Exhibit 10.46
Amended and Restated EMPLOYMENT AGREEMENT
This Amended and Restated EMPLOYMENT AGREEMENT (“Agreement”) is entered into as
of the 27th day of February, 2020, by and among Ambac Financial Group, Inc., a
Delaware corporation (“AFG”), Ambac Assurance Corporation, a Wisconsin
corporation (“AAC” and, along with AFG, the “Company”, as applicable) and Claude
LeBlanc, an individual (the “Executive”).
WHEREAS, the Company and the Executive have agreed to amend and restate the
terms of the employment agreement dated as of December 8, 2016 as hereinafter
set forth, and to continue the employment of the Executive on such amended
terms;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:
1.Employment Agreement. On the terms and conditions set forth in this Agreement,
AFG and AAC agree to employ the Executive and the Executive agrees to be
employed by AFG and AAC for the Employment Period set forth in Section 2 and in
the positions and with the duties set forth in Section 3. The Executive shall be
an employee of AAC. AFG and AAC shall be jointly and severally liable for all
compensation and benefits payable to the Executive under Sections 4 and 7 of
this Agreement; provided, that such joint and several liability shall not impact
between themselves the cost sharing agreements between AFG and AAC that are in
effect on the date hereof.
2.Term. The term of employment under this Agreement shall be for a period
beginning on January 1, 2017 (the “Effective Date”) and ending on the first
anniversary thereof, unless sooner terminated as hereinafter set forth; provided
that, on such first anniversary of the Effective Date and on each annual
anniversary thereafter (such date and each annual anniversary thereof, a
“Renewal Date”), the Agreement shall be deemed to be automatically extended upon
the same terms and conditions (except for such terms and conditions that expire
prior to any extension period), for successive periods of one year, unless the
Company or the Executive provides written notice of its intention not to extend
the term of the Agreement at least 90 days’ prior to the applicable Renewal
Date. The period during which the Executive is employed by AAC hereunder is
hereinafter referred to as the “Employment Period.”
3.Position and Duties. During the Employment Period, the Executive shall serve
as President and Chief Executive Officer of each of AFG and AAC. In such
capacities, the Executive shall report directly to the Board of Directors of AFG
and AAC, as applicable. During the Employment Period, the Executive shall have
the duties, responsibilities and authority as shall be consistent with the
Executive’s positions and such other duties, responsibilities and authority
consistent with the Executive’s positions as may be assigned to the Executive by
the relevant Board of Directors. The Executive shall devote substantially all of
the Executive’s business efforts to the performance of the Executive’s duties
hereunder and the advancement of the business and affairs of the Company,
provided that in no event shall this sentence prohibit the Executive from
creating and managing his personal and family investments or participating in
charitable activities, so long as such personal or family investments and
charitable activities do not interfere with the Executive’s duties under this
Agreement and comply with the Company’s Code of Business Conduct and other
policies of the Company as in effect from time to time. AFG and AAC shall each
take such actions as may be required so that the Executive becomes a member of
the Board of Directors of such company. The Executive may

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serve on the board of directors of other companies with the prior approval of
the AFG Board of Directors or the Governance and Nominating Committee thereof;
provided that the Executive agrees to resign such service in the event the AFG
Board of Directors or the Governance and Nominating Committee thereof reasonably
determines such service materially interferes with the Executive’s duties to the
Company.
4.Compensation and Benefits.
(a)Base Salary. Commencing as of the Effective Date and during the Employment
Period, the Company shall pay to the Executive a base salary at the rate of no
less than $900,000 per calendar year (the “Base Salary”), less applicable
deductions, and prorated for any partial month or year, as applicable. The Base
Salary shall be reviewed by the Compensation Committee of AFG (the “Compensation
Committee”) no less frequently than annually and may be adjusted in the
discretion of the Compensation Committee (but subject to the Executive’s right
to resign for Good Reason in the event of certain reductions). Any such adjusted
Base Salary shall constitute the “Base Salary” for purposes of this Agreement.
The Base Salary shall be paid in substantially equal installments in accordance
with AAC’s regular payroll procedures.
(b)Annual Bonus. For each calendar year that ends during the Employment Period
starting with the 2017 calendar year, the Executive shall be eligible to receive
an annual bonus pursuant to the Company’s annual bonus plan for senior
executives, a portion of which, not to exceed 50%, may be awarded in the form of
equity grants as determined by the Compensation Committee, in its discretion.
The amount of any such annual bonus paid to the Executive during the Employment
Period shall be based on the achievement of performance goals that are
established by the Compensation Committee. With respect to any performance goals
that are subjective in nature, the Compensation Committee shall determine, in
its discretion, whether and to what extent such performance goals are achieved.
The Executive’s target annual bonus amount shall be no less than 100% of the
Base Salary, as determined by the Compensation Committee, in its discretion. For
the avoidance of doubt, such target or other annual bonus opportunity does not
constitute a guarantee of any bonus payment. Any annual bonus payable to the
Executive hereunder shall be paid at the time bonuses are otherwise paid to
other executive officers of AAC, but in any event, no later than March 15 of the
calendar year following the year with respect to which such annual bonus is
earned.
(c)Long-Term Incentives. During the Employment Period, the Executive shall be
eligible to participate in AFG’s Incentive Compensation Plan or any successor
plan or additional plan of AFG, subject to the terms of any such plan, as
determined by the Compensation Committee, in its discretion. With respect to
each calendar year that ends during the Employment Period starting with the 2017
calendar year, the Executive’s target annual long-term incentive (“LTI”) award
amount shall be no less than 150% of Base Salary, as determined by the
Compensation Committee in its discretion. For the avoidance of doubt, such
target or other annual LTI award opportunity does not constitute a guarantee of
any LTI payment.
(d)Employee Benefits; Perquisites. During the Employment Period, the Executive
shall be entitled to participate in all employee benefit plans, practices and
programs maintained by the Company, as in effect from time to time, that are
generally made available to senior executives of the Company. During the
Employment Period, the Executive shall be entitled to fringe benefits and
perquisites consistent with the practices and policies of the Company, and to
the extent such fringe benefits or perquisites (or both) are generally made
available to senior executives of the Company. The Company reserves the right to
amend, modify or cancel any employee benefit plans, practices and programs, and
any fringe benefits and perquisites, at any time and without the consent of the
Executive.
(e)Company Compensation Plans. Except as otherwise provided herein, all
compensation provided to the Executive pursuant to Section 4 shall be in
accordance with the Company’s and Company Affiliates’ compensation plans and
policies. For purposes of this Agreement, “Company Affiliate” means

