# EDGAR Filing Document

**Accession Number:** 0000874501
**File Stem:** 0001628280-25-043138
**Filing Date:** 2025-9
**Character Count:** 378536
**Document Hash:** 61918f589d3c670354156947dcf04608
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628280-25-043138.hdr.sgml**: 20250929

**ACCESSION NUMBER**: 0001628280-25-043138

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 19

**CONFORMED PERIOD OF REPORT**: 20250929

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20250929

**DATE AS OF CHANGE**: 20250929

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** AMBAC FINANCIAL GROUP INC
- **CENTRAL INDEX KEY:** 0000874501
- **STANDARD INDUSTRIAL CLASSIFICATION:** SURETY INSURANCE [6351]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 133621676
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-10777
- **FILM NUMBER:** 251357171

**BUSINESS ADDRESS:**
- **STREET 1:** ONE WORLD TRADE CENTER
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10007
- **BUSINESS PHONE:** 2126587470

**MAIL ADDRESS:**
- **STREET 1:** ONE WORLD TRADE CENTER
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10007

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** AMBAC INC /DE/
- **DATE OF NAME CHANGE:** 19930328

?xml version='1.0' encoding='ASCII'? ambc-20250929

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

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| | |
|:---|:---|
| **FORM** | **8-K** |

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**CURRENT REPORT**

**PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**Date of Report (Date of earliest event reported): September 26, 2025**

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| |
|:---|
| Ambac Financial Group, Inc. |
| **(Exact name of Registrant as specified in its charter)** |

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| | | |
|:---|:---|:---|
| **Delaware** | **1-10777** | **13-3621676** |
| **(State of incorporation)** | **(Commission<br>file number)** | **(I.R.S. employer<br>identification no.)** |

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| | | | |
|:---|:---|:---|:---|
| **One World Trade Center** | **New York** | **NY** | **10007** |
| **(Address of principal executive offices)** | **(Address of principal executive offices)** | **(Address of principal executive offices)** | **(Address of principal executive offices)** |

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| | |
|:---|:---|
| **(212)** | **658-7470** |
| **(Registrant's telephone number, including area code)** | **(Registrant's telephone number, including area code)** |

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act(17 CFR 240.13e-4c))

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| | | |
|:---|:---|:---|
| Securities registered pursuant to Section 12(b) of the Act: | Securities registered pursuant to Section 12(b) of the Act: | Securities registered pursuant to Section 12(b) of the Act: |
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which registered** |
| Common stock, par value $0.01 per share | AMBC | New York Stock Exchange |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).

Emerging growth company ☐

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| | |
|:---|:---|
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to |
| Section 13(a) of the Exchange Act. | ☐ |

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**Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers**

***Executive Employment Agreements***

On September 29, 2025 (the "Effective Date"), Ambac Financial Group, Inc. (the "Company") entered into new employment agreements with Claude LeBlanc, the Company's President and Chief Executive Officer, David Trick, the Company's Executive Vice President, Chief Financial Officer and Treasurer, and R. Sharon Smith, the Company's Executive Vice President and Group Chief Operating Officer. The terms of the employment agreements are set forth below.

<u>LeBlanc Employment Agreement</u>

The Company's employment agreement with Mr. LeBlanc (the "LeBlanc Employment Agreement") relates to the continuation of his role as President and Chief Executive Officer and director of the Company and waiver and release of the Company from any claim of "Good Reason" under his amended and restated employment agreement dated August 3, 2020 (the "Prior LeBlanc Employment Agreement"). Under the LeBlanc Employment Agreement, Mr. LeBlanc is also entitled to receive the grant of one-time special awards as set forth in more detail below. The LeBlanc Employment Agreement supersedes in its entirety the Prior LeBlanc Employment Agreement.

The term of the LeBlanc Employment Agreement begins on the Effective Date and ends on the first anniversary of the Effective Date, and on each annual anniversary thereafter, the LeBlanc Employment Agreement will be deemed automatically extended upon the same terms and conditions for successive one-year periods, unless either the Company or Mr. LeBlanc provides written notice of an intention not to extend the term at least 90 days prior to the applicable renewal date.

The LeBlanc Employment Agreement provides for (i) an annual base salary of $900,000 per calendar year, (ii) a target annual bonus opportunity of 125% of base salary, (iii) continued eligibility to participate in the Company's 2024 Incentive Compensation Plan (including any successor plan, the "Incentive Plan"), with a target annual long-term incentive award beginning in calendar year 2026 of $2,650,000 and (iv) continued eligibility to participate in all employee benefit plans, practices and program maintained by the Company that are generally made available to senior executives of the Company.

In addition, the LeBlanc Employment Agreement provides for the grant of one-time special awards as follows: (1) no later than 30 days following the effective date, a grant of $900,000 cash (the "LeBlanc Special Cash Award"), which LeBlanc Special Cash Award shall be subject to forfeiture, clawback and recovery in the event of Mr. LeBlanc's termination for "Cause" (as defined in the LeBlanc Employment Agreement) or Mr. LeBlanc's voluntary termination without "Good Reason" (as defined in the LeBlanc Employment Agreement) within the first 12 months after the grant; (2) on the Effective Date (or, if later, during the first open window on which equity awards can be made following the Effective Date), an award of restricted stock units with a grant date value of $2,100,000, which award shall vest in full on the first anniversary of the grant date (such award, the "LeBlanc Special RSU Award"); and (3) on the Effective Date (or, if later, during the first open window on which equity awards can be made following the Effective Date) a performance stock option award for 500,000 shares of the Company's common stock, with an exercise price based on the Company's closing price on the date of grant and vesting subject to completion of a one-year service condition and achievement of the following share price hurdles: 40% of the award will vest if the Company's stock price exceeds $18.00 per share; 20% of the award will vest if the Company's stock price exceeds $21.50 per share; 20% of the award will vest if the Company's stock price exceeds $25.00 per share; and 20% of the award will vest if the Company's stock price exceeds $30.00 per share, in each case based on a 30-day VWAP and exceeding the applicable share price threshold for 60 trading days (such award, the "LeBlanc Special PSO Award" and, together with the LeBlanc Special Cash Award and the LeBlanc Special RSU Award, the "LeBlanc Special Awards"). The performance stock options have a 10-year contract term.

If Mr. LeBlanc's employment is terminated due to death or disability, he would receive his base salary due through the date of termination, any "Accrued Benefits" (as defined in the LeBlanc Employment Agreement), and a pro-rated annual bonus for the year of termination based on actual performance through the full performance period. In addition, Mr. LeBlanc would receive 100% accelerated vesting on all unvested restricted stock unit awards, performance share unit awards and unvested stock options (with performance awards settling based on the greater of target and actual performance through the termination date), any repayment obligation on the LeBlanc Special Cash Award would lapse (in the case of death only, the holding period of the LeBlanc Special RSU Award and the service condition for the LeBlanc Special PSO Award would be deemed satisfied on the termination date, and the LeBlanc Special PSO Award could continue to vest if the price hurdles are met and any other outstanding RSU or PSU awards would immediately vest (with PSU awards settling in full based on the greater of target or actual performance (if measurable) through the date of termination).

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If Mr. LeBlanc's employment is terminated by the Company for "Cause" (as defined in the LeBlanc Employment Agreement), or if he resigns without "Good Reason" (as defined in the LeBlanc Employment Agreement), or his employment is terminated due to the non-renewal of the LeBlanc Employment Agreement by Mr. LeBlanc without Good Reason, he would receive his base salary and any Accrued Benefits through the date of termination; provided that his 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. In any such termination happens within 12 months of the grant of the LeBlanc Special Awards, the full amount of the LeBlanc Special Awards will be forfeited.

If Mr. LeBlanc's employment is terminated by the Company other than for "Cause" or if he resigns for "Good Reason," or his employment is terminated due to the non-renewal of the LeBlanc Employment Agreement by the Company without Cause, Mr. LeBlanc would be entitled to receive (i) his base salary and any Accrued Benefits through the date of termination, (ii) a lump sum payment equal to two (2) times the sum of (a) one year's base salary and (b) the amount of the annual target bonus for the calendar year in which the date of termination occurs or, if not approved for the year of termination, the amount of the target bonus for the immediately preceding year ("LeBlanc Target Bonus"), and (iii) a lump sum payment equal to his annual bonus based on actual performance through the full performance period, pro-rated to reflect the time of service for such year through the date of termination, and (iv) for up to twelve (12) months following the date of termination, receive customary outplacement services provided to senior executives of the Company. To the extent that Mr. LeBlanc properly elects to continue health care coverage under COBRA, he and his eligible dependents would also continue to participate in the Company's basic medical and life insurance programs for 24 months (subject to earlier discontinuation in certain circumstances). In addition, any repayment obligation for the LeBlanc Special Cash Award shall lapse, the holding period of the LeBlanc Special RSU Award and the service condition for the LeBlanc Special PSO Award would be deemed satisfied on the termination date, and the LeBlanc Special PSO Award could continue to vest if the price hurdles are met.

If Mr. LeBlanc's employment is terminated by the Company other than for "Cause" or his employment is terminated due to the non-renewal of the LeBlanc Employment Agreement (unless coincidental with a termination for Cause) or if he resigns for "Good Reason," in either case in contemplation of and no more than 90 days prior to, or within one year following, a Change in Control (as defined in the LeBlanc Employment Agreement), he would be entitled to receive the same compensation described in the paragraph above; provided, that (i) he will be entitled to receive a lump sum equal to 2.5 times the sum of one year's base salary and the LeBlanc Target Bonus (rather than two times), (ii) his pro-rated lump sum annual bonus will be based on target rather than based on actual performance and (iii) to the extent not assumed, replaced or continued, his time-based restricted unit awards shall immediately vest in full (without proration) and his performance share unit awards shall immediately vest (without proration) based on the greater of the target or actual performance (or, if the Incentive Plan or the applicable award agreement provide more favorable treatment, the treatment provided in the Incentive Plan or such award agreement).

<u>Trick Employment Agreement</u>

The Company's employment agreement with Mr. Trick (the "Trick Employment Agreement") relates to the continuation of his role as Executive Vice President, Chief Financial Officer and Treasurer of the Company and waiver and release of the Company from any claim of "Good Reason" under his amended and restated employment agreement dated November 1, 2016 (the "Prior Trick Employment Agreement"). Under the Trick Employment Agreement, Mr. Trick is also entitled to receive the grant of one-time special awards as set forth in more detail below. The Trick Employment Agreement supersedes in its entirety the Prior Trick Employment Agreement.

The term of the Trick Employment Agreement begins on the Effective Date and ends on the first anniversary of the Effective Date, and on each annual anniversary thereafter, the Trick Employment Agreement will be deemed automatically extended upon the same terms and conditions for successive one-year periods, unless either the Company or Mr. Trick provides written notice of an intention not to extend the term at least 90 days prior to the applicable renewal date.

The Trick Employment Agreement provides for (i) an annual base salary of $600,000 per calendar year, (ii) a target annual bonus opportunity of 70% of base salary, (iii) continued eligibility to participate in the Company's 2024 Incentive Compensation Plan (including any successor plan, the "Incentive Plan"), with a target annual long-term incentive award beginning in calendar year 2026 of $700,000 and (iv) continued eligibility to participate in all employee benefit plans, practices and program maintained by the Company that are generally made available to senior executives of the Company.

In addition, the Trick Employment Agreement provides for the grant of one-time special awards as follows: (1) no later than 30 days following the effective date, a grant of $600,000 cash (the "Trick Special Cash Award"), which Trick Special Cash Award shall be subject to forfeiture, clawback and recovery in the event of Mr. Trick's termination for "Cause" (as defined in the Trick Employment Agreement) or Mr. Trick's voluntary termination without "Good Reason" (as defined in the Trick Employment Agreement) within the first 12 months after the grant; (2) on the Effective Date (or, if later, during the first open window on which equity awards can be made following the Effective Date), an award of restricted stock units with a grant date value of

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$600,000, which award shall vest in full on the first anniversary of the grant date (such award, the "Trick Special RSU Award"); and (3) on the Effective Date (or, if later, during the first open window on which equity awards can be made following the Effective Date) a performance stock option award for 350,375 shares of the Company's common stock, with an exercise price based on the Company's closing price on the date of grant and vesting subject to completion of a one-year service condition and achievement of the following share price hurdles: 40% of the award will vest if the Company's stock price exceeds $18.00 per share; 20% of the award will vest if the Company's stock price exceeds $21.50 per share; 20% of the award will vest if the Company's stock price exceeds $25.00 per share; and 20% of the award will vest if the Company's stock price exceeds $30.00 per share, in each case based on a 30-day VWAP and exceeding the applicable share price threshold for 60 trading days (such award, the "Trick Special PSO Award" and, together with the Trick Special Cash Award and the Trick Special RSU Award, the "Trick Special Awards"). The performance stock options have a 10-year contract term.

If Mr. Trick's employment is terminated due to death or disability, he would receive his base salary due through the date of termination, any "Accrued Benefits" (as defined in the Trick Employment Agreement), and a pro-rated annual bonus for the year of termination based on actual performance through the full performance period. In addition, Mr. Trick would receive 100% accelerated vesting on all unvested restricted stock unit awards, performance share unit awards and unvested stock options (with performance awards settling based on the greater of target and actual performance through the termination date), any repayment obligation on the Trick Special Cash Award would lapse (in the case of death only, the holding period of the Trick Special RSU Award and the service condition for the Trick Special PSO Award would be deemed satisfied on the termination date, and the Trick Special PSO Award could continue to vest if the price hurdles are met and any other outstanding RSU or PSU awards would immediately vest (with PSU awards settling in full based on the greater of target or actual performance (if measurable) through the date of termination).

If Mr. Trick's employment is terminated by the Company for "Cause" (as defined in the Trick Employment Agreement), or if he resigns without "Good Reason" (as defined in the Trick Employment Agreement), or his employment is terminated due to the non-renewal of the Trick Employment Agreement by Mr. Trick without Good Reason, he would receive his base salary and any Accrued Benefits through the date of termination; provided that his 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. In any such termination happens within 12 months of the grant of the Trick Special Awards, the full amount of the Trick Special Awards will be forfeited.

If Mr. Trick's employment is terminated by the Company other than for "Cause" or if he resigns for "Good Reason," or his employment is terminated due to the non-renewal of the Trick Employment Agreement by the Company without Cause, Mr. Trick would be entitled to receive (i) his base salary and any Accrued Benefits through the date of termination, (ii) a lump sum payment equal to 1.5 times the sum of (a) one year's base salary and (b) the amount of the annual target bonus for the calendar year in which the date of termination occurs or, if not approved for the year of termination, the amount of the target bonus for the immediately preceding year ("Trick Target Bonus"), and (iii) a lump sum payment equal to his annual bonus based on actual performance through the full performance period, pro-rated to reflect the time of service for such year through the date of termination, and (iv) for up to twelve (12) months following the date of termination, receive customary outplacement services provided to senior executives of the Company. To the extent that Mr. Trick properly elects to continue health care coverage under COBRA, he and his eligible dependents would also continue to participate in the Company's basic medical and life insurance programs for 24 months (subject to earlier discontinuation in certain circumstances). In addition, any repayment obligation for the Trick Special Cash Award shall lapse, the holding period of the Trick Special RSU Award and the service condition for the Trick Special PSO Award would be deemed satisfied on the termination date, and the Trick Special PSO Award could continue to vest if the price hurdles are met.

If Mr. Trick's employment is terminated by the Company other than for "Cause" or his employment is terminated due to the non-renewal of the Trick Employment Agreement (unless coincidental with a termination for Cause) or if he resigns for "Good Reason," in either case in contemplation of and no more than 90 days prior to, or within one year following, a Change in Control (as defined in the Trick Employment Agreement), he would be entitled to receive the same compensation described in the paragraph above; provided, that (i) he will be entitled to receive a lump sum equal to two (2) times the sum of one year's base salary and the Trick Target Bonus (rather than 1.5 times), (ii) his pro-rated lump sum annual bonus will be based on target rather than based on actual performance and (iii) to the extent not assumed, replaced or continued, his time-based restricted unit awards shall immediately vest in full (without proration) and his performance share unit awards shall immediately vest (without proration) based on the greater of the target or actual performance (or, if the Incentive Plan or the applicable award agreement provide more favorable treatment, the treatment provided in the Incentive Plan or such award agreement).

<u>Smith Employment Agreement</u>

The Company's employment agreement with Ms. Smith (the "Smith Employment Agreement" and, together with the LeBlanc Employment Agreement and the Trick Employment Agreement, the "Employment Agreements") relates to the continuation of

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her employment at the Company in her new role as Executive Vice President, Group Chief Operating Officer and waiver and release of the Company from any claim of "Good Reason" under her amended and restated employment agreement dated October 5, 2023 (the "Prior Smith Employment Agreement"). Under the Smith Employment Agreement, Ms. Smith is also entitled to receive the grant of one-time special awards as set forth in more detail below. The Smith Employment Agreement supersedes in its entirety the Prior Smith Employment Agreement.

The term of the Smith Employment Agreement begins on the Effective Date and ends on the first anniversary of the Effective Date, and on each annual anniversary thereafter, the Smith Employment Agreement will be deemed automatically extended upon the same terms and conditions for successive one-year periods, unless either the Company or Ms. Smith provides written notice of an intention not to extend the term at least 90 days prior to the applicable renewal date.

