Directors' Compensation Table


 EXHIBIT 10.04 
  
 AMBAC FINANCIAL GROUP, INC. 
 DIRECTORS COMPENSATION TABLE * 
  
 EFFECTIVE AS OF JANUARY 1, 2004 
  

							
	 TYPE OF FEE

	  	AMOUNT

	 	 	 MANNER OF PAYMENT


			
	Annual Fees/Awards	  	 	 	 	 	 
			
	 •      Annual fee for serving as a director of Ambac Financial Group, Inc.
	  	$	45,000	**	 	$45,000 payable quarterly in arrears in cash
			
	 •      Annual fee for serving as a director of Ambac Assurance Corporation
	  	 	None	 	 	 
			
	 •      Annual fee for chairing a committee of Ambac Financial Group, Inc. or Ambac Assurance
Corporation
	  	$	10,000	 	 	Payable quarterly in arrears in cash
			
	Meeting Fees	  	 	 	 	 	 
			
	 •      Annual fee for serving as a committee member of the Audit Committee
	  	$	10,000	 	 	Payable quarterly in arrears in cash
			
	 •      Annual fee for serving as a committee member of the Compensation Committee
	  	$	5,000	 	 	Payable quarterly in arrears in cash
			
	 •      Annual fee for serving as a committee member of the Governance Committee
	  	$	5,000	 	 	Payable quarterly in arrears in cash
			
	 •      Travel and related expenses incurred in attending a stockholder, board or committee
meeting
	  	 
 
 	100% of
expenses
incurred	 
 
 	 	Payable in cash promptly upon submission of receipts to the Ambac Financial Group, Inc. Corporate Secretary
			
	Non-Executive Chairman Retainer Fee	  	 	 	 	 	 
			
	 •      Annual retainer fee for the Chairman of the Board
	  	$	250,000	 	 	Payable in arrears in cash



	*	Directors who are employees of Ambac Financial Group, Inc. and its affiliates are not paid any fees or other compensation for serving as directors, but are reimbursed for travel and
related expenses incurred in attending meetings.  

  

	**	The cash portion of the annual fee is prorated to reflect service on the Board of less than one full year prior to the relevant annual meeting of stockholders.


  








 AMBAC FINANCIAL GROUP, INC. 

DIRECTORS COMPENSATION TABLE  
  
 TO BECOME EFFECTIVE AS OF MAY 4, 2004 
 (CONTINUED PAGE 2 OF 2) 
  

					
	 TYPE OF FEE

	  	AMOUNT

	 	 MANNER OF PAYMENT


			
	Stock Awards	  	 	 	 
			
	 •      Annual Award of Restricted Units of Common Stock (RSUs)
	  	Value of $60,000
RSUs on date of
the Annual
Meeting  
	 	 •      The value of $60,000 of RSUs will be awarded annually on the date
of the annual meeting of stockholders. The number of RSUs shall be equal to $60,000 divided by the average of the high and low selling price of Ambac’s Common Stock on the NYSE on the date of the Annual Meeting.
  
 •      The RSUs
vest on the first anniversary of the grant

			
	 •      Five-year Award of RSUs
	  	Value of
$210,000 RSUs
on date of
Annual Meeting
(only granted
once every 5
years)	 	 •      The value of $210,000 of RSUs are awarded on the date of the
annual meeting of stockholders coincident with, or first succeeding the director’s election to the Ambac Financial Group, Inc. Board. The number of RSUs shall be equal to $210,000 divided by the average of the high and low selling price of
Ambac’s Common Stock on the NYSE on the date of the Annual Meeting.
  
 •      These RSUs vest on the date of the annual meeting held in the fifth year following the
date of grant
  
 •      Assuming the director remains on the Board following vesting, he or she will be awarded an additional $210,000 in RSUs
  
 •      RSUs are awarded under the 1997 Non-Employee Directors
Plan, as amended


  

			
	 OTHER BENEFITS

	  	 DESCRIPTION


	 •      Deferred compensation
	  	Under the Deferred Compensation Plan for Outside Directors and Eligible Senior Officers, non-employee directors may elect to defer all or part of their director compensation
(including both annual and meeting fees) that is paid in cash
		
	 •      Health and welfare
	  	Each non-employee director is permitted to enroll (without paying any premium) in the Ambac Financial Group, Inc. medical and dental plan and is eligible to receive a $50,000 term life
insurance policy (without paying any premium)