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any entity controlled by, in control of, or under common control with, AFG,
including without limitation, AAC and its other direct and indirect
subsidiaries.
(f)Clawback/Recoupment. Notwithstanding any other provision in this Agreement to
the contrary, any compensation paid to the Executive pursuant to this Agreement
or any other agreement or arrangement with the Company shall be subject to
mandatory repayment by the Executive to AAC or AFG, as applicable, to the extent
any such compensation paid to the Executive is, or in the future becomes,
subject to (i) the Company’s Recoupment Policy as in effect from time to time,
or (ii) any law, rule, requirement or regulation which imposes mandatory
recoupment, under circumstances set forth in such law, rule, requirement or
regulation.
(g)Stock Ownership Guidelines. The Executive shall be required to hold shares of
the Company’s common stock as set forth in, and subject to the terms of, AFG’s
Executive Stock Ownership and Retention Policy as in effect from time to time.
5.Expenses. The Company shall reimburse the Executive for all expenses
reasonably and actually incurred in accordance with policies which may be
adopted from time to time by the Company.
6.Termination of Employment.
(a)Permitted Terminations. The Executive’s employment is “at will” and may be
terminated by either the Executive or the Company at any time and for any or no
reason, subject to the following:
(i)Death. The Executive’s employment hereunder shall terminate upon the
Executive’s death;
(ii)By the Company.
(A)Disability. The Company may terminate the Executive’s employment due to the
Executive’s Disability while such Disability exists. For purposes of this
Agreement, “Disability” means a “disability” that entitles the Executive to
benefits under the applicable Company long-term disability plan covering the
Executive and, in the absence of such a plan, that the Executive shall have been
unable, due to physical or mental incapacity, to substantially perform the
Executive’s duties and responsibilities hereunder for 180 days out of
any 365 day period or for 120 consecutive days. The Executive agrees, in the
event of any question as to the existence, extent or potentiality of the
Executive’s Disability upon which the Company and the Executive cannot agree
shall be resolved by a qualified, independent physician mutually agreed to by
the Company and the Executive, the cost of such examination to be paid by the
Company. The written medical opinion of such physician shall be conclusive and
binding upon each of the parties hereto as to whether a Disability exists and
the date when such Disability arose. This section shall be interpreted and
applied so as to comply with the provisions of the Americans with Disabilities
Act (to the extent applicable) and any applicable state or local laws. Until
such termination, the Executive shall continue to receive his compensation and
benefits hereunder, reduced by any benefits payable to him under any
Company-provided disability insurance policy or plan applicable to him; or
(B)Cause. The Company may terminate the Executive’s employment at any time for
Cause or without Cause.
For purposes of this Agreement, “Cause” shall be limited to the following
events: (i) the Executive’s gross negligence or willful misconduct in the
performance of his duties, (ii) the Executive’s conviction of, or plea of guilty
or nolo contendere to, a misdemeanor involving moral turpitude that has a
substantial adverse effect

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on the Executive’s qualifications or ability to perform his duties or any
felony, (iii) the Executive’s failure to attempt to perform lawfully assigned
duties consistent with his position or to materially comply with the Company’s
written material policies, including the Company’s Code of Business Conduct and
the Delegation of Authority Policy of AFG or AAC, or (iv) the Executive’s
material breach of this Agreement. Termination of the Executive’s employment
shall not be deemed to be for Cause unless and until the Company delivers to the
Executive copies of resolutions duly adopted by the affirmative votes of not
less than a majority of both the AFG Board and the AAC Board (after reasonable
written notice is provided to the Executive and the Executive is given a
reasonable opportunity, together with counsel, to be heard before both Boards),
finding that the Executive has engaged in the conduct described in any of
(i)-(iv) above. Except for a failure, breach or refusal which, by its nature,
cannot reasonably be expected to be cured, or for a termination under clause
(ii), the Executive shall have fourteen (14) days from the delivery of written
notice by the Company within which to cure any acts constituting Cause.
(iii)By the Executive. The Executive may terminate his employment for any reason
(including Good Reason) or for no reason. If the Executive terminates his
employment without Good Reason, then he shall provide written notice to the
Company at least forty-five (45) days prior to the Date of Termination.
For purposes of this Agreement, “Good Reason” means (i) any diminution in the
Executive’s title or reporting relationships, (ii) a substantial diminution in
the Executive’s duties or responsibilities, (iii) the relocation of the
Executive’s principal place of employment by more than thirty-five (35) miles,
(iv) a reduction of the Executive’s Base Salary, target annual bonus opportunity
or target annual LTI, other than a uniform reduction applied to substantially
all senior executive officers of AFG and AAC that does not result in a reduction
of more than five percent (5%) of any of the Executive’s Base Salary, target
annual bonus opportunity or target annual LTI award opportunity, (v) a material
decrease in the employee benefits made available to the Executive, in the
aggregate, other than in connection with an across-the-board reduction
applicable to substantially all senior executives, (vi) a material breach by AFG
or AAC of this Agreement, or (vii) after becoming a director of AFG and/or ACC,
the Executive ceases to be any such director. In order to invoke a termination
for Good Reason, the Executive must deliver a written notice of the grounds for
such termination within ninety (90) days of the initial existence of the event
giving rise to Good Reason and the Company shall have thirty (30) days to cure
the circumstances. In order to terminate his employment, if at all, for Good
Reason, the Executive must terminate employment within sixty (60) days of the
end of the cure period if the circumstances giving rise to Good Reason have not
been cured.
(b)Termination. Any termination of the Executive’s employment by the Company or
the Executive (other than because of the Executive’s death) shall be
communicated by a written Notice of Termination to the other party hereto in
accordance with the requirements of this Agreement. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon, if any, and
shall, in the case of termination for “Cause” or for “Good Reason,” set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment. Termination of the Executive’s
employment shall take effect on the Date of Termination.
For purposes of this Agreement, “Date of Termination” means (i) if the
Executive’s employment is terminated due to the Executive’s death, the date of
the Executive’s death; (ii) if the Executive’s employment is terminated because
of the Executive’s Disability pursuant to Section 6(a)(ii)(A), 30 days after
Notice of Termination, provided that the Executive shall not have returned to
the performance of the Executive’s duties on a full-time basis during such
thirty (30)-day period with reasonable accommodation; (iii) if the Executive’s
employment is terminated due to the Company’s or the Executive’s failure to
extend the term of the Agreement

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pursuant to Section 2, the applicable Renewal Date; or (iv) if the Executive’s
employment is terminated by the Company pursuant to Section 6(a)(ii)(B) or by
the Executive pursuant to Section 6(a)(iii), the date specified in the Notice of
Termination. Notwithstanding any provision of this Agreement to the contrary,
for purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment that are
considered deferred compensation under Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”) and the regulations and guidance promulgated
thereunder (collectively “Section 409A”), references to the Executive’s
termination of employment (and corollary terms) with the Company shall be
construed to refer to the Executive’s “separation from service” (within the
meaning of Treas. Reg. Section 1.409A-1(h)) with the Company.
(c)Resignation of All Other Positions. Upon termination of the Executive’s
employment for any reason, the Executive shall be deemed to have resigned from
all positions that the Executive holds as a director, officer or employee of
AFG, AAC or any Company Affiliate and as a fiduciary with respect to any benefit
plan (or related trust) sponsored by AFG, AAC, or any Company Affiliate.
Executive agrees to execute any letter consistent with the foregoing that AFG,
AAC, or any Company Affiliate may reasonably request.
7.Compensation Upon Termination.
(a)Death. If the Executive’s employment is terminated during the Employment
Period as a result of the Executive’s death, this Agreement and the Employment
Period shall terminate without further notice or any action required by the
Company or the Executive’s legal representatives. Upon the Executive’s death,
the Company shall pay to the Executive’s legal representative or estate, as
applicable, (i) the Executive’s Base Salary due through the Date of Termination,
(ii) all Accrued Benefits, if any, to which the Executive is entitled as of the
Date of Termination at the time such payments are due and (iii) an annual bonus
for the year of termination, based on actual full-year performance (with any
individual factor being rated at one hundred percent (100%)), pro-rated to
reflect the time of service for such year through the Date of Termination,
payable at the time the Company pays bonuses to active employees, but in any
event, no later than March 15 of the calendar year following the year with
respect to which such annual bonus is earned. The rights of the Executive’s
legal representative or estate, as applicable, with respect to the Executive’s
equity or equity-related awards shall be governed by the applicable terms of the
related plan or award agreement. In addition, with respect to all of the
Executive’s outstanding equity awards granted on and after the Effective Date,
unless the applicable award agreement provides for greater vesting acceleration
on termination as a result of the Executive’s death, upon the termination of the
Executive’s employment as a result of the Executive’s death, (i) the Executive
shall receive twelve (12) months of vesting acceleration on all of the
Executive’s then-outstanding time-based equity awards or, if vesting is less
frequent than annually, a pro rata portion in an amount determined by
multiplying the total number of shares or units covered by the applicable award
by a fraction where the numerator is the number of days that have elapsed from
the most recent vesting date (or, if none, the grant date) and the denominator
is the total number of days covered by the vesting schedule starting from the
grant date and ending on the final scheduled vesting date, and (ii) with respect
to the Executive’s then-outstanding performance-based equity awards, the
Executive shall be deemed to have satisfied the service-based component of such
awards and shall be eligible to receive a portion of each such award based on
actual performance through the end of the applicable performance period,
pro-rated to reflect the Executive’s actual service plus twelve (12) months
during each performance period. Except as set forth herein, the Company and
Company Affiliates shall have no further obligation to the Executive or his
legal representatives, estate or heirs upon his death under this Agreement other
than such obligations which by their terms continue following termination of the
Executive’s employment. For purposes of this Agreement, “Accrued Benefits” means
(i) any compensation deferred by the Executive prior to the Date of