The Smith Employment Agreement provides for (i) an annual base salary of $500,000 per calendar year, (ii) a target annual bonus opportunity of 75% of base salary, (iii) continued eligibility to participate in the Company's 2024 Incentive Compensation Plan (including any successor plan, the "Incentive Plan"), with a target annual long-term incentive award beginning in calendar year 2026 of $650,000 and (iv) continued eligibility to participate in all employee benefit plans, practices and program maintained by the Company that are generally made available to senior executives of the Company.

In addition, the Smith Employment Agreement provides for the grant of one-time special awards as follows: (1) no later than 30 days following the effective date, a grant of $500,000 cash (the "Smith Special Cash Award"), which Smith Special Cash Award shall be subject to forfeiture, clawback and recovery in the event of Ms. Smith's termination for "Cause" (as defined in the Smith Employment Agreement) or Ms. Smith's voluntary termination without "Good Reason" (as defined in the Smith Employment Agreement) within the first 12 months after the grant; (2) on the Effective Date (or, if later, during the first open window on which equity awards can be made following the Effective Date), an award of restricted stock units with a grant date value of $500,000, which award shall vest in full on the first anniversary of the grant date (such award, the "Smith Special RSU Award"); and (3) on the Effective Date (or, if later, during the first open window on which equity awards can be made following the Effective Date) a performance stock option award for 284,125 shares of the Company's common stock, with an exercise price based on the Company's closing price on the date of grant and vesting subject to completion of a one-year service condition and achievement of the following share price hurdles: 40% of the award will vest if the Company's stock price exceeds $18.00 per share; 20% of the award will vest if the Company's stock price exceeds $21.50 per share; 20% of the award will vest if the Company's stock price exceeds $25.00 per share; and 20% of the award will vest if the Company's stock price exceeds $30.00 per share, in each case based on a 30-day VWAP and exceeding the applicable share price threshold for 60 trading days (such award, the "Smith Special PSO Award" and, together with the Smith Special Cash Award and the Smith Special RSU Award, the "Smith Special Awards"). The performance stock options have a 10-year contract term.

If Ms. Smith's employment is terminated due to death or disability, she would receive her base salary due through the date of termination, any "Accrued Benefits" (as defined in the Smith Employment Agreement), and a pro-rated annual bonus for the year of termination based on actual performance through the full performance period. In addition, Ms. Smith would receive 100% accelerated vesting on all unvested restricted stock unit awards, performance share unit awards and unvested stock options (with performance awards settling based on the greater of target and actual performance through the termination date), any repayment obligation on the Smith Special Cash Award would lapse (in the case of death only, the holding period of the Smith Special RSU Award and the service condition for the Smith Special PSO Award would be deemed satisfied on the termination date, and the Smith Special PSO Award could continue to vest if the price hurdles are met and any other outstanding RSU or PSU awards would immediately vest (with PSU awards settling in full based on the greater of target or actual performance (if measurable) through the date of termination).

If Ms. Smith's employment is terminated by the Company for "Cause" (as defined in the Smith Employment Agreement), or if she resigns without "Good Reason" (as defined in the Smith Employment Agreement), or her employment is terminated due to the non-renewal of the Smith Employment Agreement by Ms. Smith without Good Reason, she would receive her base salary and any Accrued Benefits through the date of termination; provided that her 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. In any such termination happens within 12 months of the grant of the Smith Special Awards, the full amount of the Smith Special Awards will be forfeited.

If Ms. Smith's employment is terminated by the Company other than for "Cause" or if she resigns for "Good Reason," or her employment is terminated due to the non-renewal of the Smith Employment Agreement by the Company without Cause, Ms. Smith would be entitled to receive (i) her base salary and any Accrued Benefits through the date of termination, (ii) a lump sum payment equal to 1.5 times the sum of (a) one year's base salary and (b) the amount of the annual target bonus for the calendar year in which the date of termination occurs or, if not approved for the year of termination, the amount of the target bonus for the immediately preceding year ("Smith Target Bonus"), and (iii) a lump sum payment equal to her annual bonus based on actual performance through the full performance period, pro-rated to reflect the time of service for such year through the date of

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termination, and (iv) for up to twelve (12) months following the date of termination, receive customary outplacement services provided to senior executives of the Company. To the extent that Ms. Smith properly elects to continue health care coverage under COBRA, she and her eligible dependents would also continue to participate in the Company's basic medical and life insurance programs for 24 months (subject to earlier discontinuation in certain circumstances). In addition, any repayment obligation for the Smith Special Cash Award shall lapse, the holding period of the Smith Special RSU Award and the service condition for the Smith Special PSO Award would be deemed satisfied on the termination date, and the Smith Special PSO Award could continue to vest if the price hurdles are met.

If Ms. Smith's employment is terminated by the Company other than for "Cause" or her employment is terminated due to the non-renewal of the Smith Employment Agreement (unless coincidental with a termination for Cause) or if she resigns for "Good Reason," in either case in contemplation of and no more than 90 days prior to, or within one year following, a Change in Control (as defined in the Smith Employment Agreement), she would be entitled to receive the same compensation described in the paragraph above; provided, that (i) she will be entitled to receive a lump sum equal to two (2) times the sum of one year's base salary and the Smith Target Bonus (rather than 1.5 times), (ii) her pro-rated lump sum annual bonus will be based on target rather than based on actual performance and (iii) to the extent not assumed, replaced or continued, her time-based restricted unit awards shall immediately vest in full (without proration) and her performance share unit awards shall immediately vest (without proration) based on the greater of the target or actual performance (or, if the Incentive Plan or the applicable award agreement provide more favorable treatment, the treatment provided in the Incentive Plan or such award agreement).

<u>Provisions Applicable to Each Employment Agreement</u>

Severance payments made under any of the Employment Agreements in connection with a termination of employment are subject to delivery of a general release of claims and material compliance with the restrictive covenants set forth in the applicable employment agreement. The Employment Agreements contain restrictive covenants relating to the non-disclosure of confidential information, non-competition (which runs for 12 months following termination of employment), non-solicitation (or hiring) of employees (which runs for 24 months following termination of employment), mutual non-disparagement, and cooperation on certain matters (which runs for 60 months following termination of employment).

Any compensation paid under the Employment Agreements or any other agreement or arrangement with the Company shall be subject to mandatory repayment by the applicable executive to the Company to the extent any such compensation paid to the applicable executive is, or in the future becomes, subject to (i) the Company's Recoupment Policy as in effect from time to time or (ii) law, rule, requirement or regulation which imposes mandatory recoupment, under circumstances set forth in such law, rule, requirement or regulation. Each of the executives will continue to be required to hold shares of the Company's common stock as set forth in, and subject to the terms of, Ambac's Executive Stock Ownership and Retention Policy ("Stock Ownership Policy") as in effect from time to time. The Stock Ownership Policy generally requires that Mr. LeBlanc, Mr. Trick and Ms. Smith hold shares of the Company's common stock equal in value to six, three and two times his or her base salary, respectively.

The preceding summary of the Employment Agreements contained in this Item 5.02 is qualified in its entirety by reference to the full text of the Employment Agreements attached as Exhibits 10.1, 10.2 and 10.3, as though they were fully set forth herein. The preceding summary of the form of award agreements related to the one-time special awards of restricted stock units and performance stock options contained in this Item 5.02 is qualified in its entirety by reference to the full text of the award agreements attached as Exhibits 10.4 and 10.5, respectively, as though they were fully set forth herein.

***2024 Incentive Plan Amendment***

On September 26, 2025, the Board of Directors (the "Board") of the Company amended the Incentive Plan to remove certain individual award limits as to the maximum number of options and stock appreciation rights, number of full-value awards and amount of cash incentive awards that, in each case, may be granted to any one participant during a calendar year (such amendment, the "Incentive Plan Amendment"). The Incentive Plan Amendment did not modify the existing limit on the value of awards and cash compensation that may be paid to any non-employee director in a calendar year or increase the aggregate maximum number of shares that may be granted under the Incentive Plan. The preceding summary of the Incentive Plan Amendment contained in this Item 5.02 is qualified in its entirety by reference to the full text of the Incentive Plan Amendment attached as Exhibit 10.6, as though it were fully set forth herein.

***Resignation of Daniel McGinnis as Senior Managing Director, Chief Operating Officer and Appointment of R. Sharon Smith as Group Chief Operating Officer; Resignation of Stephen M. Ksenak as Senior Managing Director and Chief Legal Officer; Appointment of Cristina Ahn as Chief Accounting Officer***

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On September 29, 2025, Daniel McGinnis notified the Company of his resignation as Senior Managing Director, Chief Operating Officer of the Company, effective on or about November 30, 2025. Mr. McGinnis indicated that his decision to resign was not due to any disagreement with the Company or its management. Mr. McGinnis will be entitled to the severance and other benefits provided for in his employment agreement dated October 5, 2023 as a result of a resignation for "Good Reason" (as defined in his employment agreement).

On September 26, 2025, the Board appointed R. Sharon Smith as Executive Vice President and Group Chief Operating Officer effective as of the closing of the sale of Ambac Assurance Corporation on September 29, 2025. In connection with the transition of his duties, Ms. Smith and Mr. McGinnis together will oversee the operations of the Company and its subsidiaries until the departure of Mr. McGinnis from the Company. Following his departure, Ms. Smith will assume Mr. McGinnis's duties. Ms. Smith, age 54, has served as Executive Vice President and Chief Strategy Officer since February 2023 and previously served as Chief of Staff and Senior Managing Director of the Company from May 2017 until February 2023. Ms. Smith does not have any family relationship with any of the current officers or directors of the Company. There are no arrangements or understandings between Ms. Smith and any other person pursuant to which Ms. Smith was selected to become Chief Operating Officer of the Company. Ms. Smith does not have any direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Also on September 29, 2025, Stephen M. Ksenak notified the Company of his resignation as Senior Managing Director and Chief Legal Officer, effective on or about November 30, 2025. Mr. Ksenak indicated that his decision to resign was not due to any disagreement with the Company or its management. Mr. Ksenak will be entitled to the severance and other benefits provided for in his employment agreement dated January 4, 2017 as a result of a resignation for "Good Reason" (as defined in his employment agreement).

Following his departure, Lawrence F. Metz, age 52, the Company's Senior Managing Director and General Counsel, will assume Mr. Ksenak's duties. Mr. Metz has served as Senior Managing Director and General Counsel since he joined the Company in August 2025. Prior to joining the Company, Mr. Metz served as Chief Legal Officer and Secretary of Kestrel Group from May 2025 through June 2025. Mr. Metz previously served in roles at Maiden Holdings, Ltd. ("Maiden"), including as Executive Vice Chairman and Group President of Maiden from May 2023 to May 2025, President and Chief Executive Officer/Co-Chief Executive Officer of Maiden from September 2018 to May 2023, as Executive Vice President, General Counsel and Secretary of Maiden from February 2016 to August 2018 and as Senior Vice President, General Counsel and Secretary of Maiden from June 2009 to February 2016. Mr. Metz holds a B.S. from the University of Wisconsin — Madison and a J.D. from Fordham University School of Law and is a member of the Bar of the Supreme Court of the United States, the New Jersey State Bar Association and the New York State Bar Association. Mr. Metz does not have any family relationship with any of the current officers or directors of the Company. There are no arrangements or understandings between Mr. Metz and any other person pursuant to which Mr. Metz was appointed his position at the Company. Mr. Metz does not have any direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

In connection with the closing of the sale of Ambac Assurance Corporation, effective as of September 29, 2025, David Barranco departed the Company as Senior Managing Director of the Company and Robert B. Eisman departed the Company as Senior Managing Director, Chief Accounting Officer and Controller. Following the closing, Mr. Barranco and Mr. Eisman will assume positions at Ambac Assurance Corporation.

On September 26, 2025, the Company's Board of Directors appointed Cristina Ahn as Chief Accounting Officer of the Company, effective as of the closing of the sale of Ambac Assurance Corporation on September 29, 2025.

Ms. Ahn, age 43, has over 20 years of experience in accounting and has served as the Controller of the Company since May 2024. Ms. Ahn previously worked at Genworth Financial, Inc., an insurance company, as Senior Vice President, Controller and Principal Accounting Officer from 2023 to 2024, and Kemper Corporation, an insurance company, as Senior Vice President, Corporate Controller from 2020 to 2022, where she held accounting and financial roles of increasing responsibility. Ms. Ahn also previously served as Director at PricewaterhouseCoopers LLP. Ms. Ahn holds a B.S. in Accounting from Rutgers University and is a certified public accountant. Ms. Ahn does not have any family relationship with any of the current officers or directors of the Company. There are no arrangements or understandings between Ms. Ahn and any other person pursuant to which Ms. Ahn was selected to become Chief Accounting Officer of the Company. Ms. Ahn does not have any direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

**Item 9.01. Financial Statements and Exhibits**

(d) Exhibits. The following exhibits are filed as part of this Current Report on Form 8-K

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**EXHIBIT INDEX**

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| | |
|:---|:---|
| **Exhibit<br>Number** | **Exhibit Description** |
| 10.1 | <u>[Employment Agreement dated as of September 2](a04-0853q858xkex101.htm)[9](a04-0853q858xkex101.htm)[, 2025, by and among Ambac Financial Group, Inc. and Claude LeBlanc](a04-0853q858xkex101.htm)</u> |
| 10.2 | <u>[Employment Agreement dated as of September 2](a04-0853q258xkex102.htm)[9](a04-0853q258xkex102.htm)[, 2025, by and among Ambac Financial Group, Inc. and David Trick](a04-0853q258xkex102.htm)</u> |
| 10.3 | <u>[Employment Agreement dated as of September 2](a04-0853q258xkex103.htm)[9](a04-0853q258xkex103.htm)[, 2025, by and among Ambac Financial Group, Inc. and R. Sharon Smith](a04-0853q258xkex103.htm)</u> |
| 10.4 | <u>[Form of Restricted Stock Unit Agreement](a04-0853q258xkex104.htm)[for Special](a04-0853q258xkex104.htm)[RSU](a04-0853q258xkex104.htm)[Award](a04-0853q258xkex104.htm)</u> |
| 10.5 | <u>[Form of Performance Stock Option Agreement](a04-0853q258xkex105.htm)[for Sp](a04-0853q258xkex105.htm)[e](a04-0853q258xkex105.htm)[ci](a04-0853q258xkex105.htm)[al Perf](a04-0853q258xkex105.htm)[o](a04-0853q258xkex105.htm)[rmance](a04-0853q258xkex105.htm)[-Based Stock Option Award](a04-0853q258xkex105.htm)</u> |
| 10.6 | <u>[Amendment No. 1 to 2024 Incentive Compensation Plan, dated as of September 26, 2025](a04-0853q258xkex106.htm)</u> |
| 101.INS | XBRL Instance Document - the instance document does not appear in the interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | XBRL Taxonomy Extension Schema Document. |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. |
| 104 | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags or embedded within the Inline XBRL document |

---

**SIGNATURES** 

**Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.** 

---

| | | | |
|:---|:---|:---|:---|
| | | **Ambac Financial Group, Inc.** | **Ambac Financial Group, Inc.** |
| | | **(Registrant)** | **(Registrant)** |
| **Dated:** | **September 29, 2025** | **By:** | **/s/ William J. White** |
|  |  |  | **William J. White** |
|  |  |  | **First Vice President, Secretary and<br>Assistant General Counsel** |

---

## Exhibit 10.1

**Exhibit 10.1**

**EMPLOYMENT AGREEMENT** 

This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of September 29, 2025, by and among Ambac Financial Group, Inc., a Delaware corporation ("AFG" or the "Company"), and Claude LeBlanc, an individual (the "Executive").

WHEREAS, the Executive is currently employed as the President and Chief Executive Officer of both AFG and Ambac Assurance Corporation, a Wisconsin corporation ("AAC") pursuant to that certain amended and restated employment agreement dated August 3, 2020 (the "2020 Agreement");

WHEREAS, in consideration for this Agreement, the Executive agrees to waive and fully release the Company and AAC from any claim of "good reason" under the 2020 Agreement; and

WHEREAS, the Company and the Executive have agreed to enter into this Agreement on the terms and conditions set forth herein.

