern. Capitalized terms used in this Notice
of Award without definition shall have the meanings assigned to
them in the Plan. A copy of the Plan is available on Ambac’s
intranet site.
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2.
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Grant of
Phantom Stock Units.
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Subject to the conditions contained
herein and in the Plan, the Company grants to the Participant, as
of the date of grant indicated on Annex A (the “ Date
of Grant ”), the number of phantom stock units (the
“ PSUs ”) specified on Annex
A.
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3.
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Terms and
Conditions of the PSUs.
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The PSUs shall have the following
terms and conditions:
(a) General . Each PSU shall
represent the unsecured promise of the Company to pay the
Participant, on the settlement date of such PSU and subject to the
terms and conditions set forth in this Notice of Award, a cash
amount equal to the Fair Market Value of one share of the
Company’s common stock, par value $0.01 per share (the
“ Common Stock ”).
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(i)
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Normal
Vesting. The PSUs will
ordinarily vest in accordance with the vesting schedule set forth
on Annex A hereto.
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(ii)
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Accelerated Vesting
. Notwithstanding
Section 3(b)(i), any PSUs that have not previously vested
shall vest in full upon the termination of the Participant’s
employment with the Company and its Subsidiaries by reason of
death, Permanent Disability or Retirement at age 55 or older after
at least five years of continuous service with the Company and its
Subsidiaries (including service within a corporation or other
entity acquired by the Company). “Permanent Disability”
shall mean
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circumstances that entitled the
Participant to receive benefits under the long-term disability
policy maintained by the Company or any of its Subsidiaries for the
participant.
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(iii)
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Forfeiture . Unless the Compensation Committee of the Board
of Directors of the Company (the “ Committee
”), in its sole discretion, determines otherwise, any PSUs
that have not vested in accordance with this Section 3(b)
shall be forfeited by the Participant upon the Participant’s
termination of employment with the Company and its subsidiaries;
provided , however , that, the
Committee, in its sole discretion, may waive such forfeiture and
provide for all or some of a Participant’s PSUs to vest as of
the date of the Participant’s termination of employment if
the termination of employment is mutually agreed to by the
Participant and the Company, and the Participant, in consideration
for such vesting, (A) signs a waiver and release, in the form
requested by the Company, irrevocably waiving any and all claims,
liabilities and causes of action relating to the
Participant’s employment with the Company and its affiliates
and the termination thereof, (B) signs a noncompetition
agreement in the form requested by the Company, and (C) takes
any further action requested by the Company.
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(c) Dividends and Distribution on
Common Stock . In the event that, following the Date of Grant
and prior to the settlement of any PSU, the Company pays any cash
or other dividend or makes any other distribution in respect of the
Common Stock, each PSU shall be credited with an additional number
of PSUs (including fractions thereof) determined by dividing
(i) the amount or cash, or the value (as determined by the
Committee) of any other property, paid or distributed in respect of
one outstanding share of Common Stock by (ii) the closing
price of a share of Common Stock as reported on the composite tape
for securities listed on the New York Stock Exchange, or such other
national securities exchange as may be designated by the Committee,
or in the event that the Common Stock is not listed for trading on
a national securities exchange but is quoted on an automated
quotation system, on such automated quotation system, in any such
case for the date of such payment or distribution (or if there were
no sales on the date of such payment or distribution, the closing
price as reported on such composite tape or automated quotation
system for the most recent day during which a sale occurred). Any
PSUs so credited shall be subject to the same vesting provisions as
the PSU in respect of which they are credited.
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(i)
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Ordinary
Settlement. Settlement of
any PSUs that vest pursuant to Section 3(b)(i) or pursuant to
3(b)(ii) upon termination of the Participant’s employment
with the Company and its Subsidiaries by reason of death or
Retirement shall occur upon vesting. Settlement of any PSUs that
vest pursuant to Section 3(b)(ii) upon termination of the
Participant’s employment with the Company and its
Subsidiaries by reason of Permanent Disability or as a result of
the Committee’s exercise of discretion to accelerate vesting
pursuant to Section 3(b)(iii) shall be settled upon the normal
vesting date as set forth in Annex A hereto. PSUs will be settled
exclusively in cash.
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(ii)
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Payment
Restrictions for Specified Employees . If at the time of a Participant’s
termination of employment with the Company and its Subsidiaries,
the Participant is a “Specified Employee” within the
meaning of Section 409A of the Internal Revenue Code and the
rules, regulations and guidance thereunder (“ Section
409A ”), then, anything in this Notice of Award to
the contrary not withstanding, to the extent that the
Participant’s PSUs are considered to provide for a deferral
of compensation pursuant to Section 409A, no settlement of
such PSUs in connection with the Participant’s termination of
employment (other than by reason of death) shall be made before the
earlier to occur of (X) the date which is six months and one
day following the date of such termination of employment and
(Y) the date of the Participant’s death following
termination of employment.
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(e) Transfer Restrictions on
PSUs . PSUs may not be transferred, except by will or the laws
of descent and distribution or pursuant to a Qualifi