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Termination and not paid by the Company or otherwise specifically addressed by
this Agreement; (ii) any earned but unpaid annual bonus for the year preceding
the year of termination, (iii) any amounts or benefits owing to the Executive or
to the Executive’s beneficiaries under the then applicable benefit plans of the
Company; (iv) any amounts owing to the Executive for reimbursement of expenses
properly incurred by the Executive prior to the Date of Termination and which
are reimbursable in accordance with Section 5; and (v) any other benefits or
amounts due and owing to the Executive under the terms of any plan, program or
arrangement of the Company.
(b)Disability. If the Company terminates the Executive’s employment during the
Employment Period because of the Executive’s Disability pursuant to
Section 6(a)(ii)(A), (A) the Company shall pay to the Executive (i) the
Executive’s Base Salary due through the Date of Termination, (ii) all Accrued
Benefits, if any, to which the Executive is entitled as of the Date of
Termination at the time such payments are due and (iii) an annual bonus for the
year of termination, based on actual full-year performance (with any individual
factor being rated at one hundred percent (100%)), pro-rated to reflect the time
of service for such year through the Date of Termination, payable at the time
the Company pays bonuses to active employees, but in any event, no later than
March 15 of the calendar year following the year with respect to which such
annual bonus is earned. The rights of the Executive with respect to the
Executive’s equity or equity-related awards shall be governed by the applicable
terms of the related plan or award agreement. In addition, with respect to all
of the Executive’s outstanding equity awards granted on and after the Effective
Date, unless the applicable award agreement provides for greater vesting
acceleration on termination because of the Executive’s Disability, upon the
termination of the Executive’s employment because of the Executive’s Disability,
(i) the Executive shall receive twelve (12) months of vesting acceleration on
all of the Executive’s then-outstanding time-based equity awards or, if vesting
is less frequent than annually, a pro rata portion in an amount determined by
multiplying the total number of shares or units covered by the applicable award
by a fraction where the numerator is the number of days that have elapsed from
the most recent vesting date (or, if none, the grant date) and the denominator
is the total number of days covered by the vesting schedule starting from the
grant date and ending on the final scheduled vesting date, and (ii) with respect
to the Executive’s then-outstanding performance-based equity awards, the
Executive shall be deemed to have satisfied the service-based component of such
awards and shall be eligible to receive a portion of each such award based on
actual performance through the end of the applicable performance period,
pro-rated to reflect the Executive’s actual service plus twelve (12) months
during each performance period. Except as set forth herein, the Company and
Company Affiliates shall have no further obligations to the Executive under this
Agreement upon Executive’s termination due to Disability pursuant to
Section 6(a)(ii)(A) other than such obligations which by their terms continue
following termination of the Executive’s employment.
(c)Termination by the Company for Cause or by the Executive without Good Reason
or by the Executive’s Failure to Extend the Term. If, during the Employment
Period, the Company terminates the Executive’s employment for Cause pursuant to
Section 6(a)(ii)(B) or the Executive terminates his employment without Good
Reason pursuant to Section 6(a)(iii) or fails to extend the term of the
Agreement pursuant to Section 2, the Company shall pay to the Executive the
Executive’s Base Salary due through the Date of Termination and all Accrued
Benefits, if any, to which the Executive is entitled as of the Date of
Termination, at the time such payments are due, provided that if the Company
terminates the Executive’s employment for Cause or the Executive terminates his
employment without Good Reason, the Executive’s Accrued Benefits shall not
include any earned but unpaid annual bonus for the year preceding the year of
termination unless otherwise determined by the Compensation Committee. Upon a
termination of the Executive’s employment by the Company for Cause or by the
Executive without Good Reason, or due to the Executive’s failure to extend the
term of the Agreement, the Executive’s rights with respect to then vested or
exercisable equity or equity-related awards shall be governed by the applicable
terms of the related plan

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or award agreements. Except as set forth herein, the Company and Company
Affiliates shall have no further obligations to the Executive under this
Agreement upon such termination.
(d)Termination by the Company without Cause or by the Company’s Failure to
Extend the Term or by the Executive with Good Reason. If, during the Employment
Period, other than as set forth in Section 7(e), the Company terminates the
Executive’s employment other than for Cause pursuant to Section 6(a)(ii)(B) or
fails to extend the term of the Agreement pursuant to Section 2 (assuming no
Cause then exists), or the Executive terminates his employment with Good Reason
pursuant to Section 6(a)(iii), the Company shall pay to the Executive (i) the
Executive’s Base Salary due through the Date of Termination and (ii) all Accrued
Benefits, if any, to which the Executive is entitled as of the Date of
Termination, in each case at the time such payments are due. The Executive shall
also be entitled to receive, subject to his compliance with the restrictive
covenants in Section 8 and the other requirements of this Agreement and his
execution and non-revocation of the release described in Section 7(f), the
following severance payments and benefits: (1) a lump sum payment equal to two
(2) times the sum of (i) the Executive’s Base Salary and (ii) the amount of the
Executive’s annual target bonus for the calendar year in which the Date of
Termination occurs (the “Target Bonus”), (2) a lump sum payment equal to the
product of (x) the Target Bonus and (y) a fraction, the numerator of which is
the number of days the Executive was employed by the Company during the year of
termination and the denominator of which is the number of days in such year,
(3) for up to twelve (12) months following the Date of Termination, the Company
shall provide the Executive with the customary outplacement services provided to
senior executives of the Company whose employment terminates, which shall be
provided by the Company’s approved outplacement services vendor, and
(4) provided the Executive and his eligible dependents timely and properly elect
to continue health care coverage under COBRA, with regard to the medical
program, the Executive and such eligible dependents shall be entitled to
continue to participate in such basic medical and life insurance programs of the
Company as in effect from time to time, on the same terms and conditions as
applicable to active senior executives of the Company, for twelve months or, if
earlier, until the date the Executive becomes eligible to receive comparable
coverage from another Company or is otherwise no longer eligible to receive
COBRA continuation coverage; provided, however, if such medical plan is
“self-funded” within the meaning of Code Section 105(h) at the time of
termination of employment, then, in lieu of such continued participation in the
medical program, the Executive shall be entitled to receive a lump sum payment
equal to the portion of the Executive’s COBRA premiums equal to twelve
(12) months of the Company subsidy of group health plan premiums for the
Executive and his eligible dependents, subject to applicable withholdings.
Subject to Section 7(h), the lump sum payments described in items (1), (2) and,
if applicable, (4) in the preceding sentence shall be made within
ten (10) business days of the Release Effective Date; provided, however, that if
the Release Period spans two calendar years, no such amounts subject to Section
409A shall be paid prior to January 1 of the second calendar year. The
Executive’s rights with respect to equity or equity-related awards shall be
governed by the applicable terms of the related plan or award agreements,
subject to the next sentence. In addition, with respect to all of the
Executive’s outstanding equity awards granted on and after the Effective Date,
unless the applicable award agreement provides for greater vesting acceleration
upon a termination of the Executive’s employment by the Company without Cause or
by the Executive for Good Reason, upon the termination of the Executive’s
employment by the Company without Cause or as a result of the Company’s failure
to extend the term of the Agreement pursuant to Section 2 or by the Executive
for Good Reason, (i) the Executive shall receive twelve (12) months of vesting
acceleration on all of the Executive’s then-outstanding time-based equity awards
or, if vesting is less frequent than annually, a pro rata portion in an amount
determined by multiplying the total number of shares or units covered by the
applicable award by a fraction where the numerator is the number of days that
have elapsed from the most recent vesting date (or, if none, the grant date) and
the denominator is the total number of days covered by the vesting schedule
starting from the grant date and ending on the final scheduled vesting date, and
(ii) with respect to the Executive’s then-outstanding performance-based equity
awards, the Executive