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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Employment Agreement.</u> On the terms and conditions set forth in this Agreement, AFG agrees to employ the Executive and the Executive agrees to be employed by AFG for the Employment Period set forth in Section 2 and in the position and with the duties set forth in Section 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Term.</u> The term of employment under this Agreement shall be for a period beginning on September 29, 2025 (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 either the Company or the Executive provides written notice of its intention not to extend the term of the Agreement at least ninety (90) days' prior to the applicable Renewal Date. For the avoidance of doubt, a failure to extend the term of the Agreement by a party as described in this Agreement shall require affirmative action of such party. The period during which the Executive is employed by AFG hereunder is hereinafter referred to as the "Employment Period."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Position and Duties</u>. During the Employment Period, the Executive shall serve as the President and Chief Executive Officer of AFG. In such capacity, the Executive shall report directly to the Board of Directors of AFG (the "Board"). In addition, during the Employment Period the Executive shall serve as a member of the Board. During the Employment Period, the Executive shall have the duties, responsibilities and authority as shall be consistent with the Executive's position and such other duties, responsibilities and authority consistent with the Executive's position as may be assigned to the Executive by the Board. 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 Ethics and other policies of the Company as in effect from time to time. Notwithstanding the above, the Executive may serve on the board of directors of one (1) other publicly traded company with the prior written approval of the Board or the Governance

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and Nominating Committee thereof; provided that the Executive agrees to resign such service in the event the Board or the Governance and Nominating Committee thereof reasonably determines such service conflicts or interferes with the Executive's duties to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Compensation and Benefits.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Base Salary.</u> 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 nine hundred thousand dollars ($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 the Board (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 AFG's regular payroll procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Annual Bonus.</u> For each calendar year that ends during the Employment Period, the Executive shall be eligible to receive an annual bonus pursuant to the Company's annual bonus plan for senior executives. The amount of any such annual bonus paid to the Executive during the Employment Period shall be based on the achievement of pre-established 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 their discretion, whether and to what extent such performance goals are achieved. The Executive's target annual bonus amount shall be one hundred twenty-five percent (125%) of the Base Salary, as determined by the Compensation Committee, in its discretion; provided, however, that for calendar year 2025, the Executive's target annual bonus amount shall be the same as the amount set for the Executive's 2024 annual bonus. For the avoidance of doubt, such target 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 AFG, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Long-Term Incentives</u>. During the Employment Period, the Executive shall be eligible to participate in the AFG 2024 Incentive Compensation Plan (the "Incentive Plan") or any successor plan or additional plan of the Incentive Plan, subject to the terms of any such plan, as determined by the Compensation Committee, in its discretion and subject to the terms of this Agreement. Annual equity awards granted to the Executive under the Incentive Plan shall be similar in form and shall have similar terms and conditions (other than amount) as annual equity awards granted to other senior executives of AFG and shall be granted to the Executive during the annual compensation cycle applicable generally to senior executives of AFG. With respect to each calendar year that commences during the Employment Period, commencing with calendar year 2026, the Executive shall receive an annual long-term incentive ("LTI") award with a target amount of two million, six hundred fifty thousand dollars ($2,650,000), as determined by the Compensation Committee in its discretion. For the avoidance of doubt, such target annual LTI award opportunity does not constitute a guarantee of any LTI payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Special One-Time Awards.</u> The Company shall grant the awards set forth in this Section 4(d) (collectively, the "Special One-Time Awards").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Special Cash Award</u>. No later than thirty (30) days following the Effective Date, the Company shall make a one-time lump sum payment to the Executive in the gross amount equal to one (1) times the Base Salary (the "Special Cash Award").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>Special RSU Award</u>. On the Effective Date if such date is during a Company open window on which equity grants can be made, and if such date is not during such a window, then on the first business day of the first open window on which equity awards can be made following the Effective Date, the

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Executive shall be granted an award of restricted stock units with a grant-date value of two million, one hundred thousand dollars ($2,100,000) (the "Special RSU Award"). The Special RSU Award shall vest in full on the first anniversary of the grant date and will be issued under the Incentive Plan and shall be subject to the terms and conditions of the Incentive Plan and the award agreement attached hereto as <u>Exhibit B</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)<u>Special Performance-Based Stock Option Award</u>. On the Effective Date if such date is during a Company open window period on which equity grants can be made, and if such date is not during such a window, then on the first business day of the first open window on which equity awards can be made following the Effective Date, the Executive shall be granted a stock option award for five hundred thousand (500,000) shares of the Company's common stock ("Special Performance-Based Stock Option Award"). The options granted under the Special Performance-Based Stock Option Award shall have an exercise price per share equal to the closing price of a share of the common stock on the date of the grant and shall vest based on a combination of time and the achievement of performance hurdles. The Special Performance-Based Stock Option Award will be issued under the Incentive Plan and shall be subject to the terms and conditions of the Incentive Plan and the award agreement attached hereto as <u>Exhibit C</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Employee Benefits; Perquisites.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Company Compensation Plans</u>. 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 any entity controlled by, in control of, or under common control with, AFG, including without limitation its direct and indirect subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Clawback/Recoupment</u>. 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 (i) any "clawback" or recoupment policy that is applicable to all senior executives of AFG or that is adopted to comply with any applicable law, rule or regulation, or any other requirement, or (ii) any law, rule, requirement or regulation which imposes mandatory recoupment, under circumstances set forth in such law, rule, requirement or regulation. Further, the Company shall have the right to clawback or recoup each of the Special One-Time Awards if the Executive is terminated for "Cause" or voluntarily terminates his employment without Good Reason (it being understood that the Executive's termination due to death or Disability is not a voluntary termination) prior to the twelve (12) month anniversary of the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Stock Ownership Guidelines</u>. The Executive shall be required to hold shares of AFG's common stock as required by any stock ownership policy adopted by the Board (or any committee thereof) from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Treatment of Equity and Equity-related Awards</u>. Notwithstanding any provision of this Agreement to the contrary, an equity or equity-related award, as applicable, granted to the Executive shall be governed by the whichever is more favorable of (i) the terms of the applicable plan or award agreement or the 2020 Agreement if the equity or equity related award was granted prior to the Effective Date, and (ii) the terms of the applicable plan or award agreement or this Agreement if the equity or equity-related award was granted following the Effective Date (including, with respect to the immediately foregoing clauses (i) and (ii), for purposes of determining the Executive rights pursuant to Section 7(d)). For the avoidance of doubt, upon and following vesting of any equity or equity-related awards granted to the Executive at any time, except for recoupment pursuant to clause (i) of Section 4(g),

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such equity and equity-related awards shall remain vested regardless of the Executive's termination of employment following vesting of the applicable awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Expenses.</u> The Executive is expected and is authorized to incur reasonable expenses in the performance of his duties hereunder. The Company shall reimburse the Executive for all such expenses reasonably and actually incurred in accordance with reasonable policies which may be adopted from time to time by the Company promptly upon periodic presentation by the Executive of an itemized account, including reasonable substantiation, of such expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Termination of Employment.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Permitted Terminations.</u> 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Death.</u> The Executive's employment hereunder shall terminate upon the Executive's death;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>By the Company.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) <u>Disability</u>. 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 one hundred eighty (180) days out of any three hundred sixty-five (365) day period or for one hundred twenty (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 actually paid to him under any Company-provided disability insurance policy or plan applicable to him; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <u>Cause.</u> The Company may terminate the Executive's employment 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 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 Ethics and any Delegation of Authority Policy of AFG, 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 a copy of the resolution duly adopted by the affirmative vote of not less than a majority of the 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 the Board), 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 thirty (30) days from the delivery of written notice by the Company within which to cure any acts constituting Cause.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>By the Executive.</u> 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 material diminution in the Executive's title or reporting relationships (including with respect to the Executive's membership on the Board), (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 or target annual bonus, other than a uniform reduction applied to substantially all senior executive officers of AFG that does not result in a reduction of more than five percent (5%) of any of the Executive's Base Salary or reduction of the Executive's grant date target value of the annual LTI award below one million, two hundred thousand dollars ($1,200,000)), (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 of this Agreement, or (vii) non-renewal of the Agreement by the Company regardless of whether the Executive's employment terminates. 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, provided, however, that there shall be no cure for a non-renewal of the Employment Agreement as described in the immediately foregoing clause (vii) of this definition. 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. The Executive acknowledges that, as of the Effective Date, no event that would constitute Good Reason has occurred. The Executive further acknowledges that in the event the Executive is on a period of leave due to a disability and the Company promotes or hires on an interim basis an individual who has a title, if any, that is designated, and who is identified, as "interim" to complete the duties and responsibilities set forth herein solely during the period of such disability, the Executive shall not be permitted to claim "Good Reason" under subsections (i) or (ii) herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Termination</u>. 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), thirty (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 pursuant to Section 2, the applicable Renewal Date notwithstanding a termination of the Executive's employment by the Company following the date of notice of nonrenewal and prior to 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

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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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Resignation of All Other Positions</u>. 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 or any Company Affiliate and as a fiduciary with respect to any benefit plan (or related trust) sponsored by AFG or any Company Affiliate. The Executive agrees to execute any letter consistent with the foregoing that AFG or any Company Affiliate may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Compensation Upon Termination.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Death.</u> 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) subject to execution by the Executive's surviving spouse, or in the absence thereof by an individual holding a Power of Attorney from the Executive upon the date of the Executive's death, or by the Executive's estate, a general release of claims substantially in the form of the release attached hereto as <u>Exhibit A</u> (except as may be revised to reasonably reflect changes in applicable law) within the Release Period as defined in Section 7(f): (x) 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 may have been earned; (y) one hundred percent (100%) accelerated vesting of all unvested restricted stock unit awards, performance share unit awards, and unvested stock options with such vested restricted stock unit awards and performance share unit awards to be settled within sixty (60) days of the Date of Termination with performance-based awards settled based on the greater of target or actual performance (if measurable) through the Date of Termination; (z) extension of the exercise period of vested stock options to the lesser of the twelve (12) month period following the date of the Executive's termination and the remainder of the term of the applicable stock option, (aa) any repayment obligation related to the Special Cash Award shall lapse and any holding period requirement with respect to shares that are subject to RSUs and stock options shall be deemed satisfied and (bb) subject to the foregoing, the Executive's Special RSU Award and Special Performance-Based Stock Option Award will be treated in accordance with the applicable terms of the Incentive Plan or award agreements evidencing such awards ((x) through (bb) referred to herein as the "Death/Disability Severance Benefits"). Except as set forth herein, 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. Except as set forth herein, the Executive's outstanding equity awards granted on and after the Effective Date shall be governed by the terms of the award agreements evidencing such awards. 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 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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Disability.</u> 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 subject to the Executive (or the Executive's personal representative or an individual holding a Power of Attorney from the Executive upon the Date of Termination) executing a general release of claims substantially in the form of the release attached hereto as <u>Exhibit A</u> (except as may be revised to reasonably reflect changes in applicable law) within the Release Period as defined in Section 7(f), the Death/Disability Severance Benefits. Except as set forth herein, the rights of the Executive with respect to the Executive's equity or equity-related awards (including Special RSU Award and Special Performance-Based Stock Option Award) shall be governed by the applicable terms of the Incentive Plan or award agreement evidencing such award. Except as set forth herein, the Executive's outstanding equity awards granted on and after the Effective Date shall be governed by the terms of the award agreements evidencing such awards. Except as set forth herein, the Company and Company Affiliates shall have no further obligations to the Executive under this Agreement upon the 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Termination by the Company for Cause or by the Executive without Good Reason or by the Executive's Failure to Extend the Term.</u> 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 the Executive 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 will forfeit the Executive's rights with respect to all outstanding unvested equity or equity-related awards; provided, however that, the rights of the Executive with respect to the Executive's Special RSU Award and Special Performance-Based Stock Option Award that have not vested will be treated in accordance with the applicable terms of the Incentive Plan or award agreement evidencing such award. Except as set forth herein, the Company and Company Affiliates shall have no further obligations to the Executive under this Agreement upon such termination. If, prior to the first anniversary of the Effective Date, 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), then the Special One-Time Awards shall be forfeited and subject in full to the Clawback/Recoupment provisions in Section 4(g) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Termination by the Company without Cause or by the Company's Failure to Extend the Term or by the Executive with Good Reason.</u> 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 or if no target bonus has been approved by the Company for the year in which such

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Date of Termination occurs, then the amount of the Executive's target bonus for the immediately preceding year (as applicable, the "Target Bonus"), (2) a lump sum payment equal to the product of (x) the Executive's annual bonus for the calendar year in which the Date of Termination occurs , based on actual performance through the full performance period, 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, with such payment to be made on the same date that other senior executives of the Company receive their annual bonuses, but to be made no later than March 15 of the year following the Executive's Date of Termination (the "Termination Year Bonus"), (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, (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 twenty-four (24) 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 whether under applicable law or otherwise; 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 twenty-four (24) months of the Company subsidy of group health plan premiums for the Executive and his eligible dependents, subject to applicable withholdings, (5) any repayment obligation related to the Special Cash Award shall lapse, and (6) the Executive's Special RSU Award and Special Performance-Based Stock Option Award will be treated in accordance with the applicable terms of the Incentive Plan or award agreement evidencing such award Subject to Section 7(h). The lump sum payments described in items (1) and (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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Termination by the Company without Cause or by the Executive with Good Reason in connection with a Change in Control</u>. 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 ninety (90) 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 benefits set forth in Section 7(d)(1) – (6) above, except that (i) the lump payment set forth in Section 7(d)(1) shall instead equal two and one half (2.5) times the sum of (x) the Executive's Base Salary and (y) the amount of the Executive's Target Bonus; (ii) the Termination Year Bonus set forth in Section 7(d)(2) shall be measured at the Target Bonus level rather than actual performance level and to be paid within sixty (60) days of the Date of Termination. Further, (x) to the extent that the Executive's restricted unit awards are not assumed, replaced or continued, such awards shall immediately vest in full and shall be settled within sixty (60) days of the Change in Control; (y) to the extent that the Executive's performance share unit awards are not assumed, replaced or continued, then such awards shall immediately vest based on the greater of the target or actual performance (or if actual performance cannot be measured at such time, at target performance) as of the date of the Change in Control, to be settled within sixty (60) days of the Change in Control, and (z) notwithstanding the foregoing, if the Incentive Plan (or a successor plan) and applicable award agreement provides for more favorable treatment, such restricted stock unit awards and performance share unit awards shall be governed by the plan and the respective applicable

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award agreement. With respect to the Executive's outstanding restricted stock unit awards or performance share awards which are assumed, replaced or continued in connection with the Change in Control, such an award shall continue to have terms applicable upon the Executive's termination of employment with the Company (or with a successor or the successor's parent or affiliate, as applicable) which are no less favorable to the Executive than the terms of the Incentive Plan (or a successor plan) and respective award agreement in effect immediately prior to the Change in Control.

For purposes of this Agreement, "Change in Control" means the occurrence of one or more of the following events: (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 AFG; (ii) within any twenty-four (24) month period the majority of the Board consists of individuals other than "Incumbent Directors," which term means the members of the 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 shall be considered to be an Incumbent Director; (iii) AFG transfers all or substantially all of its assets or business (unless the shareholders immediately prior to such transaction beneficially own, directly or indirectly, in substantially the same proportion as they owned the Voting Stock of the Company, all of the Voting Stock or other ownership interests of the entity or entities, if any, that succeed to the business of AFG or AFG's ultimate parent company if 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 AFG immediately prior to the transaction hold, directly or indirectly, more than fifty percent (50%) of the Voting Stock of AFG or AFG's ultimate parent company if 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, AFG shall include any entity that succeeds to all or substantially all of the business of 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Liquidated Damages.</u> The parties acknowledge and agree that damages which will result to the Executive for termination of the Executive's employment by the Company due to death or disability under Sections 6(a)(i) and 6(b)(ii)(A), without Cause under 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(a), (b), (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 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 in which the Executive participated and any claim for coverage under AFG'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 <u>Exhibit A</u> (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 (2) 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, within forty-five (45) days of delivery of the release by the Company to the Executive, the Executive (or his estate or spouse as set forth in Section 7(a) or 7(b), as applicable) executes and delivers the release to the Company, and such release has become irrevocable by virtue of the expiration of the revocation period without the release having been revoked (the first such date, the "Release Effective Date" and the forty-five day consideration period plus the applicable

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revocation period, the "Release Period"). 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 obligations under Sections 6(c) or 8 and has not cured (if curable) any such failure within ten (10) days after being provided 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 AFG 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>No Offset.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Section 409A</u>. 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, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

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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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) (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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Confidentiality, Non-Disclosure and Non-Competition Agreement.</u> 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 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 and Company Affiliates. 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Non-Disclosure.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

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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 legal department to make any such reports or disclosures and the Executive is not required to notify AFG that the Executive has made such reports or disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Materials.</u> 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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>No Solicitation.</u> During the period commencing on the Effective Date and ending twenty-four (24) months after the Executive's Date of Termination (the "Non-Solicit Period"), the Executive shall not, directly or indirectly through an intermediary, solicit, entice, persuade or induce any individual who is employed by, or who is an independent contractor or consultant to, the Company or any Company Affiliate (or who was so employed or retained within one (1) year prior to the Executive's action, other than any such individual whose employment or engagement was involuntarily terminated by the Company or any Company Affiliate) to terminate or refrain from continuing such employment or engagement 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, independent contractor or consultant of the Company or any Company Affiliate for advice on employment matters, (ii) the Executive's responding to an unsolicited request for a reference regarding any former employee, independent contractor or consultant of the Company or any Company Affiliate from such former employee,

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independent contractor or consultant, or from a third party, by providing a reference setting forth his personal views about such former employee, independent contractor or consultant, or (iii) hiring or retaining any current or former employee, independent contractor 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, independent contractors or consultants of the Company or any Company Affiliate, shall not be deemed a violation of this Section 8(c). Additionally, the Executive shall not, directly or indirectly through an intermediary, solicit or encourage any client, customer, supplier or vendor of the Company or any Company Affiliate, or any person or entity who was a client, customer, supplier or vendor within one year 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Non-Competition</u>. 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 without the prior written consent of the Board, which consent shall not be unreasonably withheld, directly or indirectly own any interest in, manage, control, participate in, consult with, or render services similar to those that the Executive performed on behalf of the Company or Company Affiliates during the last two (2) years of the Executive's employment, or otherwise be or be connected in any manner directly or indirectly, with, (i) any person or entity that is engaged in the same business as the business in which the Company or any Company Affiliate is engaged or (ii) any person or entity that is engaged in a business which otherwise materially competes with any business that the Company or any Company Affiliate conducts or has taken substantial measures to conduct within the next six (6) months (as determined at the Date of Termination) in any state in the United States of America and the District of Columbia or any other jurisdiction in which such business is conducted or in which the Company has taken substantial measures to conduct within the next six (6) months (as applicable) at the Date of Termination and with respect to which the Executive provided services or Company Confidential Information; 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 five percent (5%) of the voting power of such entity and, while employed by the Company 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Compliance with Company's Policies</u>. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Non-Disparagement</u>. 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

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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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Publicity</u>. 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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Cooperation</u>. 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 (5) year period following the termination of the Executive's employment for any reason, to the extent reasonably requested by AFG, 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 the 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Enforcement.</u> 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. If the Executive violates this Section 8, and not withstanding any language to the contrary in any LTI award agreement, it is agreed that (a) any compensation or benefits due to be received by the Executive pursuant to this Agreement or any other agreement, plan or instrument of or with the Company after such violation will immediately cease; (b) the Executive shall forfeit all outstanding, unvested equity awards; (c) the Executive shall repay the Company the after-tax amount of any severance payment or benefit received by him; (d) despite the cessation, forfeiture or repayment of such payment or benefits, the release provided by the Executive in connection with such benefits will remain in full force and effect; and (e) the Company's or any Company Affiliate's remedy of cessation or recoupment of severance payments or benefits to the Executive does not preclude any additional remedies available to the Company or Company Affiliates, including but not limited to injunctive relief. 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

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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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Severability</u>. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Section 280G.</u> 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"), and the Company shall pay the Executive the greater of the Full Payment or the 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

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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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Indemnification.</u> 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 as of the Effective Date or put in place following the Effective Date on the same basis as other current or former officers of AFG with regard to actions or inactions during the period of service as an officer notwithstanding any ceasing of such service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Legal Fees Incurred in Negotiating the Agreement.</u> 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 twenty-five thousand dollars ($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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Notices.</u> 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, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, addressed as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If to AFG:

Ambac Financial Group, Inc.