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shall be deemed to have satisfied the service-based component of such awards and
shall be eligible to receive a portion of each such award based on actual
performance through the end of the applicable performance period, pro-rated to
reflect the Executive’s actual service plus twelve (12) months during each
performance period.
(e)Termination by the Company without Cause or by the Executive with Good Reason
in connection with a Change in Control. If, during the Employment Period, the
Company terminates the Executive’s employment other than for Cause pursuant to
Section 6(a)(ii)(B) or fails to extend the term of the Agreement pursuant to
Section 2 (unless coincidental with a termination for Cause), or the Executive
terminates his employment with Good Reason pursuant to Section 6(a)(iii), in
each case either (i) in contemplation of and no more than 120 days prior to a
Change in Control (as defined below) or (ii) within one (1) year following the
occurrence of a Change in Control, then, subject to his compliance with the
restrictive covenants in Section 8 and the other requirements of this Agreement
and his execution and non-revocation of the release described in Section 7(f),
the Executive shall receive the payments set forth in Section 7(d) above, except
with respect to all of the Executive’s outstanding equity awards granted on and
after the Effective Date, (x) all of the Executive’s then-outstanding time-based
equity awards shall become immediately vested and (y) with respect to the
Executive’s then-outstanding performance-based equity awards, the Executive
shall be eligible to vest in each such award based on actual performance through
the end of the applicable performance period.
For purposes of this Agreement, “Change in Control” means the occurrence of one
or more of the following events, for either AAC or AFG: (i) any “person” (as
such term is used in Sections 3(a)(9) and 13(d) of the Securities Exchange Act
of 1934 as amended (the “Act”)) or “group” (as such term is used in
Section 13(d)(3) of the Act) is or becomes a “beneficial owner” (as such term is
used in Rule 13d-3 promulgated under the Act) of more than thirty percent
(30%) of the Voting Stock of AAC or AFG; (ii) within any twenty-four (24) month
period the majority of the AAC Board or AFG Board consists of individuals other
than “Incumbent Directors,” which term means the members of the AAC Board or AFG
Board on the Effective Date; provided that any person becoming a director
subsequent to such date whose election or nomination for election was supported
by a majority of the directors who then comprised the Incumbent Directors of the
applicable company shall be considered to be an Incumbent Director; (iii) AAC or
AFG transfers all or substantially all of its assets or business (unless the
shareholders of the applicable company immediately prior to such transaction
beneficially own, directly or indirectly, in substantially the same proportion
as they owned the Voting Stock of the applicable company, all of the Voting
Stock or other ownership interests of the entity or entities, if any, that
succeed to the business of, as applicable, AAC or AFG or AAC’s or AFG’s ultimate
parent company if AAC or AFG is a subsidiary of another corporation); or
(iv) any merger, reorganization, consolidation or similar transaction unless,
immediately after consummation of such transaction, the shareholders of AAC or
AFG, as applicable, immediately prior to the transaction hold, directly or
indirectly, more than fifty percent (50%) of the Voting Stock of, as applicable,
AAC or AFG or AAC’s or AFG’s ultimate parent company if AAC or AFG is a
subsidiary of another corporation (there being excluded from the number of
shares held by such shareholders, but not from the Voting Stock of the combined
company, any shares received by affiliates of such other company in exchange for
stock of such other company). For purposes of this Change in Control definition,
AAC and AFG shall include any entity that succeeds to all or substantially all
of the business of AAC or AFG and “Voting Stock” shall mean securities or
ownership interests of any class or classes having general voting power under
ordinary circumstances, in the absence of contingencies, to elect the directors
of a corporation.
(f)Liquidated Damages. The parties acknowledge and agree that damages which will
result to the Executive for termination of the Executive’s employment by the
Company without Cause under

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Section 6(a)(ii)(B) or by the Executive for Good Reason under
Section 6(a)(iii) shall be extremely difficult or impossible to establish or
prove, and agree that the severance payments and benefits pursuant to
Sections 7(d) and (e) (the “Severance Payments”), shall constitute liquidated
damages for any such termination. The Executive agrees that, except for such
other payments and benefits to which the Executive may be entitled as expressly
provided by the terms of this Agreement or any other applicable benefit plan,
such liquidated damages shall be in lieu of all other contractual claims that
the Executive may make by reason of any such termination of his employment,
other than with respect to the Executive’s outstanding equity or equity-related
awards, any vested payments or benefits under any plan, program or arrangement
of AFG or AAC in which the Executive participated, any claim for indemnification
or contribution, and any claim for coverage under AFG’s or AAC’s indemnification
and directors and officers liability coverage, and that, as a condition to
receiving the Severance Payments, the Executive will execute a release of claims
substantially in the form of the release attached hereto as Exhibit A (except as
may be revised to reasonably reflect changes in applicable law) and such other
instruments or documents as are required by the terms of this Agreement. Within
two business days of the Date of Termination, the Company shall deliver to the
Executive the release for the Executive to execute. The Executive will forfeit
all rights to the Severance Payments unless, (i) within forty-five (45) days of
delivery of the release by the Company to the Executive (such period, the
“Release Period”), the Executive executes and delivers the release to the
Company and (ii) such release has become fully effective and irrevocable by
virtue of the expiration of the revocation period without the release having
been revoked (the first such date, the “Release Effective Date”). The Company’s
obligation to pay the Severance Payments is subject to the occurrence of the
Release Effective Date, and if the Release Effective Date does not occur, then
the Company shall have no obligation to pay the Severance Payments. If the
Executive fails to materially comply with his material obligations under
Sections 6(c) or 8 and has not cured (if curable) any such failure within ten
(10) days after being provided with written notice of such failure in reasonable
detail, the Executive shall, to the extent such amounts are paid, vested or
distributed pursuant to Section 7 hereof, (i) forfeit outstanding equity awards,
(ii) transfer the shares underlying any equity awards that were accelerated
pursuant to the terms of the related plan or award agreements and settled in
shares to AAC for no consideration and (iii) repay the after-tax amount of the
Severance Payments and any equity awards that were accelerated pursuant to the
terms of the related plan or award agreements and settled in cash or sold.
(g)No Offset. In the event of termination of his employment, the Executive shall
be under no obligation to seek other employment or take any other action to
mitigate any amounts owed to the Executive under this Agreement and, except as
otherwise expressly provided herein, there shall be no offset against amounts
due to him on account of any remuneration or benefits provided by any subsequent
employment he may obtain. The Company’s and Company Affiliates’ obligation to
make any payment pursuant to, and otherwise to perform its obligations under,
this Agreement shall not be affected by any offset, counterclaim or other right
that the Company or its affiliates may have against him for any reason.
(h)Section 409A. The payments and benefits to be provided to the Executive
pursuant to this Agreement are intended to comply with, or be exempt from,
Section 409A and will be interpreted, administered and operated in a manner
consistent with that intent. If the Executive notifies the Company (with
specificity as to the reason therefor) that the Executive believes that any
provision of this Agreement (or of any award of compensation, including equity
compensation or benefits) would cause the Executive to incur any additional tax
or interest under Section 409A, and the Company concurs with such belief or the
Company independently makes such determination, the Company shall, after
consulting with the Executive, reform such provision to try to comply with
Section 409A through good faith modification to the maximum extent reasonably
appropriate to comply with Code Section 409A. To the extent that any provision
hereof is modified in order to comply with Section 409A, such modification shall
be made in good faith and shall,

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to the maximum extent reasonably possible, maintain the original intent and
economic benefit to the Executive and the Company of the applicable provision
without violating the provisions of Section 409A.
(i)For purposes of Section 409A, the Executive’s right to receive any
installment payments pursuant to this Agreement shall be treated as a right to
receive a series of separate and distinct payments.
(ii)The Executive will be deemed to have a Date of Termination for purposes of
determining the timing of any payments or benefits hereunder that are classified
as deferred compensation only upon a “separation from service” within the
meaning of Section 409A.
(iii)Notwithstanding any other provision of this Agreement to the contrary, if
at the time of the Executive’s separation from service, (x) the Executive is a
specified employee (within the meaning of Section 409A and using the
identification methodology selected by the Company from time to time), and
(y) the Company makes a good faith determination that an amount payable on
account of such separation from service to the Executive constitutes deferred
compensation (within the meaning of Section 409A) the payment of which is
required to be delayed pursuant to the six-month delay rule set forth in
Section 409A in order to avoid taxes or penalties under Section 409A (the “Delay
Period”), then the Company will not pay such amount on the otherwise scheduled
payment date but will instead pay it in a lump sum on the first business day
after such six-month period (or upon the Executive’s death, if earlier),
together with interest for the period of delay, compounded annually, equal to
the prime rate (as published in the Wall Street Journal) in effect as of the
dates the payments should otherwise have been provided. To the extent that any
benefits to be provided during the Delay Period are considered deferred
compensation under Section 409A provided on account of a “separation from
service,” and such benefits are not otherwise exempt from Section 409A, the
Executive shall pay the cost of such benefit during the Delay Period, and the
Company shall reimburse the Executive, to the extent that such costs would
otherwise have been paid by the Company or to the extent that such benefits
would otherwise have been provided by the Company at no cost to the Executive,
the Company’s share of the cost of such benefits upon expiration of the Delay
Period, and any remaining benefits shall be reimbursed or provided by the
Company in accordance with the procedures specified herein.
(iv)To the extent necessary to comply with Section 409A, (A) any amount that the
Executive is entitled to be reimbursed under this Agreement will be reimbursed
to the Executive as promptly as practical and in any event not later than the
last day of the calendar year after the calendar year in which the expenses are
incurred, (B) any right to reimbursement or in kind benefits will not be subject
to liquidation or exchange for another benefit, and (C) the amount of the
expenses eligible for reimbursement during any taxable year will not affect the
amount of expenses eligible for reimbursement in any other taxable year.
(v)Whenever a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within
thirty (30) days following the date of termination”), the actual date of payment
within the specified period shall be within the sole discretion of the Company.
No payment subject to the application of Section 409A shall be accelerated,
offset or assigned accept in compliance with all requirements of Section 409A.
8.Confidentiality, Non-Disclosure and Non-Competition Agreement. The Company and
the Executive acknowledge and agree that during the Executive’s employment with
the Company, the Executive will have access to and may assist in developing
Company Confidential Information and will occupy a position of trust and
confidence with respect to the Company’s affairs and business and the affairs
and business of Company Affiliates. For purposes of this Agreement, “Company
Confidential Information” means information known to the Executive to constitute
confidential or proprietary information belonging to the

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Company or Company Affiliates or other non-public information, trade secrets,
intellectual property, confidential financial information, operating budgets,
strategic plans or research methods, personnel data, projects or plans, or
non-public information regarding the terms of any existing or pending
transaction between Company or any Company Affiliate and an existing or pending
client or customer or other person or entity, in each case, received by the
Executive in the course of his employment by the Company or in connection with
his duties with the Company. Notwithstanding anything to the contrary contained
herein, the general skills, knowledge and experience gained during the
Executive’s employment with the Company, information publicly available or
generally known within the industry or trade in which the Company or any Company
Affiliate operates and information or knowledge possessed by the Executive prior
to his employment by the Company, shall not be considered Company Confidential
Information. The Executive agrees that the following obligations are necessary
to preserve the confidential and proprietary nature of Company Confidential
Information and to protect the Company and Company Affiliates against harmful
solicitation of employees and customers, harmful effects on operations and other
actions by the Executive that would result in serious adverse consequences for
the Company and Company Affiliates:
(a)Non-Disclosure.
(i)During and after the Executive’s employment with the Company or Company
Affiliates, the Executive will not knowingly, directly or indirectly through an
intermediary, use, disclose or transfer any Company Confidential Information
other than as authorized in writing by the Company or Company Affiliates, or if
such use, disclosure or transfer is during such employment and within the scope
of the Executive’s duties with the Company or Company Affiliates as determined
reasonably and in good faith by the Executive. Anything herein to the contrary
notwithstanding, the provisions of this Section 8(a) shall not apply (i) when
disclosure is required by law or by any court, arbitrator, mediator or
administrative or legislative body (including any committee thereof) with actual
or apparent jurisdiction to order the Executive to disclose or make accessible
any information; (ii) with respect to any other litigation, arbitration or
mediation involving this Agreement, including, but not limited to, the
enforcement of this Agreement; (iii) as to information that becomes generally
known to the public or within the relevant trade or industry other than due to
the Executive’s violation of this Section 8(a); (iv) as to information that is
or becomes available to the Executive on a non-confidential basis from a source
which is entitled to disclose it to the Executive; or (v) as to information that
the Executive possessed prior to the commencement of employment with the
Company. In the event the Executive is required or compelled by legal process to
disclose any Company Confidential Information, to the extent the Executive is
legally permitted to do so, he will promptly inform the Company so that the
Company may, at its own expense, present and preserve any objections that it may
have to such disclosure and/or seek an appropriate protective order.
Notwithstanding the foregoing, nothing contained in this Agreement shall
prohibit the Executive from reporting possible violations of federal law or
regulation to any governmental agency or entity, including but not limited to
the Department of Justice, the Securities and Exchange Commission, the Congress,
and any agency Inspector General, or making other disclosures that are protected
under the whistleblower provisions of federal law or regulation. The Executive
does not need the prior authorization of AFG’s or AAC’s legal department to make
any such reports or disclosures and the Executive is not required to notify AFG
or AAC that the Executive has made such reports or disclosures.
(ii)Pursuant to 18 U.S.C. § 1833(b), an individual may not be held liable under
any criminal or civil federal or state trade secret law for disclosure of a
trade secret: (A) made in confidence to a government official, either directly
or indirectly, or to an attorney, solely for the purpose of reporting or
investigating a suspected violation of law or (B) in a complaint or other
document filed in a lawsuit or other proceeding, if such filing is made under
seal. Additionally, an individual suing an employer for retaliation