One World Trade Center, 41st Floor

New York, New York 10007

Attn: General Counsel

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If to the Executive:

Claude LeBlanc

Address last shown on the Company's records

Each party may designate by notice in writing a new 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, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Severability.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Effect on Other Agreements.</u> This Agreement constitutes the entire agreement between the parties respecting the employment of the Executive and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter, including, but

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not limited to, the 2020 Agreement. The Executive acknowledges that in consideration for this Agreement, the Executive agrees to waive and fully release the Company and AAC from any claim of "good reason" under the 2020 Agreement. The Executive further acknowledges that in connection with receipt of the consideration included in this Agreement that the Executive hereby irrevocably and unconditionally waives and releases the Company and AAC and its directors, officers, employees, and agents from any and all claims, rights, or causes of action, whether known or unknown, that the Executive may have against the Company, AAC, their affiliates, officers, directors, employees, agents, successors, and assigns, arising out of or relating to the Executive's employment, including but not limited to claims under federal, state, or local laws governing employment, discrimination, or retaliation, except for claims that cannot be waived by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Survival.</u> It is the express intention and agreement of the parties hereto that the provisions of Sections 4(g), 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Assignment.</u> 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. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Binding Effect.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Amendment; Waiver.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Headings.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Governing Law.</u> 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).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. <u>Arbitration</u>. 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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. <u>Counterparts.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. <u>Withholding.</u> 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.

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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.

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| |
|:---|
| AMBAC FINANCIAL GROUP, INC. |
| EXECUTIVE |
| /s/ Claude LeBlanc |
| Claude LeBlanc |

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EXHIBIT A

**<u>General Release of Claims</u>** 

Consistent with Section 7 of the Employment Agreement dated September 29, 2025 among me, Ambac Financial Group, Inc. (the "Employment Agreement") and in consideration for and contingent upon my receipt of the Severance Payments set forth in Section 7 of the 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. ("Ambac") and Ambac Assurance Corporation ("AAC") 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 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 or AAC, except that I am not releasing (i) any claims arising under Section 10 of the 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 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 Employment Agreement, (iv) any claims relating to any rights I may have pursuant to equity and equity-related awards granted to me by Ambac, provisions of the 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 AAC 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.

Ambac, AAC 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.

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**<u>Claims Excluded from this Release:</u>** 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 EEOC, NLRB, or any comparable state or local agency. Notwithstanding the foregoing, I agree to waive my right to recover individual relief in any charge, complaint, or lawsuit filed by me or anyone on my behalf. Notwithstanding the foregoing, to the extent that Ambac or AAC 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. Moreover, nothing herein shall prohibit me from reporting possible violations of federal or state law or regulation or cooperating with the Securities and Exchange Commission without notice to the Company (and to receive a whistleblower award provided by law for providing such information).

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 and AAC 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, 41st Floor, 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 or AAC and Ambac or AAC shall be relieved of all obligations to make the Severance Payments described in Section 7 of the Employment Agreement. I may, if I wish, elect to sign this General Release prior to the expiration of the twenty-one (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.

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| | |
|:---|:---|
| AGREED: | |
| _________________<br>Claude LeBlanc | _______________<br>Date |

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## Exhibit 10.2

Exhibit 10.2

**EMPLOYMENT AGREEMENT** 

This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of September 29, 2025, by and among Ambac Financial Group, Inc., a Delaware corporation ("AFG" or the "Company"), and David Trick, an individual (the "Executive").

WHEREAS, the Executive is currently employed as the Executive Vice President, Chief Financial Officer (CFO) & Treasurer of both AFG and Ambac Assurance Corporation, a Wisconsin corporation ("AAC") pursuant to that certain employment agreement dated November 1, 2016 (the "2016 Agreement");

WHEREAS, in consideration for this Agreement, the Executive agrees to waive and fully release the Company and AAC from any claim of "good reason" under the 2016 Agreement; and

WHEREAS, the Company and the Executive have agreed to enter into this Agreement on the terms and conditions set forth herein.

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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Employment Agreement.</u> On the terms and conditions set forth in this Agreement, AFG agrees to employ the Executive and the Executive agrees to be employed by AFG for the Employment Period set forth in Section 2 and in the position and with the duties set forth in Section 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Term.</u> The term of employment under this Agreement shall be for a period beginning on September 29, 2025 (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 either the Company or the Executive provides written notice of its intention not to extend the term of the Agreement at least ninety (90) days' prior to the applicable Renewal Date. For the avoidance of doubt, a failure to extend the term of the Agreement by a party as described in this Agreement shall require affirmative action of such party. The period during which the Executive is employed by AFG hereunder is hereinafter referred to as the "Employment Period."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Position and Duties</u>. During the Employment Period, the Executive shall serve as the Executive Vice President, Chief Financial Officer (CFO) & Treasurer of AFG. In such capacity, the Executive shall report directly to the Chief Executive Officer. During the Employment Period, the Executive shall have the duties, responsibilities and authority as shall be consistent with the Executive's position and such other duties, responsibilities and authority consistent with the Executive's position as may be assigned to the Executive. 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 Ethics and other policies of the Company as in effect from time to time.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Compensation and Benefits.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Base Salary.</u> 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 six hundred thousand dollars ($600,000) 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 (the "Compensation Committee") of the Board of Directors of AFG (the "Board") 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 AFG's regular payroll procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Annual Bonus.</u> For each calendar year that ends during the Employment Period, the Executive shall be eligible to receive an annual bonus pursuant to the Company's annual bonus plan for senior executives. The amount of any such annual bonus paid to the Executive during the Employment Period shall be based on the achievement of pre-established 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 their discretion, whether and to what extent such performance goals are achieved. The Executive's target annual bonus amount shall be seventy percent (70%) of the Base Salary, as determined by the Compensation Committee, in its discretion; provided, however, that for calendar year 2025, the Executive's target annual bonus amount shall be the same as the amount set for the Executive's 2024 annual bonus. For the avoidance of doubt, such target 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 AFG, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Long-Term Incentives</u>. During the Employment Period, the Executive shall be eligible to participate in the AFG 2024 Incentive Compensation Plan (the "Incentive Plan") or any successor plan or additional plan of the Incentive Plan, subject to the terms of any such plan, as determined by the Compensation Committee, in its discretion and subject to the terms of this Agreement. Annual equity awards granted to the Executive under the Incentive Plan shall be similar in form and shall have similar terms and conditions (other than amount) as annual equity awards granted to other senior executives of AFG and shall be granted to the Executive during the annual compensation cycle applicable generally to senior executives of AFG. With respect to each calendar year that commences during the Employment Period, commencing with calendar year 2026, the Executive shall receive an annual long-term incentive ("LTI") award with a target amount of seven hundred thousand dollars ($700,000), as determined by the Compensation Committee in its discretion. For the avoidance of doubt, such target annual LTI award opportunity does not constitute a guarantee of any LTI payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Special One-Time Awards.</u> The Company shall grant the awards set forth in this Section 4(d) (collectively, the "Special One-Time Awards").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Special Cash Award</u>. No later than thirty (30) days following the Effective Date, the Company shall make a one-time lump sum payment to the Executive in the gross amount equal to one (1) times the Base Salary (the "Special Cash Award").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>Special RSU Award</u>. On the Effective Date if such date is during a Company open window on which equity grants can be made, and if such date is not during such a window, then on the first business day of the first open window on which equity awards can be made following the Effective Date, the Executive shall be granted an award of restricted stock units with a grant-date value of six hundred thousand dollars ($600,000) (the "Special RSU Award"). The Special RSU Award shall vest in full on the first anniversary of the grant date and will be issued under the Incentive Plan and shall be subject to the terms and conditions of the Incentive Plan and the award agreement attached hereto as <u>Exhibit B</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)<u>Special Performance-Based Stock Option Award</u>. On the Effective Date if such date is during a Company open window period on which equity grants can be made, and if such date is not during such a window, then on the first business day of the first open window on which equity awards can be made following the Effective Date, the Executive shall be granted a stock option award for three hundred fifty thousand, three hundred seventy-five (350,375) shares of the Company's common stock ("Special Performance-Based Stock Option Award"). The options granted under the Special Performance-Based Stock Option Award shall have an exercise price per share equal to the closing price of a share of the common stock on the date of the grant and shall vest based on a combination of time and the achievement of performance hurdles. The Special Performance-Based Stock Option Award will be issued under the Incentive Plan and shall be subject to the terms and conditions of the Incentive Plan and the award agreement attached hereto as <u>Exhibit C</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Employee Benefits; Perquisites.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Company Compensation Plans</u>. 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 any entity controlled by, in control of, or under common control with, AFG, including without limitation its direct and indirect subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Clawback/Recoupment</u>. 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 (i) any "clawback" or recoupment policy that is applicable to all senior executives of AFG or that is adopted to comply with any applicable law, rule or regulation, or any other requirement, or (ii) any law, rule, requirement or regulation which imposes mandatory recoupment, under circumstances set forth in such law, rule, requirement or regulation. Further, the Company shall have the right to clawback or recoup each of the Special One-Time Awards if the Executive is terminated for "Cause" or voluntarily terminates his employment without Good Reason (it being understood that the Executive's termination due to death or Disability is not a voluntary termination) prior to the twelve (12) month anniversary of the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Stock Ownership Guidelines</u>. The Executive shall be required to hold shares of AFG's common stock as required by any stock ownership policy adopted by the Board (or any committee thereof) from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Treatment of Equity and Equity-related Awards</u>. Notwithstanding any provision of this Agreement to the contrary, an equity or equity-related award, as applicable, granted to the Executive shall be governed by the whichever is more favorable of (i) the terms of the applicable plan or award agreement or the 2016 Agreement if the equity or equity related award was granted prior to the Effective Date, and (ii) the terms of the applicable plan or award agreement or this Agreement if the equity or equity-related award was granted following the Effective Date (including, with respect to the immediately foregoing clauses (i) and (ii), for purposes of determining the Executive rights pursuant to Section 7(d)). For the avoidance of doubt, upon and following vesting of any equity or equity-related awards granted to the Executive at any time, except for recoupment pursuant to clause (i) of Section 4(g), such equity and equity-related awards shall remain vested regardless of the Executive's termination of employment following vesting of the applicable awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Expenses.</u> The Executive is expected and is authorized to incur reasonable expenses in the performance of his duties hereunder. The Company shall reimburse the Executive for all such expenses reasonably and actually

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incurred in accordance with reasonable policies which may be adopted from time to time by the Company promptly upon periodic presentation by the Executive of an itemized account, including reasonable substantiation, of such expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Termination of Employment.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Permitted Terminations.</u> 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Death.</u> The Executive's employment hereunder shall terminate upon the Executive's death;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>By the Company.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) <u>Disability</u>. 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 one hundred eighty (180) days out of any three hundred sixty-five (365) day period or for one hundred twenty (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 actually paid to him under any Company-provided disability insurance policy or plan applicable to him; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <u>Cause.</u> The Company may terminate the Executive's employment 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 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 Ethics and any Delegation of Authority Policy of AFG, 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 a copy of the resolution duly adopted by the affirmative vote of not less than a majority of the 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 the Board), 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 thirty (30) days from the delivery of written notice by the Company within which to cure any acts constituting Cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>By the Executive.</u> 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.

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For purposes of this Agreement, "Good Reason" means (i) any material 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 or target annual bonus, other than a uniform reduction applied to substantially all senior executive officers of AFG that does not result in a reduction of more than five percent (5%) of any of the Executive's Base Salary or reduction of the Executive's grant date target value of the annual LTI award below four hundred thousand dollars ($400,000)), (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 of this Agreement, or (vii) non-renewal of the Agreement by the Company regardless of whether the Executive's employment terminates. 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, provided, however, that there shall be no cure for a non-renewal of the Employment Agreement as described in the immediately foregoing clause (vii) of this definition. 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. The Executive acknowledges that, as of the Effective Date, no event that would constitute Good Reason has occurred. The Executive further acknowledges that in the event the Executive is on a period of leave due to a disability and the Company promotes or hires on an interim basis an individual who has a title, if any, that is designated, and who is identified, as "interim" to complete the duties and responsibilities set forth herein solely during the period of such disability, the Executive shall not be permitted to claim "Good Reason" under subsections (i) or (ii) herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Termination</u>. 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), thirty (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 pursuant to Section 2, the applicable Renewal Date notwithstanding a termination of the Executive's employment by the Company following the date of notice of nonrenewal and prior to 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Resignation of All Other Positions</u>. 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 or any Company Affiliate and as a fiduciary with respect to any benefit plan (or related trust)

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sponsored by AFG or any Company Affiliate. The Executive agrees to execute any letter consistent with the foregoing that AFG or any Company Affiliate may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Compensation Upon Termination.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Death.</u> 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) subject to execution by the Executive's surviving spouse, or in the absence thereof by an individual holding a Power of Attorney from the Executive upon the date of the Executive's death, or by the Executive's estate, a general release of claims substantially in the form of the release attached hereto as <u>Exhibit A</u> (except as may be revised to reasonably reflect changes in applicable law) within the Release Period as defined in Section 7(f): (x) 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 may have been earned; (y) one hundred percent (100%) accelerated vesting of all unvested restricted stock unit awards, performance share unit awards, and unvested stock options with such vested restricted stock unit awards and performance share unit awards to be settled within sixty (60) days of the Date of Termination with performance-based awards settled based on the greater of target or actual performance (if measurable) through the Date of Termination; (z) extension of the exercise period of vested stock options to the lesser of the twelve (12) month period following the date of the Executive's termination and the remainder of the term of the applicable stock option, (aa) any repayment obligation related to the Special Cash Award shall lapse and any holding period requirement with respect to shares that are subject to RSUs and stock options shall be deemed satisfied and (bb) subject to the foregoing, the Executive's Special RSU Award and Special Performance-Based Stock Option Award will be treated in accordance with the applicable terms of the Incentive Plan or award agreements evidencing such awards ((x) through (bb) referred to herein as the "Death/Disability Severance Benefits"). Except as set forth herein, 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. Except as set forth herein, the Executive's outstanding equity awards granted on and after the Effective Date shall be governed by the terms of the award agreements evidencing such awards. 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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Disability.</u> 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 subject to the Executive (or the Executive's personal representative or an individual holding a Power of Attorney from the Executive upon the Date of Termination) executing a general release of claims substantially in the form of the release attached

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hereto as <u>Exhibit A</u> (except as may be revised to reasonably reflect changes in applicable law) within the Release Period as defined in Section 7(f), the Death/Disability Severance Benefits. Except as set forth herein, the rights of the Executive with respect to the Executive's equity or equity-related awards (including Special RSU Award and Special Performance-Based Stock Option Award) shall be governed by the applicable terms of the Incentive Plan or award agreement evidencing such award. Except as set forth herein, the Executive's outstanding equity awards granted on and after the Effective Date shall be governed by the terms of the award agreements evidencing such awards. Except as set forth herein, the Company and Company Affiliates shall have no further obligations to the Executive under this Agreement upon the 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Termination by the Company for Cause or by the Executive without Good Reason or by the Executive's Failure to Extend the Term.</u> 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 the Executive 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 will forfeit the Executive's rights with respect to all outstanding unvested equity or equity-related awards; provided, however that, the rights of the Executive with respect to the Executive's Special RSU Award and Special Performance-Based Stock Option Award that have not vested will be treated in accordance with the applicable terms of the Incentive Plan or award agreement evidencing such award. Except as set forth herein, the Company and Company Affiliates shall have no further obligations to the Executive under this Agreement upon such termination. If, prior to the first anniversary of the Effective Date, 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), then the Special One-Time Awards shall be forfeited and subject in full to the Clawback/Recoupment provisions in Section 4(g) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Termination by the Company without Cause or by the Company's Failure to Extend the Term or by the Executive with Good Reason.</u> 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 one and one half (1.5) 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 or if no target bonus has been approved by the Company for the year in which such Date of Termination occurs, then the amount of the Executive's target bonus for the immediately preceding year (as applicable, the "Target Bonus"), (2) a lump sum payment equal to the product of (x) the Executive's annual bonus for the calendar year in which the Date of Termination occurs , based on actual performance through the full performance period, 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, with such payment to be made on the same date that other senior executives of the

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Company receive their annual bonuses, but to be made no later than March 15 of the year following the Executive's Date of Termination (the "Termination Year Bonus"), (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, (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 twenty-four (24) 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 whether under applicable law or otherwise; 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 twenty-four (24) months of the Company subsidy of group health plan premiums for the Executive and his eligible dependents, subject to applicable withholdings, (5) any repayment obligation related to the Special Cash Award shall lapse, and (6) the Executive's Special RSU Award and Special Performance-Based Stock Option Award will be treated in accordance with the applicable terms of the Incentive Plan or award agreement evidencing such award Subject to Section 7(h). The lump sum payments described in items (1) and (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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Termination by the Company without Cause or by the Executive with Good Reason in connection with a Change in Control</u>. 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 ninety (90) 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 benefits set forth in Section 7(d)(1) – (6) above, except that (i) the lump payment set forth in Section 7(d)(1) shall instead equal two (2) times the sum of (x) the Executive's Base Salary and (y) the amount of the Executive's Target Bonus; (ii) the Termination Year Bonus set forth in Section 7(d)(2) shall be measured at the Target Bonus level rather than actual performance level and to be paid within sixty (60) days of the Date of Termination. Further, (x) to the extent that the Executive's restricted unit awards are not assumed, replaced or continued, such awards shall immediately vest in full and shall be settled within sixty (60) days of the Change in Control; (y) to the extent that the Executive's performance share unit awards are not assumed, replaced or continued, then such awards shall immediately vest based on the greater of the target or actual performance (or if actual performance cannot be measured at such time, at target performance) as of the date of the Change in Control, to be settled within sixty (60) days of the Change in Control, and (z) notwithstanding the foregoing, if the Incentive Plan (or a successor plan) and applicable award agreement provides for more favorable treatment, such restricted stock unit awards and performance share unit awards shall be governed by the plan and the respective applicable award agreement. With respect to the Executive's outstanding restricted stock unit awards or performance share awards which are assumed, replaced or continued in connection with the Change in Control, such an award shall continue to have terms applicable upon the Executive's termination of employment with the Company (or with a successor or the successor's parent or affiliate, as applicable) which are no less favorable to the Executive than the terms of the

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Incentive Plan (or a successor plan) and respective award agreement in effect immediately prior to the Change in Control.