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based on the reporting of a suspected violation of law may disclose a trade
secret to his or her attorney and use the trade secret information in the court
proceeding, so long as any document containing the trade secret is filed under
seal and the individual does not disclose the trade secret except pursuant to
court order.
(b)Materials. The Executive will not remove, directly or indirectly through an
intermediary, any Company Confidential Information or any other property of the
Company or any Company Affiliate from the Company’s or Company Affiliate’s
premises or make copies of such materials except for normal and customary use in
the Company’s or Company Affiliate’s business as determined reasonably and in
good faith by the Executive. The Company acknowledges that the Executive, in the
ordinary course of his duties, routinely uses and stores Company Confidential
Information at home and other locations. The Executive will return to the
Company all Company Confidential Information and copies thereof and all other
property of the Company or any Company Affiliate at any time upon the request of
the Company and in any event promptly after termination of the Executive’s
employment. The Executive agrees to attempt in good faith to identify and return
to the Company any copies of any Company Confidential Information after the
Executive ceases to be employed by the Company. Anything to the contrary
notwithstanding, nothing in this Section 8(b) shall prevent the Executive from
retaining a home computer, papers and other materials of a personal nature,
including diaries, calendars and Rolodexes (including his electronic address
books), information relating to his compensation or relating to reimbursement of
expenses, information that he reasonably believes may be needed for tax
purposes, and copies of plans, programs and agreements relating to his
employment.
(c)No Solicitation or Hiring of Employees. During the period commencing on the
Effective Date and ending twelve (12) months after the Executive’s Date of
Termination (the “Non-Compete Period”), the Executive shall not, directly or
indirectly through an intermediary, solicit, entice, persuade or induce any
individual who is employed by the Company or any Company Affiliate (or who was
so employed within 180 days prior to the Executive’s action, other than any such
individual whose employment was involuntarily terminated by the Company or any
Company Affiliate) to terminate or refrain from continuing such employment or to
become employed by or enter into contractual relations with any other individual
or entity other than the Company or Company Affiliates, and the Executive shall
not hire, directly or indirectly, as an employee, consultant or otherwise, any
such person. Anything to the contrary notwithstanding, the Company agrees that
(i) the Executive’s responding to an unsolicited request from any former
employee of the Company or any Company Affiliate for advice on employment
matters, (ii) the Executive’s responding to an unsolicited request for an
employment reference regarding any former employee of the Company or any Company
Affiliate from such former employee, or from a third party, by providing a
reference setting forth his personal views about such former employee, or
(iii) hiring or retaining any current or former employee or consultant of the
Company or any Company Affiliate who responds to a general advertisement for
employment that was not specifically directed at such employees or consultants
of the Company or any Company Affiliate, shall not be deemed a violation of this
Section 8(c).
(d)Non-Competition. During the Non-Compete Period, the Executive shall not,
directly or indirectly through an intermediary, (A) solicit or encourage any
client or customer of the Company or any Company Affiliate, or any person or
entity who was a client or customer within 180 days prior to Executive’s action,
to terminate, reduce or alter in a manner adverse to the Company or any Company
Affiliate any existing business arrangements with the Company or any Company
Affiliate or to transfer existing business from the Company or any Company
Affiliate to any other person or entity, or (B) without the prior written
consent of the AFG Board and the AAC Board, which consent shall not be
unreasonably withheld, be engaged by, or have a financial or any other interest
in (other than compensatory equity), the portion of any corporation, firm,
partnership, proprietorship or other business entity or enterprise, whether as a
principal, agent, employee,

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director, consultant, stockholder, partner or in any other capacity, which
(x) materially competes with AAC or any Company Affiliate in any business
conducted by AAC or any Company Affiliate as of the Effective Date or in any
business acquired or developed by AAC or any Company Affiliate after the
Effective Date and on or before the Date of Termination that generates
$5,000,000 or more of net income in the fiscal year prior to termination of
employment, provided that in no event shall the above limitations apply to any
money or asset management business, including, without limitation, a private
equity or hedge fund business engaged in management of alternative investments,
or (y) is a financial institution with which the Company or any Company
Affiliate has any active or threatened litigation and the Executive’s role with
such financial institution would involve in a material manner any involvement
with such active or threatened litigation; provided, however, that the Executive
may own, as a passive investor, securities of any such entity that has
outstanding publicly traded securities or is passively owned through an interest
in a hedge fund or private equity fund, so long as his direct holdings in any
such entity shall not in the aggregate constitute more than 5% of the voting
power of such entity and, while employed by AAC does not otherwise violate any
Company or Company Affiliate policy applicable to the Executive. The Executive
agrees that, before providing services, whether as an employee or consultant, to
any entity during the Non-Compete Period, he will provide a copy of this
Agreement to such entity. The Executive acknowledges that this covenant has a
unique, very substantial and immeasurable value to the Company and Company
Affiliates, that the Executive has sufficient assets and skills to provide a
livelihood for the Executive while such covenant remains in force and that, as a
result of the foregoing, in the event that the Executive breaches such covenant,
monetary damages would be an insufficient remedy for the Company and equitable
enforcement of the covenant would be proper.
(e)Compliance with Company’s Policies. The Executive agrees to observe and
comply with the policies and rules of the Company and Company Affiliates unless
such compliance is inconsistent with the terms of this Agreement or applicable
law.
(f)Non-Disparagement. During the period commencing on the Effective Date and
continuing thereafter, the Executive, other than in the good faith performance
of his duties for the Company, shall not initiate, participate or engage in any
communication whatsoever that could reasonably be interpreted as derogatory or
disparaging to the Company or any Company Affiliate, as applicable, including
but not limited to the business, practices, policies, or, as such, shareholders,
partners, members, directors, managers, officers and employees of the Company or
any Company Affiliate. Similarly, the senior executives and directors of the
Company shall not initiate, participate or engage in any communication
whatsoever that could reasonably be interpreted as derogatory or disparaging to
the Executive. The foregoing shall not be violated by (i) truthful statements by
the Executive or the senior executives or directors of the Company in response
to legal process, required governmental testimony or filings, or administrative
or arbitral proceedings (including, without limitation, depositions in
connection with such proceedings) or (ii) the Executive or the senior executives
and directors of the Company rebutting false or misleading statements made by
others.
(g)Publicity. During the Employment Period, the Executive hereby grants to the
Company the right to use, in a reasonable and appropriate manner, the
Executive’s name and likeness, without additional consideration, on, in and in
connection with technical, marketing or disclosure materials, or any combination
thereof, published by or for the Company or any Company Affiliate, and any
documents or other matters to the extent legally required. If, in connection
with the Executive’s hiring by the Company or termination of employment with the
Company, the Company determines to issue a press release, the Company agrees to
consult with the Executive in good faith as to the wording of the press release.
(h)Cooperation. The parties agree that certain matters in which the Executive
will be involved during the Employment Period may necessitate the Executive’s
cooperation in the future. Accordingly, during the five-year period following
the termination of the Executive’s employment for any

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reason, to the extent reasonably requested by AFG or AAC, the Executive shall
cooperate with the Company, Company Affiliates and its or their counsel,
including information requests relating to the business or affairs of the
Company, as well as any investigation, litigation, arbitration or other
proceeding related to the business or affairs of the Company, other than in
connection with any dispute between the Executive and the Company or any Company
Affiliate; provided that, the Company shall make reasonable efforts to minimize
disruption of the Executive’s business or personal affairs, including limiting
Executive’s travel to the extent reasonably possible. The cooperation includes
the Executive making himself available for reasonable periods of time (with due
regard for his other commitments) upon reasonable notice to the Executive in any
such litigation or investigation and providing testimony before or during such
litigation or investigation. The Company shall reimburse the Executive for
reasonable out-of-pocket expenses incurred in connection with such cooperation
(including legal counsel selected by the Executive and reasonably acceptable to
the Company); provided that, if the Company requires the Executive to devote
significant time to such cooperation, the Company and the Executive will
establish in good faith a reasonable hourly or daily rate for the time spent by
the Executive on such cooperation, based on the Executive’s Base Salary as of
the termination date.
(i)Enforcement. The Executive acknowledges that in the event of any breach of
this Section 8, the business interests of the Company and the Company Affiliates
will be irreparably injured, the full extent of the damages to the Company and
the Company Affiliates will be impossible to ascertain, monetary damages will
not be an adequate remedy for the Company and the Company Affiliates, and the
Company will be entitled to enforce this Agreement by a temporary, preliminary
and/or permanent injunction or other equitable relief, without the necessity of
posting bond or security, which the Executive expressly waives. The Company and
the Company Affiliates each acknowledge that in the event of any breach of this
Agreement, the interests of the Executive will be irreparably injured, the full
extent of damages to the Executive will be impossible to ascertain, monetary
damages will not be an adequate remedy for the Executive, and the Executive will
be entitled to enforce this Agreement by a temporary, preliminary and/or
permanent injunction or other equitable relief, without the necessity of posting
bond or security, which the Company expressly waives. The Company and the
Executive each understand that the other may waive some of the requirements
expressed in this Agreement, but that such a waiver to be effective must be made
in writing and should not in any way be deemed a waiver of the right of either
party to enforce any other requirements or provisions of this Agreement. The
Company and the Executive agree that each of their obligations specified in this
Agreement are separate and independent covenants and that the unenforceability
of any of them shall not preclude the enforcement of any other covenants in this
Agreement. The Executive further agrees that any breach of this Agreement by the
Company prior to the Date of Termination shall not release the Executive from
compliance with his obligations under this Section 8, as long as the Company
fully complies with Sections 7 and 10. The Company further agrees that any
breach during the Employment Period of this Agreement by the Executive that does
not result in the Executive being terminated for Cause shall not release the
Company from compliance with its obligations under this Agreement.
Notwithstanding the foregoing two sentences, neither the Company nor the
Executive shall be precluded from pursuing judicial remedies as a result of any
such breaches.
(j)Severability. If any of the restrictions or obligations contained in
Section 8 shall be determined by any court of competent jurisdiction to be
unenforceable by reason of their extending for too great a period of time or
over too great a geographical area or by reason of their being too extensive in
any other respect, such provision shall be modified to be effective for the
maximum period of time for which it may be enforceable and over the maximum
geographical area as to which it may be enforceable and to the maximum extent in
all other respects as to which it may be enforceable.