For purposes of this Agreement, "Change in Control" means the occurrence of one or more of the following events: (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 AFG; (ii) within any twenty-four (24) month period the majority of the Board consists of individuals other than "Incumbent Directors," which term means the members of the 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 shall be considered to be an Incumbent Director; (iii) AFG transfers all or substantially all of its assets or business (unless the shareholders immediately prior to such transaction beneficially own, directly or indirectly, in substantially the same proportion as they owned the Voting Stock of the Company, all of the Voting Stock or other ownership interests of the entity or entities, if any, that succeed to the business of AFG or AFG's ultimate parent company if 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 AFG immediately prior to the transaction hold, directly or indirectly, more than fifty percent (50%) of the Voting Stock of AFG or AFG's ultimate parent company if 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, AFG shall include any entity that succeeds to all or substantially all of the business of 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Liquidated Damages.</u> The parties acknowledge and agree that damages which will result to the Executive for termination of the Executive's employment by the Company due to death or disability under Sections 6(a)(i) and 6(b)(ii)(A), without Cause under 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(a), (b), (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 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 in which the Executive participated and any claim for coverage under AFG'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 <u>Exhibit A</u> (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 (2) 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, within forty-five (45) days of delivery of the release by the Company to the Executive, the Executive (or his estate or spouse as set forth in Section 7(a) or 7(b), as applicable) executes and delivers the release to the Company, and such release has become irrevocable by virtue of the expiration of the revocation period without the release having been revoked (the first such date, the "Release Effective Date" and the forty-five day consideration period plus the applicable revocation period, the "Release Period"). 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 obligations under Sections 6(c) or 8 and has not cured (if curable) any such failure within ten (10) days after being provided

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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 AFG 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>No Offset.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Section 409A</u>. 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, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

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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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) (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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Confidentiality, Non-Disclosure and Non-Competition Agreement.</u> 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 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 and Company Affiliates. 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Non-Disclosure.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

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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 legal department to make any such reports or disclosures and the Executive is not required to notify AFG that the Executive has made such reports or disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Materials.</u> 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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>No Solicitation.</u> During the period commencing on the Effective Date and ending twenty-four (24) months after the Executive's Date of Termination (the "Non-Solicit Period"), the Executive shall not, directly or indirectly through an intermediary, solicit, entice, persuade or induce any individual who is employed by, or who is an independent contractor or consultant to, the Company or any Company Affiliate (or who was so employed or retained within one (1) year prior to the Executive's action, other than any such individual whose employment or engagement was involuntarily terminated by the Company or any Company Affiliate) to terminate or refrain from continuing such employment or engagement 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, independent contractor or consultant of the Company or any Company Affiliate for advice on employment matters, (ii) the Executive's responding to an unsolicited request for a reference regarding any former employee, independent contractor or consultant of the Company or any Company Affiliate from such former employee, independent contractor or consultant, or from a third party, by providing a reference setting forth his personal views about such former employee, independent contractor or consultant, or (iii) hiring or retaining any current or former employee, independent contractor 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, independent contractors

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or consultants of the Company or any Company Affiliate, shall not be deemed a violation of this Section 8(c). Additionally, the Executive shall not, directly or indirectly through an intermediary, solicit or encourage any client, customer, supplier or vendor of the Company or any Company Affiliate, or any person or entity who was a client, customer, supplier or vendor within one year 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Non-Competition</u>. 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 without the prior written consent of the Board, which consent shall not be unreasonably withheld, directly or indirectly own any interest in, manage, control, participate in, consult with, or render services similar to those that the Executive performed on behalf of the Company or Company Affiliates during the last two (2) years of the Executive's employment, or otherwise be or be connected in any manner directly or indirectly, with, (i) any person or entity that is engaged in the same business as the business in which the Company or any Company Affiliate is engaged or (ii) any person or entity that is engaged in a business which otherwise materially competes with any business that the Company or any Company Affiliate conducts or has taken substantial measures to conduct within the next six (6) months (as determined at the Date of Termination) in any state in the United States of America and the District of Columbia or any other jurisdiction in which such business is conducted or in which the Company has taken substantial measures to conduct within the next six (6) months (as applicable) at the Date of Termination and with respect to which the Executive provided services or Company Confidential Information; 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 five percent (5%) of the voting power of such entity and, while employed by the Company 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Compliance with Company's Policies</u>. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Non-Disparagement</u>. 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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Publicity</u>. 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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Cooperation</u>. 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 (5) year period following the termination of the Executive's employment for any reason, to the extent reasonably requested by AFG, 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 the 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Enforcement.</u> 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. If the Executive violates this Section 8, and not withstanding any language to the contrary in any LTI award agreement, it is agreed that (a) any compensation or benefits due to be received by the Executive pursuant to this Agreement or any other agreement, plan or instrument of or with the Company after such violation will immediately cease; (b) the Executive shall forfeit all outstanding, unvested equity awards; (c) the Executive shall repay the Company the after-tax amount of any severance payment or benefit received by him; (d) despite the cessation, forfeiture or repayment of such payment or benefits, the release provided by the Executive in connection with such benefits will remain in full force and effect; and (e) the Company's or any Company Affiliate's remedy of cessation or recoupment of severance payments or benefits to the Executive does not preclude any additional remedies available to the Company or Company Affiliates, including but not limited to injunctive relief. 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

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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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Severability</u>. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Section 280G.</u> 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"), and the Company shall pay the Executive the greater of the Full Payment or the 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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Indemnification.</u> 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 as of the Effective Date or put in place following the Effective Date on the same basis as other current or former officers of AFG with regard to actions or inactions during the period of service as an officer notwithstanding any ceasing of such service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Legal Fees Incurred in Negotiating the Agreement.</u> 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 twenty-five thousand dollars ($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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Notices.</u> 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, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, addressed as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If to AFG:

Ambac Financial Group, Inc.

One World Trade Center, 41st Floor

New York, New York 10007

Attn: General Counsel

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If to the Executive:

David Trick

Address last shown on the Company's records

Each party may designate by notice in writing a new 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, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Severability.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Effect on Other Agreements.</u> This Agreement constitutes the entire agreement between the parties respecting the employment of the Executive and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter, including, but not limited to, the 2016 Agreement. The Executive acknowledges that in consideration for this Agreement, the Executive agrees to waive and fully release the Company and AAC from any claim of "good reason" under the 2016 Agreement. The Executive further acknowledges that in connection with receipt of the consideration included in this Agreement that the Executive hereby irrevocably and unconditionally waives and releases the Company and

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AAC and its directors, officers, employees, and agents from any and all claims, rights, or causes of action, whether known or unknown, that the Executive may have against the Company, AAC, their affiliates, officers, directors, employees, agents, successors, and assigns, arising out of or relating to the Executive's employment, including but not limited to claims under federal, state, or local laws governing employment, discrimination, or retaliation, except for claims that cannot be waived by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Survival.</u> It is the express intention and agreement of the parties hereto that the provisions of Sections 4(g), 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Assignment.</u> 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. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Binding Effect.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Amendment; Waiver.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Headings.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Governing Law.</u> 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).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. <u>Arbitration</u>. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. <u>Counterparts.</u> 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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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. <u>Withholding.</u> 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.

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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.

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| |
|:---|
| AMBAC FINANCIAL GROUP, INC. |
| [ ] |
| [ ] |
| [Title] |
| EXECUTIVE |
| /s/ David Trick |
| David Trick |

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EXHIBIT A

**<u>General Release of Claims</u>** 

Consistent with Section 7 of the Employment Agreement dated September 29, 2025 among me, Ambac Financial Group, Inc. (the "Employment Agreement") and in consideration for and contingent upon my receipt of the Severance Payments set forth in Section 7 of the 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. ("Ambac") and Ambac Assurance Corporation ("AAC") 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 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 or AAC, except that I am not releasing (i) any claims arising under Section 10 of the 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 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 Employment Agreement, (iv) any claims relating to any rights I may have pursuant to equity and equity-related awards granted to me by Ambac, provisions of the 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 AAC 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.

Ambac, AAC 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.

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**<u>Claims Excluded from this Release:</u>** 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 EEOC, NLRB, or any comparable state or local agency. Notwithstanding the foregoing, I agree to waive my right to recover individual relief in any charge, complaint, or lawsuit filed by me or anyone on my behalf. Notwithstanding the foregoing, to the extent that Ambac or AAC 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. Moreover, nothing herein shall prohibit me from reporting possible violations of federal or state law or regulation or cooperating with the Securities and Exchange Commission without notice to the Company (and to receive a whistleblower award provided by law for providing such information).

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 and AAC 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, 41st Floor, 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 or AAC and Ambac or AAC shall be relieved of all obligations to make the Severance Payments described in Section 7 of the Employment Agreement. I may, if I wish, elect to sign this General Release prior to the expiration of the twenty-one (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.

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| | |
|:---|:---|
| AGREED: | |
| _________________<br>David Trick | _______________<br>Date |

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## Exhibit 10.3

Exhibit 10.3

**EMPLOYMENT AGREEMENT** 

This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of September 29, 2025, by and among Ambac Financial Group, Inc., a Delaware corporation ("AFG" or the "Company"), and R. Sharon Smith, an individual (the "Executive").

WHEREAS, the Executive is currently employed as the Executive Vice President, Chief Strategy Officer of both AFG and Ambac Assurance Corporation, a Wisconsin corporation ("AAC") pursuant to that certain employment agreement dated October 5, 2023 (the "2023 Agreement");

WHEREAS, in consideration for this Agreement, the Executive agrees to waive and fully release the Company and AAC from any claim of "good reason" under the 2023 Agreement; and

WHEREAS, the Company and the Executive have agreed to enter into this Agreement on the terms and conditions set forth herein.

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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Employment Agreement.</u> On the terms and conditions set forth in this Agreement, AFG agrees to employ the Executive and the Executive agrees to be employed by AFG for the Employment Period set forth in Section 2 and in the position and with the duties set forth in Section 3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Term.</u> The term of employment under this Agreement shall be for a period beginning on September 29, 2025 (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 either the Company or the Executive provides written notice of its intention not to extend the term of the Agreement at least ninety (90) days' prior to the applicable Renewal Date. For the avoidance of doubt, a failure to extend the term of the Agreement by a party as described in this Agreement shall require affirmative action of such party. The period during which the Executive is employed by AFG hereunder is hereinafter referred to as the "Employment Period."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Position and Duties</u>. During the Employment Period, the Executive shall serve as the Executive Vice President, Group Chief Operating Officer of AFG. In such capacity, the Executive shall report directly to the Chief Executive Officer. During the Employment Period, the Executive shall have the duties, responsibilities and authority as shall be consistent with the Executive's position and such other duties, responsibilities and authority consistent with the Executive's position as may be assigned to the Executive. 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 her 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 Ethics and other policies of the Company as in effect from time to time.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Compensation and Benefits.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Base Salary.</u> 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 five hundred thousand dollars ($500,000) 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 (the "Compensation Committee") of the Board of Directors of AFG (the "Board") 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 AFG's regular payroll procedures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Annual Bonus.</u> For each calendar year that ends during the Employment Period, the Executive shall be eligible to receive an annual bonus pursuant to the Company's annual bonus plan for senior executives. The amount of any such annual bonus paid to the Executive during the Employment Period shall be based on the achievement of pre-established 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 their discretion, whether and to what extent such performance goals are achieved. The Executive's target annual bonus amount shall be seventy-five percent (75%) of the Base Salary, as determined by the Compensation Committee, in its discretion; provided, however, that for calendar year 2025, the Executive's target annual bonus amount shall be the same as the amount set for the Executive's 2024 annual bonus. For the avoidance of doubt, such target 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 AFG, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Long-Term Incentives</u>. During the Employment Period, the Executive shall be eligible to participate in the AFG 2024 Incentive Compensation Plan (the "Incentive Plan") or any successor plan or additional plan of the Incentive Plan, subject to the terms of any such plan, as determined by the Compensation Committee, in its discretion and subject to the terms of this Agreement. Annual equity awards granted to the Executive under the Incentive Plan shall be similar in form and shall have similar terms and conditions (other than amount) as annual equity awards granted to other senior executives of AFG and shall be granted to the Executive during the annual compensation cycle applicable generally to senior executives of AFG. With respect to each calendar year that commences during the Employment Period, commencing with calendar year 2026, the Executive shall receive an annual long-term incentive ("LTI") award with a target amount of six hundred fifty thousand dollars ($650,000), as determined by the Compensation Committee in its discretion. For the avoidance of doubt, such target annual LTI award opportunity does not constitute a guarantee of any LTI payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Special One-Time Awards.</u> The Company shall grant the awards set forth in this Section 4(d) (collectively, the "Special One-Time Awards").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Special Cash Award</u>. No later than thirty (30) days following the Effective Date, the Company shall make a one-time lump sum payment to the Executive in the gross amount equal to one (1) times the Base Salary (the "Special Cash Award").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>Special RSU Award</u>. On the Effective Date if such date is during a Company open window on which equity grants can be made, and if such date is not during such a window, then on the first business day of the first open window on which equity awards can be made following the Effective Date, the Executive shall be granted an award of restricted stock units with a grant-date value of five hundred thousand dollars ($500,000) (the "Special RSU Award"). The Special RSU Award shall vest in full on the first anniversary of the grant date and will be issued under the Incentive Plan and shall be subject to the terms and conditions of the Incentive Plan and the award agreement attached hereto as <u>Exhibit B</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)<u>Special Performance-Based Stock Option Award</u>. On the Effective Date if such date is during a Company open window period on which equity grants can be made, and if such date is not during such a window, then on the first business day of the first open window on which equity awards can be made following the Effective Date, the Executive shall be granted a stock option award for two hundred eighty-four thousand, one hundred twenty-five (284,125) shares of the Company's common stock ("Special Performance-Based Stock Option Award"). The options granted under the Special Performance-Based Stock Option Award shall have an exercise price per share equal to the closing price of a share of the common stock on the date of the grant and shall vest based on a combination of time and the achievement of performance hurdles. The Special Performance-Based Stock Option Award will be issued under the Incentive Plan and shall be subject to the terms and conditions of the Incentive Plan and the award agreement attached hereto as <u>Exhibit C</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Employee Benefits; Perquisites.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Company Compensation Plans</u>. 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 any entity controlled by, in control of, or under common control with, AFG, including without limitation its direct and indirect subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Clawback/Recoupment</u>. 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 (i) any "clawback" or recoupment policy that is applicable to all senior executives of AFG or that is adopted to comply with any applicable law, rule or regulation, or any other requirement, or (ii) any law, rule, requirement or regulation which imposes mandatory recoupment, under circumstances set forth in such law, rule, requirement or regulation. Further, the Company shall have the right to clawback or recoup each of the Special One-Time Awards if the Executive is terminated for "Cause" or voluntarily terminates her employment without Good Reason (it being understood that the Executive's termination due to death or Disability is not a voluntary termination) prior to the twelve (12) month anniversary of the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Stock Ownership Guidelines</u>. The Executive shall be required to hold shares of AFG's common stock as required by any stock ownership policy adopted by the Board (or any committee thereof) from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Treatment of Equity and Equity-related Awards</u>. Notwithstanding any provision of this Agreement to the contrary, an equity or equity-related award, as applicable, granted to the Executive shall be governed by the whichever is more favorable of (i) the terms of the applicable plan or award agreement or the 2023 Agreement if the equity or equity related award was granted prior to the Effective Date, and (ii) the terms of the applicable plan or award agreement or this Agreement if the equity or equity-related award was granted following the Effective Date (including, with respect to the immediately foregoing clauses (i) and (ii), for purposes of determining the Executive rights pursuant to Section 7(d)). For the avoidance of doubt, upon and following vesting of any equity or equity-related awards granted to the Executive at any time, except for recoupment pursuant to clause (i) of Section 4(g), such equity and equity-related awards shall remain vested regardless of the Executive's termination of employment following vesting of the applicable awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Expenses.</u> The Executive is expected and is authorized to incur reasonable expenses in the performance of her duties hereunder. The Company shall reimburse the Executive for all such expenses reasonably and actually

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incurred in accordance with reasonable policies which may be adopted from time to time by the Company promptly upon periodic presentation by the Executive of an itemized account, including reasonable substantiation, of such expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Termination of Employment.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Permitted Terminations.</u> 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Death.</u> The Executive's employment hereunder shall terminate upon the Executive's death;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>By the Company.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) <u>Disability</u>. 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 one hundred eighty (180) days out of any three hundred sixty-five (365) day period or for one hundred twenty (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 her compensation and benefits hereunder, reduced by any benefits actually paid to her under any Company-provided disability insurance policy or plan applicable to her; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <u>Cause.</u> The Company may terminate the Executive's employment 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 her 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 on the Executive's qualifications or ability to perform her duties, or any felony, (iii) the Executive's failure to attempt to perform lawfully assigned duties consistent with her position or to materially comply with the Company's written material policies, including the Company's Code of Business Conduct and Ethics and any Delegation of Authority Policy of AFG, 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 a copy of the resolution duly adopted by the affirmative vote of not less than a majority of the 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 the Board), 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 thirty (30) days from the delivery of written notice by the Company within which to cure any acts constituting Cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>By the Executive.</u> The Executive may terminate her employment for any reason (including Good Reason) or for no reason. If the Executive terminates her employment without Good Reason, then she shall provide written notice to the Company at least forty-five (45) days prior to the Date of Termination.