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9.Section 280G. If any payment or benefit (including payments and benefits
pursuant to this Agreement) that the Executive would receive in connection with
a transaction (“Transaction Payment”) would (i) constitute a “parachute payment”
within the meaning of Section 280G of the Code, and (ii) but for this Section 9,
be subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then the Company shall cause to be determined, before any amounts of the
Transaction Payment are paid to the Executive, which of the following two
alternative forms of payment would result in the Executive’s receipt, on an
after-tax basis, of the greater amount of the Transaction Payment
notwithstanding that all or some portion of the Transaction Payment may be
subject to the Excise Tax: (1) payment in full of the entire amount of the
Transaction Payment (a “Full Payment”), or (2) payment of only a part of the
Transaction Payment so that the Executive receives the largest payment possible
without the imposition of the Excise Tax (a “Reduced Payment”).
For purposes of determining whether to make a Full Payment or a Reduced Payment,
the Company shall cause to be taken into account all applicable federal, state
and local income and employment taxes and the Excise Tax. If a Reduced Payment
is made, (x) the Executive shall have no rights to any additional payments
and/or benefits constituting the Transaction Payment, and (y) reduction in
payments and/or benefits shall occur in the manner that results in the greatest
economic benefit to the Executive as determined in this paragraph. If more than
one method of reduction will result in the same economic benefit, the portions
of the Transaction Payment shall be reduced pro rata.
The independent registered public accounting firm engaged by AFG as of the day
prior to the effective date of the transaction shall make all determinations
required to be made under this Section 9. If the independent registered public
accounting firm so engaged by AFG is serving as accountant or auditor for the
individual, entity or group effecting the transaction, AFG shall appoint a
nationally recognized independent registered public accounting firm that is
reasonably acceptable to the Executive (and such acceptance shall not be
unreasonably withheld) to make the determinations required hereunder. The
Company shall bear all reasonable expenses with respect to the determinations by
such independent registered public accounting firm required to be made
hereunder. The independent registered public accounting firm engaged to make the
determinations hereunder shall provide its calculations, together with detailed
supporting documentation, to the Company and the Executive within
fifteen (15) calendar days after the date on which the Executive’s right to a
Transaction Payment is triggered or such other time as reasonably requested by
the Company or the Executive. If the independent registered public accounting
firm determines that no Excise Tax is payable with respect to the Transaction
Payment, either before or after the application of the Reduced Amount, it shall
furnish the Company and the Executive with detailed supporting calculations of
its determinations that no Excise Tax will be imposed with respect to such
Transaction Payment. Any good faith determinations of the accounting firm made
hereunder shall be final, binding and conclusive upon the Company and the
Executive.
10.Indemnification. The Company shall indemnify the Executive to the maximum
extent that its officers and employees are entitled to indemnification pursuant
to the Company’s certificate of incorporation and bylaws (which shall not be
less than currently exists, except as required by applicable law), subject to
applicable law, and such indemnification shall continue after termination of
employment with regard to actions or inactions prior to termination at a level
that is no less than currently exists for officers and employees under the
Company’s certificate of incorporation and bylaws, subject to applicable law. In
addition, both during the Employment Period and following his termination of
employment, the Executive shall be entitled to liability insurance coverage
pursuant to any directors’ and officers’ liability insurance policy maintained
by AFG or AAC as of the Effective Date or put in place following the Effective
Date on

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the same basis as other current or former officers of AFG and AAC with regard to
actions or inactions during the period of service as an officer notwithstanding
any ceasing of such service.
11.Legal Fees Incurred in Negotiating the Agreement. The Company shall pay or
the Executive shall be reimbursed for the Executive’s reasonable legal fees and
costs incurred in connection with this Agreement up to a maximum of $25,000. Any
payment required under this Section 11 shall be made within thirty (30) days
following the Effective Date but in no event later than March 15 of the calendar
year immediately following the Effective Date.
12.Notices. All notices, demands, requests, or other communications which may be
or are required to be given or made by any party to any other party pursuant to
this Agreement shall be in writing and shall be hand delivered, electronically
mailed, mailed by first-class registered or certified mail, return receipt
requested, postage prepaid, or delivered by overnight air courier, addressed as
follows:
(i)
If to AFG or AAC, to both:

Ambac Financial Group, Inc.
One World Trade Center
41st Floor
New York, New York 10007
Attn: General Counsel
And
Ambac Assurance Corporation
One World Trade Center
41st Floor
New York, New York 10007
Attn: General Counsel
with email to the General Counsel’s Company email address;
(ii)
If to the Executive:

To his office or email address at the Company (so long as the Executive is then
still a Company service provider) or to the address and/or personal email
address last shown on the Company’s records
Each party may designate by notice in writing a new address or email address to
which any notice, demand, request or communication may thereafter be so given,
served or sent. Each notice, demand, request, or communication that shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes at such time as it is delivered to the addressee (with
the return receipt, the delivery receipt, email sent time-stamp, or the
affidavit of messenger being deemed conclusive but not exclusive evidence of
such delivery) or at such time as delivery is refused by the addressee upon
presentation.
13.Severability. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or enforceability of
the other provisions of this Agreement, which shall remain in full force and
effect.
14.Effect on Other Agreements. This Agreement constitutes the entire agreement
between the parties respecting the employment of the Executive and supersedes
all prior and contemporaneous

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understandings, agreements, representations and warranties, both written and
oral, with respect to such subject matter.
15.Survival. It is the express intention and agreement of the parties hereto
that the provisions of Sections 4(f), 7, 8, 9, 10, 12, 13, 14, 16, 17, 18, 20,
21 and 23 hereof and this Section 15 shall survive the termination of employment
of the Executive.
16.Assignment. The rights and obligations of the parties to this Agreement shall
not be assignable or delegable, except that (i) in the event of the Executive’s
death, the personal representative or legatees or distributees of the
Executive’s estate, as the case may be, shall have the right to receive any
amount owing and unpaid to the Executive hereunder, (ii) the rights and
obligations of the Company hereunder shall be assignable and delegable in
connection with any subsequent merger, consolidation, sale of all or
substantially all of the assets or equity interests of the Company or similar
transaction involving the Company or a successor entity, and (iii) the rights
and obligations of the Company hereunder shall be assignable and delegable to
AFG and/or AAC. The Company shall require any successor to the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
17.Binding Effect. Subject to any provisions hereof restricting assignment, this
Agreement shall be binding upon the parties hereto and shall inure to the
benefit of the parties and their respective heirs, devisees, executors,
administrators, legal representatives and permitted successors and assigns.
18.Amendment; Waiver. This Agreement shall not be amended, altered or modified
except by an instrument in writing duly executed by the party against whom
enforcement is sought. Neither the waiver by either of the parties hereto of a
breach of or a default under any of the provisions of this Agreement, nor the
failure of either of the parties, on one or more occasions, to enforce any of
the provisions of this Agreement or to exercise any right or privilege
hereunder, shall thereafter be construed as a waiver of any subsequent breach or
default of a similar nature, or as a waiver of any such provisions, rights or
privileges hereunder.
19.Headings. Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
20.Governing Law. This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed in accordance with the laws of the State of New York (but not
including any choice of law rule thereof that would cause the laws of another
jurisdiction to apply).
21.Arbitration. Any dispute, controversy or claim arising out of or related to
this Agreement or any breach of this Agreement shall be submitted to and decided
by binding arbitration in the County of New York, New York before a single
arbitrator selected jointly by the parties, or, if the parties cannot agree on
the selection of the arbitrator, as selected by the American Arbitration
Association. Arbitration shall be administered exclusively by the American
Arbitration Association and shall be conducted in accordance with the rules for
the resolution of employment disputes (previously titled the National Rules for
the Resolution of Employment Disputes) as well as any requirements imposed by
state law. Any arbitral award determination shall be final and binding upon the
parties.
22.Counterparts. This Agreement may be executed in two counterparts, each of
which shall be an original and all of which shall be deemed to constitute one
and the same instrument.