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For purposes of this Agreement, "Good Reason" means (i) any material 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 or target annual bonus, other than a uniform reduction applied to substantially all senior executive officers of AFG that does not result in a reduction of more than five percent (5%) of any of the Executive's Base Salary or reduction of the Executive's grant date target value of the annual LTI award below four hundred thousand dollars ($400,000)), (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 of this Agreement, or (vii) non-renewal of the Agreement by the Company regardless of whether the Executive's employment terminates. 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, provided, however, that there shall be no cure for a non-renewal of the Employment Agreement as described in the immediately foregoing clause (vii) of this definition. In order to terminate her 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. The Executive acknowledges that, as of the Effective Date, no event that would constitute Good Reason has occurred. The Executive further acknowledges that in the event the Executive is on a period of leave due to a disability and the Company promotes or hires on an interim basis an individual who has a title, if any, that is designated, and who is identified, as "interim" to complete the duties and responsibilities set forth herein solely during the period of such disability, the Executive shall not be permitted to claim "Good Reason" under subsections (i) or (ii) herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Termination</u>. 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), thirty (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 pursuant to Section 2, the applicable Renewal Date notwithstanding a termination of the Executive's employment by the Company following the date of notice of nonrenewal and prior to 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Resignation of All Other Positions</u>. 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 or any Company Affiliate and as a fiduciary with respect to any benefit plan (or related trust)

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sponsored by AFG or any Company Affiliate. The Executive agrees to execute any letter consistent with the foregoing that AFG or any Company Affiliate may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Compensation Upon Termination.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Death.</u> 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) subject to execution by the Executive's surviving spouse, or in the absence thereof by an individual holding a Power of Attorney from the Executive upon the date of the Executive's death, or by the Executive's estate, a general release of claims substantially in the form of the release attached hereto as <u>Exhibit A</u> (except as may be revised to reasonably reflect changes in applicable law) within the Release Period as defined in Section 7(f): (x) 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 may have been earned; (y) one hundred percent (100%) accelerated vesting of all unvested restricted stock unit awards, performance share unit awards, and unvested stock options with such vested restricted stock unit awards and performance share unit awards to be settled within sixty (60) days of the Date of Termination with performance-based awards settled based on the greater of target or actual performance (if measurable) through the Date of Termination; (z) extension of the exercise period of vested stock options to the lesser of the twelve (12) month period following the date of the Executive's termination and the remainder of the term of the applicable stock option, (aa) any repayment obligation related to the Special Cash Award shall lapse and any holding period requirement with respect to shares that are subject to RSUs and stock options shall be deemed satisfied and (bb) subject to the foregoing, the Executive's Special RSU Award and Special Performance-Based Stock Option Award will be treated in accordance with the applicable terms of the Incentive Plan or award agreements evidencing such awards ((x) through (bb) referred to herein as the "Death/Disability Severance Benefits"). Except as set forth herein, 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. Except as set forth herein, the Executive's outstanding equity awards granted on and after the Effective Date shall be governed by the terms of the award agreements evidencing such awards. Except as set forth herein, the Company and Company Affiliates shall have no further obligation to the Executive or her legal representatives, estate or heirs upon her 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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Disability.</u> 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 subject to the Executive (or the Executive's personal representative or an individual holding a Power of Attorney from the Executive upon the Date of Termination) executing a general release of claims substantially in the form of the release attached

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hereto as <u>Exhibit A</u> (except as may be revised to reasonably reflect changes in applicable law) within the Release Period as defined in Section 7(f), the Death/Disability Severance Benefits. Except as set forth herein, the rights of the Executive with respect to the Executive's equity or equity-related awards (including Special RSU Award and Special Performance-Based Stock Option Award) shall be governed by the applicable terms of the Incentive Plan or award agreement evidencing such award. Except as set forth herein, the Executive's outstanding equity awards granted on and after the Effective Date shall be governed by the terms of the award agreements evidencing such awards. Except as set forth herein, the Company and Company Affiliates shall have no further obligations to the Executive under this Agreement upon the 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Termination by the Company for Cause or by the Executive without Good Reason or by the Executive's Failure to Extend the Term.</u> 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 her employment without Good Reason pursuant to Section 6(a)(iii) or the Executive 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 her 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 will forfeit the Executive's rights with respect to all outstanding unvested equity or equity-related awards; provided, however that, the rights of the Executive with respect to the Executive's Special RSU Award and Special Performance-Based Stock Option Award that have not vested will be treated in accordance with the applicable terms of the Incentive Plan or award agreement evidencing such award. Except as set forth herein, the Company and Company Affiliates shall have no further obligations to the Executive under this Agreement upon such termination. If, prior to the first anniversary of the Effective Date, the Company terminates the Executive's employment for Cause pursuant to Section 6(a)(ii)(B) or the Executive terminates her employment without Good Reason pursuant to Section 6(a)(iii), then the Special One-Time Awards shall be forfeited and subject in full to the Clawback/Recoupment provisions in Section 4(g) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Termination by the Company without Cause or by the Company's Failure to Extend the Term or by the Executive with Good Reason.</u> 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 her 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 her compliance with the restrictive covenants in Section 8 and the other requirements of this Agreement and her 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 one and one half (1.5) 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 or if no target bonus has been approved by the Company for the year in which such Date of Termination occurs, then the amount of the Executive's target bonus for the immediately preceding year (as applicable, the "Target Bonus"), (2) a lump sum payment equal to the product of (x) the Executive's annual bonus for the calendar year in which the Date of Termination occurs , based on actual performance through the full performance period, 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, with such payment to be made on the same date that other senior executives of the

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Company receive their annual bonuses, but to be made no later than March 15 of the year following the Executive's Date of Termination (the "Termination Year Bonus"), (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, (4) provided the Executive and her 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 twenty-four (24) 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 whether under applicable law or otherwise; 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 twenty-four (24) months of the Company subsidy of group health plan premiums for the Executive and her eligible dependents, subject to applicable withholdings, (5) any repayment obligation related to the Special Cash Award shall lapse, and (6) the Executive's Special RSU Award and Special Performance-Based Stock Option Award will be treated in accordance with the applicable terms of the Incentive Plan or award agreement evidencing such award Subject to Section 7(h). The lump sum payments described in items (1) and (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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Termination by the Company without Cause or by the Executive with Good Reason in connection with a Change in Control</u>. 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 her employment with Good Reason pursuant to Section 6(a)(iii), in each case either (i) in contemplation of and no more than ninety (90) 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 her compliance with the restrictive covenants in Section 8 and the other requirements of this Agreement and her execution and non-revocation of the release described in Section 7(f), the Executive shall receive the benefits set forth in Section 7(d)(1) – (6) above, except that (i) the lump payment set forth in Section 7(d)(1) shall instead equal two (2) times the sum of (x) the Executive's Base Salary and (y) the amount of the Executive's Target Bonus; (ii) the Termination Year Bonus set forth in Section 7(d)(2) shall be measured at the Target Bonus level rather than actual performance level and to be paid within sixty (60) days of the Date of Termination. Further, (x) to the extent that the Executive's restricted unit awards are not assumed, replaced or continued, such awards shall immediately vest in full and shall be settled within sixty (60) days of the Change in Control; (y) to the extent that the Executive's performance share unit awards are not assumed, replaced or continued, then such awards shall immediately vest based on the greater of the target or actual performance (or if actual performance cannot be measured at such time, at target performance) as of the date of the Change in Control, to be settled within sixty (60) days of the Change in Control, and (z) notwithstanding the foregoing, if the Incentive Plan (or a successor plan) and applicable award agreement provides for more favorable treatment, such restricted stock unit awards and performance share unit awards shall be governed by the plan and the respective applicable award agreement. With respect to the Executive's outstanding restricted stock unit awards or performance share awards which are assumed, replaced or continued in connection with the Change in Control, such an award shall continue to have terms applicable upon the Executive's termination of employment with the Company (or with a successor or the successor's parent or affiliate, as applicable) which are no less favorable to the Executive than the

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terms of the Incentive Plan (or a successor plan) and respective award agreement in effect immediately prior to the Change in Control.

For purposes of this Agreement, "Change in Control" means the occurrence of one or more of the following events: (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 AFG; (ii) within any twenty-four (24) month period the majority of the Board consists of individuals other than "Incumbent Directors," which term means the members of the 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 shall be considered to be an Incumbent Director; (iii) AFG transfers all or substantially all of its assets or business (unless the shareholders immediately prior to such transaction beneficially own, directly or indirectly, in substantially the same proportion as they owned the Voting Stock of the Company, all of the Voting Stock or other ownership interests of the entity or entities, if any, that succeed to the business of AFG or AFG's ultimate parent company if 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 AFG immediately prior to the transaction hold, directly or indirectly, more than fifty percent (50%) of the Voting Stock of AFG or AFG's ultimate parent company if 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, AFG shall include any entity that succeeds to all or substantially all of the business of 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Liquidated Damages.</u> The parties acknowledge and agree that damages which will result to the Executive for termination of the Executive's employment by the Company due to death or disability under Sections 6(a)(i) and 6(b)(ii)(A), without Cause under 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(a), (b), (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 claims that the Executive may make by reason of any such termination of her 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 in which the Executive participated and any claim for coverage under AFG'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 <u>Exhibit A</u> (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 (2) 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, within forty-five (45) days of delivery of the release by the Company to the Executive, the Executive (or her estate or spouse as set forth in Section 7(a) or 7(b), as applicable) executes and delivers the release to the Company, and such release has become irrevocable by virtue of the expiration of the revocation period without the release having been revoked (the first such date, the "Release Effective Date" and the forty-five day consideration period plus the applicable revocation period, the "Release Period"). 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 her obligations under Sections 6(c) or 8 and has not cured (if curable) any such failure within ten (10) days after being provided

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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 AFG 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>No Offset.</u> In the event of termination of her 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 her on account of any remuneration or benefits provided by any subsequent employment she 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 her for any reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Section 409A</u>. 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, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

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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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) (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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Confidentiality, Non-Disclosure and Non-Competition Agreement.</u> 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 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 her employment by the Company or in connection with her duties with the Company and Company Affiliates. 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 her 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:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Non-Disclosure.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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

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Confidential Information, to the extent the Executive is legally permitted to do so, she 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 legal department to make any such reports or disclosures and the Executive is not required to notify AFG that the Executive has made such reports or disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 based on the reporting of a suspected violation of law may disclose a trade secret to her 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Materials.</u> 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 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 her electronic address books), information relating to her compensation or relating to reimbursement of expenses, information that she reasonably believes may be needed for tax purposes, and copies of plans, programs and agreements relating to her employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>No Solicitation.</u> During the period commencing on the Effective Date and ending twenty-four (24) months after the Executive's Date of Termination (the "Non-Solicit Period"), the Executive shall not, directly or indirectly through an intermediary, solicit, entice, persuade or induce any individual who is employed by, or who is an independent contractor or consultant to, the Company or any Company Affiliate (or who was so employed or retained within one (1) year prior to the Executive's action, other than any such individual whose employment or engagement was involuntarily terminated by the Company or any Company Affiliate) to terminate or refrain from continuing such employment or engagement 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, independent contractor or consultant of the Company or any Company Affiliate for advice on employment matters, (ii) the Executive's responding to an unsolicited request for a reference regarding any former employee, independent contractor or consultant of the Company or any Company Affiliate from such former employee, independent contractor or consultant, or from a third party, by providing a reference setting forth her personal views about such former employee, independent contractor or consultant, or (iii) hiring or retaining any current or former employee, independent contractor 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, independent contractors

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or consultants of the Company or any Company Affiliate, shall not be deemed a violation of this Section 8(c). Additionally, the Executive shall not, directly or indirectly through an intermediary, solicit or encourage any client, customer, supplier or vendor of the Company or any Company Affiliate, or any person or entity who was a client, customer, supplier or vendor within one year 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Non-Competition</u>. 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 without the prior written consent of the Board, which consent shall not be unreasonably withheld, directly or indirectly own any interest in, manage, control, participate in, consult with, or render services similar to those that the Executive performed on behalf of the Company or Company Affiliates during the last two (2) years of the Executive's employment, or otherwise be or be connected in any manner directly or indirectly, with, (i) any person or entity that is engaged in the same business as the business in which the Company or any Company Affiliate is engaged or (ii) any person or entity that is engaged in a business which otherwise materially competes with any business that the Company or any Company Affiliate conducts or has taken substantial measures to conduct within the next six (6) months (as determined at the Date of Termination) in any state in the United States of America and the District of Columbia or any other jurisdiction in which such business is conducted or in which the Company has taken substantial measures to conduct within the next six (6) months (as applicable) at the Date of Termination and with respect to which the Executive provided services or Company Confidential Information; 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 her direct holdings in any such entity shall not in the aggregate constitute more than five percent (5%) of the voting power of such entity and, while employed by the Company 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, she 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Compliance with Company's Policies</u>. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Non-Disparagement</u>. During the period commencing on the Effective Date and continuing thereafter, the Executive, other than in the good faith performance of her 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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Publicity</u>. 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 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Cooperation</u>. 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 (5) year period following the termination of the Executive's employment for any reason, to the extent reasonably requested by AFG, 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 the Executive's travel to the extent reasonably possible. The cooperation includes the Executive making herself available for reasonable periods of time (with due regard for her 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Enforcement.</u> 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. If the Executive violates this Section 8, and not withstanding any language to the contrary in any LTI award agreement, it is agreed that (a) any compensation or benefits due to be received by the Executive pursuant to this Agreement or any other agreement, plan or instrument of or with the Company after such violation will immediately cease; (b) the Executive shall forfeit all outstanding, unvested equity awards; (c) the Executive shall repay the Company the after-tax amount of any severance payment or benefit received by her; (d) despite the cessation, forfeiture or repayment of such payment or benefits, the release provided by the Executive in connection with such benefits will remain in full force and effect; and (e) the Company's or any Company Affiliate's remedy of cessation or recoupment of severance payments or benefits to the Executive does not preclude any additional remedies available to the Company or Company Affiliates, including but not limited to injunctive relief. 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

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Company prior to the Date of Termination shall not release the Executive from compliance with her 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Severability</u>. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Section 280G.</u> 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"), and the Company shall pay the Executive the greater of the Full Payment or the 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.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Indemnification.</u> 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 her termination of employment, the Executive shall be entitled to liability insurance coverage pursuant to any directors' and officers' liability insurance policy maintained by AFG as of the Effective Date or put in place following the Effective Date on the same basis as other current or former officers of AFG with regard to actions or inactions during the period of service as an officer notwithstanding any ceasing of such service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Legal Fees Incurred in Negotiating the Agreement.</u> 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 twenty-five thousand dollars ($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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Notices.</u> 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, mailed by first-class registered or certified mail, return receipt requested, postage prepaid, delivered by overnight air courier, addressed as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) If to AFG:

Ambac Financial Group, Inc.