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23.Withholding. The Company may withhold from any benefit payment or any other
payment or amount under this Agreement all federal, state, city or other taxes
as shall be required pursuant to any law or governmental regulation or ruling.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement, or have caused this Agreement to be duly executed and delivered on
their behalf.

AMBAC FINANCIAL GROUP, INC.

/s/ Stephen M. Ksenak_
Stephen M. Ksenak
Senior Managing Director and General Counsel

AMBAC ASSURANCE CORPORATION

/s/ Stephen M. Ksenak_
Stephen M. Ksenak
Senior Managing Director and General Counsel

EXECUTIVE

/s/ Claude LeBlanc_
Claude LeBlanc

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EXHIBIT A
General Release of Claims
Consistent with Section 7 of the Amended and Restated Employment Agreement dated
February 27, 2020, among me, Ambac Financial Group, Inc. and Ambac Assurance
Corporation (the “Amended and Restated Employment Agreement”) and in
consideration for and contingent upon my receipt of the Accrued Benefits and the
Severance Payments set forth in Section 7 of the Amended and Restated Employment
Agreement, I, for myself, my attorneys, heirs, executors, administrators,
successors, and assigns, do hereby fully and forever release and discharge Ambac
Financial Group, Inc. and Ambac Assurance Corporation (together, “Ambac”) and
their past, current and future affiliated entities, as well as their
predecessors, successors, assigns, and their past, current and former directors,
officers, partners, agents, employees, attorneys, and administrators from all
suits, causes of action, and/or claims, demands or entitlements of any nature
whatsoever, whether known, unknown, or unforeseen, which I have or may have
against any of them arising out of or in connection with my employment by Ambac,
the Amended and Restated Employment Agreement, the termination of my employment
with Ambac, or any event, transaction, or matter occurring or existing on or
before the date of my signing of this General Release related to Ambac, except
that I am not releasing (i) any claims arising under Section 10 of the Amended
and Restated Employment Agreement, any other right to indemnification or
director and officer liability insurance coverage that I may otherwise have,
(ii) any claims that I may have to vested payments or benefits pursuant to the
Amended and Restated Employment Agreement or any plan, program or arrangement of
Ambac in which I participated, (iii) any claims relating to any rights I may
have to payments pursuant to Section 7 of the Amended and Restated Employment
Agreement, (iv) any claims relating to any rights I may have pursuant to equity
and equity-based awards granted to me by Ambac, provisions of the Amended and
Restated Employment Agreement that survive termination of employment, (v) any
claims made under state unemployment compensation insurance or workers
compensation laws and/or any claims that cannot be waived by law, or (vi) any
claims arising after the date of my signing this General Release. I agree not to
file or otherwise institute any claim, demand or lawsuit seeking damages or
other relief and not to otherwise assert any claims, demands or entitlements
that are released herein. I further hereby irrevocably and unconditionally waive
any and all rights to recover any relief or damages concerning the claims,
demands or entitlements that are released herein. I represent and warrant that I
have not previously filed or joined in any such claims, demands or entitlements
against Ambac or the other persons or entities released herein and that I will
indemnify and hold them harmless from all liabilities, claims, demands, costs,
expenses and/or attorney’s fees incurred as a result of any such claims, demands
or lawsuits.
This General Release specifically includes, but is not limited to, all claims of
breach of contract, employment discrimination (including any claims coming
within the scope of Title VII of the Civil Rights Act, the Age Discrimination in
Employment Act, the Older Workers Benefit Protection Act, the Equal Pay Act, the
Americans with Disabilities Act, and the Family and Medical Leave Act, all as
amended, or any other applicable federal, state, or local law), claims under the
Employee Retirement Income Security Act, as amended, claims under the Fair Labor
Standards Act, as amended (or any other applicable federal, state or local
statute relating to payment of wages), wage orders, claims concerning
recruitment, hiring, termination, salary rate, severance pay, stock options,
wages or benefits due, sick leave, holiday pay, vacation pay, life insurance,
group medical insurance, any other fringe benefits, worker’s compensation,
termination, employment status, libel, slander, defamation, intentional or
negligent misrepresentation and/or infliction of emotional distress, together
with any and all tort, contract, or other claims which might have been asserted
by me or on my behalf in any suit, charge of discrimination, or claim against
Ambac or the persons or entities released herein.

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Ambac and I acknowledge that different or additional facts may be discovered in
addition to what we now know or believe to be true with respect to the matters
released in this General Release, and we agree that this General Release shall
be and remain in effect in all respects as a complete and final release of the
matters released, notwithstanding any different or additional facts.
Claims Excluded from this Release: However, notwithstanding the foregoing,
nothing in this General Release shall be construed to waive any right that is
not subject to waiver by private agreement, including, without limitation, any
claims arising under state unemployment insurance or workers compensation laws.
I understand that rights or claims under the Age Discrimination in Employment
Act that may arise after I execute this General Release are not waived.
Likewise, nothing in this General Release shall be construed to prohibit me from
filing a charge with or participating in any investigation or proceeding
conducted by the SEC, EEOC, NLRB, or any comparable state or local agency.
Notwithstanding the foregoing, to the extent that Ambac makes any claims against
me, nothing in this General Release shall be construed to prohibit me from
asserting counterclaims, making cross-claims, or otherwise defending myself, in
any case solely with respect to such claims.
I acknowledge that I have been given an opportunity of [twenty-one (21)] days to
consider this General Release and that I have been encouraged by Ambac to
discuss fully the terms of this General Release with legal counsel of my own
choosing. Moreover, for a period of seven (7) days following my execution of
this General Release, I shall have the right to revoke the waiver of claims
arising under the Age Discrimination in Employment Act, a federal statute that
prohibits employers from discriminating against employees who are age 40 or
over. If I elect to revoke this General Release in whole or in part within this
seven-day period, I must inform Ambac by delivering a written notice of
revocation to Ambac’s General Counsel, One World Trade Center , New York, New
York 10007, no later than 11:59 p.m. on the seventh calendar day after I sign
this General Release. I understand that, if I elect to exercise this revocation
right, this General Release shall be voided in its entirety at the election of
Ambac and Ambac shall be relieved of all obligations to make the Severance
Payments described in Section 7 of the Amended and Restated Employment
Agreement. I may, if I wish, elect to sign this General Release prior to the
expiration of the 21-day consideration period, and I agree that if I elect to do
so, my election is made freely and voluntarily and after having an opportunity
to consult counsel. I understand that nothing herein prevents me from
challenging the validity of my release with respect to the Age Discrimination in
Employment Act and the Older Workers Benefit Protection Act, in each case, as
amended, although I acknowledge and I agree that I intend that this General
Release act as a full release under those statutes.

AGREED: _________________________    DATE:_________________________

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