One World Trade Center, 41st Floor

New York, New York 10007

Attn: General Counsel

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If to the Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;R. Sharon Smith

Address last shown on the Company's records

Each party may designate by notice in writing a new 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, 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Severability.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Effect on Other Agreements.</u> This Agreement constitutes the entire agreement between the parties respecting the employment of the Executive and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter, including, but not limited to, the 2023 Agreement. The Executive acknowledges that in consideration for this Agreement, the Executive agrees to waive and fully release the Company and AAC from any claim of "good reason" under the 2023 Agreement. The Executive further acknowledges that in connection with receipt of the consideration included in this Agreement that the Executive hereby irrevocably and unconditionally waives and releases the Company and

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AAC and its directors, officers, employees, and agents from any and all claims, rights, or causes of action, whether known or unknown, that the Executive may have against the Company, AAC, their affiliates, officers, directors, employees, agents, successors, and assigns, arising out of or relating to the Executive's employment, including but not limited to claims under federal, state, or local laws governing employment, discrimination, or retaliation, except for claims that cannot be waived by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Survival.</u> It is the express intention and agreement of the parties hereto that the provisions of Sections 4(g), 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Assignment.</u> 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. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Binding Effect.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Amendment; Waiver.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Headings.</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Governing Law.</u> 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).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. <u>Arbitration</u>. 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. <u>Counterparts.</u> 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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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. <u>Withholding.</u> 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.

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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.

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| |
|:---|
| AMBAC FINANCIAL GROUP, INC. |
| [ ] |
| [ ] |
| [Title] |
| EXECUTIVE |
| /s/ R. Sharon Smith |
| R. Sharon Smith |

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EXHIBIT A

**<u>General Release of Claims</u>** 

Consistent with Section 7 of the Employment Agreement dated September 29, 2025 among me, Ambac Financial Group, Inc. (the "Employment Agreement") and in consideration for and contingent upon my receipt of the Severance Payments set forth in Section 7 of the 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. ("Ambac") and Ambac Assurance Corporation ("AAC") 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 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 or AAC, except that I am not releasing (i) any claims arising under Section 10 of the 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 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 Employment Agreement, (iv) any claims relating to any rights I may have pursuant to equity and equity-related awards granted to me by Ambac, provisions of the 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 AAC 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.

Ambac, AAC 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.

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**<u>Claims Excluded from this Release:</u>** 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 EEOC, NLRB, or any comparable state or local agency. Notwithstanding the foregoing, I agree to waive my right to recover individual relief in any charge, complaint, or lawsuit filed by me or anyone on my behalf. Notwithstanding the foregoing, to the extent that Ambac or AAC 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. Moreover, nothing herein shall prohibit me from reporting possible violations of federal or state law or regulation or cooperating with the Securities and Exchange Commission without notice to the Company (and to receive a whistleblower award provided by law for providing such information).

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 and AAC 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, 41st Floor, 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 or AAC and Ambac or AAC shall be relieved of all obligations to make the Severance Payments described in Section 7 of the Employment Agreement. I may, if I wish, elect to sign this General Release prior to the expiration of the twenty-one (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.

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| | |
|:---|:---|
| AGREED: | |
| _________________<br>R. Sharon Smith | _______________<br>Date |

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## Exhibit 10.4

**Exhibit 10.4**

**AMBAC FINANCIAL GROUP, INC.**

**RESTRICTED STOCK UNIT AGREEMENT**

**FOR SPECIAL RSU AWARD**

Effective as of [_], 2025 (the "Grant Date"), [[FIRSTNAME]] [[LASTNAME]] (the "Participant") has been granted a Full Value Award under the Ambac Financial Group, Inc. 2024 Incentive Compensation Plan (the "Incentive Plan") in the form of restricted stock units. In addition to the terms and conditions of the Incentive Plan, the Award shall be subject to the following terms and conditions (sometimes referred to as this "Agreement").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Defined Terms</u>. Capitalized terms used in this Agreement which are not otherwise defined herein shall have the meaning specified in the Incentive Plan or in the Employment Agreement between Ambac and the Participant, dated as of September 29, 2025 (the "Employment Agreement").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Grant of Restricted Stock Units</u>. Subject to the terms of this Agreement and the Incentive Plan, effective as of the Grant Date the Participant is hereby granted an award of restricted stock units with a grant-date value of [[RSUGRANTDATEVALUE]] (the "Restricted Stock Units"). This Award contains the right to dividend equivalents ("Dividend Equivalents") as described in Section 3. Each Restricted Stock Unit shall become vested as described in Section 4 and each vested Restricted Stock Unit shall be settled in accordance with Section 6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Dividend Equivalents</u>. The Participant shall be entitled to Dividend Equivalents, which may consist of Deferred Cash Dividend Equivalents or Dividend Equivalent Units (each as defined below), in accordance with the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)If a dividend with respect to shares of Common Stock is payable in cash, then, as of the applicable dividend payment date, the Participant shall be credited with a right to receive a "Deferred Cash Dividend Equivalents" equal to (i) the cash dividend payable with respect to a share of Common Stock, multiplied by (ii) the number of Restricted Stock Units outstanding (i.e., the number of Restricted Stock Units granted hereunder less the number of such Restricted Stock Units that have settled in accordance with Section 6 below) on the applicable dividend record date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)If a dividend with respect to shares of Common Stock is payable in shares of Common Stock, then, as of the dividend payment date, the Participant shall be credited with that number of "Dividend Equivalent Units" equal to (i) the number of shares of Common Stock distributed in the dividend with respect to a share of Common Stock, multiplied by (ii) the number of Restricted Stock Units outstanding on the applicable dividend record date plus the number of previously credited Dividend Equivalent Units with respect to such Restricted Stock Units, if any.

Dividend Equivalents shall be subject to the same vesting provisions as the Restricted Stock Units to which they relate and shall be settled in accordance with Section 6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Vesting and Forfeiture of Awards</u>. All Restricted Stock Units and Dividend Equivalents shall be unvested unless and until they become vested and nonforfeitable in accordance with this Section

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4. Subject to the Participant's continuing service as an employee of Ambac Financial Group, Inc. ("Ambac"), or its subsidiaries, through the vesting date, and the terms and conditions of this Agreement and the Incentive Plan, the Restricted Stock Units and associated Dividend Equivalents shall vest in full one (1) year following the Grant Date. Except as provided in Section 5, if the Participant's date of termination of employment with Ambac and its subsidiaries (the "Termination Date") occurs for any reason prior to the vesting date, all Restricted Stock Units and associated Dividend Equivalent Units which are not vested upon the Participant's Termination Date shall immediately expire and shall be forfeited and the Participant shall have no further rights with respect to such Restricted Stock Units or associated Dividend Equivalents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Termination of Employment</u>. Notwithstanding the provisions of Section 4, if the Participant's Termination Date occurs by reason of (i) Disability (as defined in the Employment Agreement), (ii) involuntary termination by the Company other than for Cause (as defined in the Employment Agreement), (iii) termination by the Participant for Good Reason (as defined in the Employment Agreement), (iv) the Company fails to extend the term of the Employment Agreement pursuant to terms of the Employment Agreement (assuming no Cause exists) or (v) death, all unvested Restricted Stock Units and associated Dividend Equivalents shall become vested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Settlement</u>. Subject to the terms and conditions of this Agreement, Restricted Stock Units and associated Dividend Equivalents that have become vested in accordance with Section 4 or Section 5 shall be settled as soon as practicable but no later than sixty (60) days after the first to occur of (i) five (5) years following the Grant Date and (ii) the Participant's Termination Date. Solely in relation to a Termination Date after the one (1) year anniversary of the Grant Date, a termination of employment of the Participant with the Company for any reason shall be treated as a termination without Cause. In addition, that portion of the Restricted Stock Units and Dividend Equivalents which have vested shall not be forfeited upon a termination of the Participant's employment, except pursuant to a recoupment policy of the Company generally applicable to the Company's executive officers. Subject to the foregoing, settlement of vested Restricted Stock Units and associated Dividend Equivalent Units shall be made in the form of shares of Common Stock with one share of Common Stock being issued in settlement of each Restricted Stock Unit and associated Dividend Equivalent Unit (any fractional share being rounded up to the next whole unit), except that upon a Change in Control (as defined in the Employment Agreement) by an acquirer whose shares are not traded on a nationally recognized exchange, such settlement shall be paid in cash. Settlement of Deferred Cash Dividend Equivalents on the vesting date of the underlying Restricted Stock Units to which they relate shall be paid in cash. Upon the settlement of any vested Restricted Stock Units and Dividend Equivalent Units, such Restricted Stock Units and Dividend Equivalent Units shall be cancelled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Withholding</u>. All Awards and payments under this Agreement are subject to withholding of all applicable taxes. The Company shall have the right to deduct from payments of any kind otherwise due to the Participant any federal, state, or local taxes of any kind required by applicable law to be withheld with respect to the vesting of or other lapse of restrictions applicable to the Award. Such withholding obligations may also be satisfied through withholding shares of Common Stock otherwise issuable to the Participant. The shares of Common Stock so withheld shall have an aggregate Fair Market Value equal to such withholding obligation. The Fair Market Value of the shares of Common Stock used to satisfy such withholding obligation shall be determined by the Company as of the date on which the amount of tax to be withheld is to be determined. The maximum number of shares of Common Stock that may be withheld

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from the Award to satisfy any federal, state, or local tax withholding requirements upon the exercise, vesting, or lapse of restrictions applicable to the Award or payment of shares of Common Stock pursuant to the Award, as applicable, may not exceed such number of shares of Stock having a Fair Market Value equal to the minimum statutory amount required by the Company to be withheld and paid to any such federal, state, or local taxing authority with respect to such exercise, vesting, lapse of restrictions, or payment of shares of Common Stock; provided, however, as long as Accounting Standards Update 2016-09 or a similar rule is otherwise in effect, the Committee has full discretion to choose, or to allow the Participant to elect, to withhold a number of shares of Common Stock having an aggregate Fair Market Value that is greater than the applicable minimum required statutory withholding obligation (but such withholding may in no event be in excess of the maximum statutory withholding amount(s) in the Participant's relevant tax jurisdictions). If the Committee allows, the Participant may also (i) pay in cash to the Company any amount that the Company may reasonably determine to be necessary to satisfy such withholding obligation, or (ii) elect to satisfy such withholding obligation, in whole or in part, by delivering to the Company shares of Common Stock already owned by the Participant that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements. The shares of Common Stock so delivered shall have an aggregate Fair Market Value equal to such withholding obligation. The Fair Market Value of the shares of Common Stock used to satisfy such withholding obligation shall be determined by the Company as of the date on which the amount of tax to be withheld is to be determined.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Transferability</u>. This Award is not transferable except as designated by the Participant by will or by the laws of descent and distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Heirs and Successors</u>. If any benefits deliverable to the Participant under this Agreement have not been delivered at the time of the Participant's death, such rights shall be delivered to the Participant's estate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.<u>Administration</u>. The authority to administer and interpret this Agreement shall be vested in the Committee, and the Committee shall have all the powers with respect to this Agreement as it has with respect to the Incentive Plan. Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding on all persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.<u>Adjustment of Award</u>. In the event of a stock dividend, stock split, reverse stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, exchange of shares, sale of assets or subsidiaries, combination, or other corporate transaction that affects the Common Stock, the Committee shall, in order to preserve the benefits or prevent the enlargement of benefits of this Award, and in the manner it determines equitable in its sole discretion, (a) adjust the number and kind of shares subject to this Award and (b) make any other adjustments that the Committee determines to be equitable (which may include, without limitation, (i) replacement of this Award with other Awards which the Committee determines have comparable value and which are based on stock of a company resulting from the transaction, and (ii) cancellation of this Award in return for cash payment of the then current value of this Award, determined as though this Award is fully vested at the time of payment).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Clawback</u>. The Restricted Stock Units shall be subject to mandatory repayment by the Participant to the Company (a) as provided in the Employment Agreement and (b) to the extent the Participant is, or in the future becomes, subject to (i) any Company clawback, recoupment or similar policy that is applicable to all senior executives of the Company, or (ii) any law, rule, requirement or

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regulation which imposes mandatory recoupment, under circumstances set forth in such law, rule, requirement or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Notices</u>. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, through Ambac's stock compensation administration system or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to the Company at its principal offices, to the Participant at the Participant's address as last known by the Company or, in either case, such other address as one party may designate in writing to the other.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.<u>Governing Law</u>. The validity, construction and effect of this Agreement shall be determined in accordance with the laws of the State of New York and applicable federal law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.<u>Amendments</u>. The Board of Directors may, at any time, amend or terminate the Incentive Plan, and the Board of Directors or the Committee may amend this Agreement, provided that no amendment or termination may, in the absence of written consent to the change by the Participant (or, if the Participant is not then living, the Participant's beneficiary), adversely affect the rights that the Participant or beneficiary under this Agreement has prior to the date such amendment or termination is adopted by the Board of Directors or the Committee, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.<u>Award Not Contract of Employment</u>. The Award does not constitute a contract of employment or continued service, and the grant of the Award will not give the Participant the right to be retained in the employ or service of the Company or any Subsidiary, nor any right or claim to any benefit under the Incentive Plan or this Agreement, unless such right or claim has specifically accrued under the terms of the Incentive Plan and this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.<u>Severability</u>. If a provision of this Agreement is held invalid by a court of competent jurisdiction, the remaining provisions will nonetheless be enforceable according to their terms. Further, if any provision is held to be overbroad as written, that provision shall be amended to narrow its application to the extent necessary to make the provision enforceable according to applicable law and enforced as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.<u>Incentive Plan Governs</u>. The Award evidenced by this Agreement is granted pursuant to the Incentive Plan, and the Restricted Stock Units, Dividend Equivalent Units and this Agreement are in all respects governed by the Incentive Plan and subject to all of the terms and provisions thereof, whether such terms and provisions are incorporated in this Agreement by reference or are expressly cited, provided, however that the terms of this Agreement shall not amend or otherwise reduce the rights of the Participant under the Employment Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.<u>Special Section 409A Rules</u>. To the fullest extent possible, amounts and other benefits payable under the Agreement are intended to comply with or be exempt from the provisions of section 409A of the Code. This Agreement will be interpreted and administered to the extent possible in a manner consistent with the foregoing statement of intent; provided, however, that the Company does not guarantee the tax treatment of the Award. Notwithstanding any other provision of this Agreement to the contrary, if any payment or benefit hereunder is subject to section 409A of the Code, and if such payment or benefit is to be paid or provided on account of the Participant's termination of employment (or other separation from service):

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)and if the Participant is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code) and if any such payment or benefit is required to be made or provided prior to the first day of the seventh month following the Participant's separation from service or termination of employment, such payment or benefit shall be delayed until the first day of the seventh month following the Participant's separation from service; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)the determination as to whether the Participant has had a termination of employment (or separation from service) shall be made in accordance with the provisions of section 409A of the Code and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder.

## Exhibit 10.5

**AMBAC FINANCIAL GROUP, INC.**

**PERFORMANCE STOCK OPTION AGREEMENT**

**FOR SPECIAL PERFORMANCE-BASED STOCK OPTION AWARD**

Effective as of [_], 2025 (the "Grant Date"), [[FIRSTNAME]] [[LASTNAME]] (the "Participant") has been granted an Award under the Ambac Financial Group, Inc. 2024 Incentive Compensation Plan (the "Incentive Plan") which shall consist of an option to purchase shares of Common Stock of Ambac Financial Group, Inc. ("Ambac," and together with its Subsidiaries, the "Company"). In addition to the terms and conditions of the Incentive Plan the Award shall be subject to the following terms and conditions (sometimes referred to as this "Agreement").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Defined Terms</u>. Capitalized terms used in this Agreement which are not otherwise defined herein shall have the meaning specified in the Incentive Plan or in the Employment Agreement between Ambac and the Participant, dated as of September 29, 2025 (the "Employment Agreement").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Grant of Option</u>. Subject to the conditions contained herein and in the Incentive Plan, Ambac grants to the Participant, as of the Grant Date, an option to purchase the number of shares of Common Stock (the "Option") specified on Annex A of this Agreement ("Annex A") which is incorporated into and forms part of this Agreement, at an exercise price (the "Exercise Price") specified on Annex A. The shares of Common Stock issuable upon exercise of the Option are from time to time referred to herein as the "Option Shares." The grant of an Option shall impose no obligation on the part of the Participant to exercise the Option. The Option shall vest and be exercisable as hereinafter provided.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Terms and Conditions of the Option</u>. The Option is granted subject to the following terms and conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Vesting; Exercisability</u>. The Option shall vest and become exercisable in accordance with the vesting schedule set forth on Annex A, unless the Option has earlier vested or been forfeited in accordance with the terms hereof. The portion of the Option, if any, that may become vested pursuant to the terms of this Agreement (such portion of the Option, the "Earned Option") will depend on the Participant's continued employment with the Company through the date specified in Annex A (the "Service Goal") and will be calculated based on the attainment, as determined by the Committee, of the performance hurdles specified in Annex A (the "Performance Hurdles") over the Performance Period (as defined in Annex A), which Earned Option may be equal to all or a portion of the Option, including none.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Term of the Option</u>. The Option shall terminate and no longer be exercisable on the earlier of (i) the tenth (10<sup>th</sup>) anniversary of the Grant Date or (ii) the date specified for termination of the Option in Section 4 and Section 5; provided, however, if the termination date falls on a date which the Participant is prohibited by Company policy in effect on such date, from engaging in transactions in the Company's securities, such termination date shall be extended to the first date that the Participant is permitted to engage in transactions in the Company's securities under such Company policy.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Stockholder Rights</u>. The Participant shall have no rights as a stockholder with respect to any shares of Common Stock issuable upon exercise of the Option until the Participant shall become the holder of record thereof, and no adjustment shall be made for dividends or distributions or other rights in respect of any share for which the record date is prior to the date upon which the Participant shall become the holder of record thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Non-qualified Status of the Option</u>. The Option granted hereby is not intended to qualify, and shall not be treated, as an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Termination of Employment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Except as provided in this Section 4, if the Participant's termination of employment or service with the Company (the "Termination Date") occurs for any reason prior to the last day of the Performance Period, the Participant's right to the Option shall expire and be forfeited immediately and the Participant shall have no further rights with respect to the Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Notwithstanding the provisions of Section 4(a), if the Participant's Termination Date occurs prior to the last day of the Performance Period by reason of either (i) Disability (as defined in the Employment Agreement), (ii) involuntary termination by the Company other than for Cause (as defined in the Employment Agreement), (iii) termination by the Participant for Good Reason (as defined in the Employment Agreement), (iv) failure of the Company to extend the Employment Agreement pursuant to terms of the Employment Agreement (assuming no Cause exists) or (v) death, the Service Goal will be deemed satisfied and the Option will continue by its terms through the Performance Period after which any Earned Option will be calculated based on the attainment of the Performance Hurdles as described in Annex A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Notwithstanding the provisions of Section 4(a), if both (i) the Participant's Termination Date occurs prior to the last day of the Performance Period by reason of either (A) involuntary termination by the Company other than for Cause, (B) termination by the Participant for Good Reason or (C) failure of the Company to extend the Employment Agreement pursuant to terms of the Employment Agreement (assuming no Cause exists), and (ii) such Termination Date occurs with ninety (90) days prior to or within twelve (12) months following a Change in Control, the Service Goal will be deemed satisfied and any Earned Option will be calculated utilizing the Change in Control Price, as defined and described in Annex A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Notwithstanding the provisions of Section 4(a), if the Participant's Termination Date occurs following the one (1) year anniversary of the Grant Date by reason of either (i) involuntary termination by the Company for Cause or (ii) termination by the Participant without Good Reason, the Service Goal will be deemed satisfied and the Option will continue by its terms through the Performance Period after which any Earned Option will be calculated based on the attainment of the Performance Hurdles as described in Annex A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Exercise</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Notice of Exercise</u>. Subject to this Section 5 and Section 4 hereof, the Participant may exercise all or any portion of the Option (to the extent vested) by giving notice of exercise to the Company or the Company's agent. The date of exercise of an Option shall be the later of (i) the date on which the Company or the Company's agent receives such notice, or (ii) the date on which the conditions provided in Section 5(b) are satisfied. Notwithstanding any other provision of this Agreement, the Participant may not exercise the Option, whether in whole or in part, and no Option Shares will be issued by the Company in respect of any such attempted exercise, at any time when such exercise is prohibited by Company policy then in effect concerning transactions by the Participant in the Company's securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Payment</u>. Prior to the issuance of the Option Shares in respect of which all or a portion of the Option shall have been exercised, the Participant shall have paid to the Company the Exercise Price for all Option Shares purchased pursuant to the exercise of such Option. Payment may be made by personal check, bank draft or postal or express money order (such modes of payment are collectively referred to as "cash") payable to the order of the Company in United States dollars. Payment may also be made in mature shares of Common Stock owned by the Participant, or in any combination of cash or such mature shares as the Committee in its sole discretion may approve. Such shares shall be valued at their Fair Market Value as of the date of exercise. Payment of the Exercise Price in mature shares of Common Stock owned by the Participant shall be made by delivering to the Company the share certificate(s) representing the required number of shares, with the Participant signing his or her name on the back, or by attaching executed stock powers (with the signature of the Participant guaranteed in either case); payment of the exercise price in mature shares of Common Stock owned by the Participant may also be made through constructive surrender, by submission of an attestation of ownership in the form approved by the Company and with such signatures or other guarantees as may be required by the Company. The Company may also permit the Participant to pay for such Option Shares by directing the Company to withhold shares of Common Stock that would otherwise be received by the Participant, pursuant to such rules as the Committee may establish from time to time. In the discretion of the Committee, and in accordance with rules and procedures established by the Committee (or by any person to whom authority to establish such rules and procedures shall have been delegated by the Committee), the Participant may be permitted to make a "cashless" exercise of all or a portion of the Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Exercise Following Termination of Employment During the Performance Period</u>. If the Participant's employment with the Company terminates in accordance with Section 4(b) or Section 4(d), the Participant (or, in the case of a termination due to death or Disability, Participant's estate, personal representative or beneficiary, as the case may be) shall have the right, subject to the terms and conditions hereof and of the Incentive Plan, to exercise the Option within the twelve (12) month period following the Performance Period, to the extent the Option has vested. If the Participant's employment with the Company terminates in accordance with Section 4(c), the Option will be exercised and settled immediately upon such termination to the extent the Option has vested.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Exercise Following Termination of Employment Following the Performance Period</u>. If the Participant's employment with the Company terminates following the Performance Period, the Participant (or, in the case of a termination due to death or Disability, Participant's estate, personal representative or beneficiary, as the case may be) shall have the right, subject to the terms and conditions hereof and of the Incentive Plan, to exercise the Option within the twelve (12) month period following the termination, to the extent the Option has vested, subject to the earlier expiration of the Option as provided in Section 3(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Withholding</u>. The Award and settlement thereof are subject to withholding of all applicable taxes. The Company shall have the right to deduct from payments of any kind otherwise due to a Participant any federal, state, or local taxes of any kind required by applicable law to be withheld with respect to the vesting of or other lapse of restrictions applicable to the Award or upon the issuance of any shares of Common Stock or payment of any kind upon the exercise of the Award. Such withholding obligations may also be satisfied through withholding shares of Common Stock otherwise issuable to the Participant. The shares of Common Stock so withheld shall have an aggregate Fair Market Value equal to such withholding obligation. The Fair Market Value of the shares of Common Stock used to satisfy such withholding obligation shall be determined by the Company as of the date on which the amount of tax to be withheld is to be determined. The maximum number of shares of Common Stock that may be withheld from the Award to satisfy any federal, state, or local tax withholding requirements upon the exercise, vesting, or lapse of restrictions applicable to the Award or payment of shares of Common Stock pursuant to the Award, as applicable, may not exceed such number of shares of Stock having a Fair Market Value equal to the minimum statutory amount required by the Company to be withheld and paid to any such federal, state, or local taxing authority with respect to such exercise, vesting, lapse of restrictions, or payment of shares of Common Stock; provided, however, as long as Accounting Standards Update 2016-09 or a similar rule is otherwise in effect, the Committee has full discretion to choose, or to allow a Participant to elect, to withhold a number of shares of Common Stock having an aggregate Fair Market Value that is greater than the applicable minimum required statutory withholding obligation (but such withholding may in no event be in excess of the maximum statutory withholding amount(s) in a Participant's relevant tax jurisdictions). If the Committee allows, the Participant may also (i) pay in cash to the Company any amount that the Company may reasonably determine to be necessary to satisfy such withholding obligation, or (ii) elect to satisfy such withholding obligation, in whole or in part, by delivering to the Company shares of Common Stock already owned by the Participant that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements. The shares of Common Stock so delivered shall have an aggregate Fair Market Value equal to such withholding obligation. The Fair Market Value of the shares of Common Stock used to satisfy such withholding obligation shall be determined by the Company as of the date on which the amount of tax to be withheld is to be determined.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Holding Period</u>. As to any shares of Common Stock acquired by the Participant upon the exercise of the vested portion of the Option, the Participant will not sell, pledge, assign, hypothecate, transfer or otherwise dispose of such shares prior to the date that is one (1) year after the date the Participant receives such Option Shares provided, however, that the restrictions set forth in this Section 7 shall (a) not apply to any shares withheld or reacquired by the Company to satisfy exercise price or tax withholding obligations associated with the Option, (b) not apply to any shares sold by the Participant to satisfy any exercise price or tax liability arising in connection with the Option, or (c) not apply following

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the date the Participant's employment with the Company is terminated without Cause or the Participant terminates his employment with the Company for Good Reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Transferability</u>. The Award is not transferable except as designated by the Participant by will or by the laws of descent and distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Heirs and Successors</u>. If any benefits deliverable to the Participant under this Agreement have not been delivered at the time of the Participant's death, such rights shall be delivered to the Participant's estate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.<u>Administration</u>. The authority to administer and interpret this Agreement shall be vested in the Committee, and the Committee shall have all the powers with respect to this Agreement as it has with respect to the Incentive Plan. Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding on all persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.<u>Clawback</u>. The Option shall be subject to mandatory repayment by the Participant to the Company (a) as provided in the Employment Agreement and (b) to the extent the Participant is, or in the future becomes, subject to (i) any Company clawback, recoupment or similar policy that is applicable to all senior executives of the Company, or (ii) any law, rule, requirement or regulation which imposes mandatory recoupment, under circumstances set forth in such law, rule, requirement or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Notices</u>. Any notice required or permitted under this Agreement shall be deemed given when delivered personally, through Ambac's stock compensation administration system or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to Ambac at its principal offices, to the Participant at the Participant's address as last known by the Company or, in either case, such other address as one party may designate in writing to the other.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.<u>Governing Law</u>. The validity, construction and effect of this Agreement shall be determined in accordance with the laws of the State of New York and applicable federal law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.<u>Amendments</u>. The Board of Directors may, at any time, amend or terminate the Incentive Plan, and the Board of Directors or the Committee may amend this Agreement, provided that no amendment or termination may, in the absence of written consent to the change by the Participant (or, if the Participant is not then living, the Participant's beneficiary), adversely affect the rights that the Participant or beneficiary has under this Agreement prior to the date such amendment or termination is adopted by the Board of Directors or the Committee, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.<u>Award Not Contract of Employment</u>. The Award does not constitute a contract of employment or continued service, and the grant of the Award will not give the Participant the right to be retained in the employ or service of the Company, nor any right or claim to any benefit under the Incentive Plan, or this Agreement, unless such right or claim has specifically accrued under the terms of the Incentive Plan and this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.<u>Severability</u>. If a provision of this Agreement is held invalid by a court of competent jurisdiction, the remaining provisions will nonetheless be enforceable according to their terms. Further, if any provision is held to be overbroad as written, that provision shall be amended to narrow its application to the extent necessary to make the provision enforceable according to applicable law and enforced as amended.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.<u>Incentive Plan Governs</u>. The Award evidenced by this Agreement is granted pursuant to the Incentive Plan, and the Option and this Agreement are in all respects governed by the Incentive Plan and subject to all of the terms and provisions thereof, whether such terms and provisions are incorporated in this Agreement by reference or are expressly cited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.<u>Special Section 409A Rules</u>. To the fullest extent possible, amounts and other benefits payable under the Agreement are intended to comply with or be exempt from the provisions of section 409A of the Code. This Agreement will be interpreted and administered to the extent possible in a manner consistent with the foregoing statement of intent; provided, however, that the Company does not guarantee the tax treatment of the Award. Notwithstanding any other provision of this Agreement to the contrary, if any payment or benefit hereunder is subject to section 409A of the Code, and if such payment or benefit is to be paid or provided on account of the Participant's termination of employment (or other separation from service):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)and if the Participant is a specified employee (within the meaning of section 409A(a)(2)(B) of the Code) and if any such payment or benefit is required to be made or provided prior to the first day of the seventh month following the Participant's separation from service or termination of employment, such payment or benefit shall be delayed until the first day of the seventh month following the Participant's separation from service; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)the determination as to whether the Participant has had a termination of employment (or separation from service) shall be made in accordance with the provisions of section 409A of the Code and the guidance issued thereunder without application of any alternative levels of reductions of bona fide services permitted thereunder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)**ANNEX A**

This Annex further describes the Option granted pursuant to the Ambac Financial Group, Inc. Performance Stock Option Agreement and, in addition to the terms and conditions of the Incentive Plan and the Award, constitute the Agreement. Capitalized terms used in this Annex which are not otherwise defined herein shall have the meaning specified in the Agreement, the Incentive Plan or the Employment Agreement.

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| | |
|:---|:---|
| **Participant:** | [[FIRSTNAME]] [[LASTNAME]] |
| **Grant Date:** | [[GRANTDATE]] |
| **Exercise Price:** | [[FMV OF AMBAC CLOSING STOCK PRICE ON GRANT DATE]] |
| **Number of Options** | [[OPTIONSGRANTED]] |
| **Tranche 1:** | Option to purchase [[TRANCH1OPTIONS]] shares of Common Stock |
| **Tranche 2:** | Option to purchase [[TRANCH2OPTIONS]] shares of Common Stock |
| **Tranche 3:** | Option to purchase [[TRANCH3OPTIONS]] shares of Common Stock |
| **Tranche 4:** | Option to purchase [[TRANCH4OPTIONS]] shares of Common Stock |
| **Expiration Date:** | [[EXPIRATIONDATE]] |

---

1. Except as otherwise permitted by the Award, subject to the Participant's continued employment or service with the Company through the one (1) year anniversary of the Grant Date (the "Service Goal"), the Option shall be eligible to vest based on the Company's achievement of the certain price hurdles related to the shares of Common Stock as identified below (the "Performance Hurdles"), during the five (5) year period following the Grant Date (the "Performance Period").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Tranche 1 shall vest on the date on which the Sustained Stock Price first exceeds $18.00 (the "First Stock Price Hurdle") during the Performance Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.Tranche 2 shall vest on the date on which the Sustained Stock Price first exceeds $21.50 (the "Second Stock Price Hurdle") during the Performance Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.Tranche 3 shall vest on the date on which the Sustained Stock Price first exceeds $25.00 (the "Third Stock Price Hurdle") during the Performance Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.Tranche 4 shall vest on the date on which the Sustained Stock Price first exceeds $30.00 (the "Fourth Stock Price Hurdle" together with the First Stock Price Hurdle, Second Stock Price Hurdle and Third Stock Price Hurdle, the "Stock Price Hurdles" and each a "Stock Price Hurdle") during the Performance Period.

2. Any Tranche for which the applicable Stock Price Hurdle has not been achieved on or prior to the last day of the Performance Period will immediately and automatically be cancelled and forfeited without consideration therefor.

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3. Notwithstanding the above, upon the Participant's termination of employment or service as described in Section 4(c) of the Agreement, achievement of the Stock Price Hurdles will be determined utilizing the Change in Control Price instead of the applicable Sustained Stock Price.

As used in this Annex A:

"Change in Control Price" means the greater of (i) the amount of cash and the fair market value of any securities or other property paid as consideration, on a per share basis, to the Company's stockholders (and if less than all of the Company's stockholders' shares of Common Stock are impacted by such Change in Control, then the consideration paid, on a per share basis, to the Company stockholders who receive consideration) in a Change in Control (or to be paid as consideration to the Company in a Change in Control instead of to Company stockholders, for example in a Change in Control pursuant to the sale of Company assets, measured on a per share basis had such amounts been paid to the Company's stockholders), or (ii) the average of the closing market prices of a Share on the New York Stock Exchange for the twenty (20) consecutive trading day-period ending on the last trading day prior to the closing of the Change in Control. For purposes of clause (i) of the preceding sentence, publicly traded securities that are readily tradeable ("Marketable Securities") shall be valued at fair market value as of the closing date of the Change in Control. If any such consideration consists in whole or in part of non-cash consideration other than Marketable Securities, the Committee will determine the value of the non-cash per-share consideration for purposes of the Award in its reasonable good faith discretion.

"Sustained Stock Price" means the thirty (30) day volume-weighted average price of the opening market prices of a share of Common Stock on the New York Stock Exchange for any sixty (60) consecutive trading day-period commencing during the applicable Performance Period and ending on or prior to the final day of the applicable Performance Period. For purposes of the foregoing, if there is no trading in Common Stock on a trading day during any sixty (60) consecutive trading day period, the per-share opening price of Common Stock on such date shall be deemed to be the per-share opening price of Common Stock on the most recent date prior to such trading date on which trading in Common Stock occurred. If Common Stock is not available for trading on an established stock exchange or a national market system on any trading day, the term "opening price" for such trading day shall be deemed to be the Fair Market Value of a share of Common Stock on such date, as determined in accordance with the Incentive Plan, as applicable.

"trading day" means a day on which the primary stock exchange or national market system on which the shares of Common Stock trade, is open for trading.

## Exhibit 10.6

**Exhibit 10.6**

**AMBAC FINANCIAL GROUP, INC.** 

**AMENDMENT NO. 1 TO<br>2024 INCENTIVE COMPENSATION PLAN** 

This Amendment No. 1 (this "Amendment"), dated as of September 26, 2025, to the Ambac Financial Group, Inc. 2024 Incentive Compensation Plan ("Plan") is adopted by the Board of Directors of Ambac Financial Group, Inc., a Delaware corporation (the "Company"). All terms in this Amendment shall have the same meanings as set forth in the Plan unless otherwise specifically defined.

R E C I T A L S

**WHEREAS**, the Company wishes to amend the Plan to remove certain annual award limits, but retain and not increase the Share Limit currently provided under the Plan;

**NOW, THEREFORE**, the Plan is hereby amended as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ***Authority to Amend.*** Under Section 18 of the Plan, the Board of Directors may, at any time, amend the Plan provided that, among other things, no amendment may be made without approval of stockholders if such approval is required by law or the rules of any stock exchange on which the Common Stock is listed. This Amendment does not require stockholder approval under the terms of the Plan, the rules of the New York Stock Exchange or otherwise under law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;***Amendment to Section 3(b).*** Section 3(b) of the Plan is hereby amended to delete the text in each of Sections 3(b)(i), 3(b)(ii) and 3(b)(iii) and replace each with the following: "[Reserved]".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;***Relationship to and Effect on the Plan*.** Except as expressly amended hereby, in all other respects, the terms and conditions of the Plan shall remain in full force and effect and are hereby ratified and confirmed.