Document:

Form of Stock Option Award.

 Exhibit 10.06 
 Ambac 1997 Equity Plan 
 2008 NOTICE OF 2007 STOCK OPTION AWARD 
 Table of Contents 
  

					
	1.	  	Incorporation of Plan Terms	  	2
			
	2.	  	Grant of Option	  	2
			
	3.	  	Terms and Conditions of the Option	  	2
			
	4.	  	Termination of Employment	  	4
			
	5.	  	Transfer; Option Exercisable Only by Participant and Permitted Transferees	  	6
			
	6.	  	Tax Withholding	  	7
			
	7.	  	No Restriction on Right to Effect Corporate Changes; No Right to Employment	  	7
			
	8.	  	Adjustment of and Changes in Shares	  	7
			
	9.	  	Change in Control	  	7
			
	10.	  	Preemption of Applicable Laws and Regulations	  	8
			
	11.	  	Committee Decisions Final	  	9
			
	12.	  	Amendments	  	9
			
	13.	  	Notice Requirements	  	9
			
	14.	  	Governing Law	  	9
			
	15.	  	Entire Agreement; Headings	  	9
		
	Annex A: Stock Option Award and Vesting Schedule	  	

 Ambac 1997 Equity Plan 
 2004 Stock Option Award Agreement 
 Page 2 of 9 
 Ambac 1997 Equity Plan 
 2008 NOTICE OF 2007 STOCK OPTION AWARD 
 Ambac Financial Group, Inc., a Delaware corporation (the “Company”), has adopted the Ambac 1997 Equity Plan, as amended (the
“Plan”), for the purposes of providing an incentive to selected employees of the Company and its affiliates to remain in its employ and to increase their interest in the success of the Company by providing them with
opportunities to increase their proprietary interest in the Company and to receive compensation based upon the Company’s success. 
 This 2007 Notice of 2006 Stock Option Award (the “Award Agreement”) sets forth the terms and conditions of the stock options granted pursuant to the Plan. Annex A of this Award Agreement (“Annex
A”) names the individual to whom the option is granted (the “Participant”) and sets forth the number of shares of common stock of the Company (“Common Stock”) subject to the option, the
exercise price of such option, the date of grant and the expiration date of such option and the vesting schedule applicable thereto. 
  

	 	1.	Incorporation of Plan Terms. 

 This Award Agreement
and the option granted hereby shall be subject to the Plan, the terms of which are incorporated herein by reference, and in the event of any conflict or inconsistency between the Plan and this Award Agreement, the Plan shall govern. Capitalized
terms used herein without definition shall have the meanings assigned to them in the Plan, a copy of which has been furnished to the Participant. 
  

	 	2.	Grant of Option. 

 Subject to the conditions
contained herein and in the Plan, the Company grants to the Participant, as of the date of grant indicated on Annex A (the “Date of Grant”), an option (the “Option”) to purchase the number of shares of
Common Stock specified on Annex A, 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. 
  

	 	3.	Terms and Conditions of the Option. 

 The Option is
granted subject to the following terms and conditions: 
 (a) Vesting; Exercisability. 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. 
 (b) Term of the Option. The Option shall terminate and no longer be exercisable on the earlier of (i) the seventh anniversary of the Date of Grant or (ii) the date specified for termination of the
Option in Sections 4(a), 4(b) and 4(c) below; provided, however, if the termination date falls on a date which the Participant is prohibited by Corporation policy in effect on such date, from engaging in transactions in the Corporation’s
securities, such termination date shall be extended to the first date that the Participant is permitted to engage in transactions in the Corporation’s securities under such Corporation policy. 
  

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 (c) Notice of Exercise. Subject to Sections 3(d), 3(f) and 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, provided, however, that no less than 10 Option Shares may be purchased upon any exercise of the Option unless the
number of Option Shares purchased at such time is the total number of Option Shares in respect of which the Option is then exercisable, and provided, further, that in no event shall the Option be exercisable for a fractional share. 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 Sections 3(d) and 3(f) are satisfied. Notwithstanding any
other provision of this Award 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. 
 (d)
Payment. Prior to the issuance of a certificate pursuant to Section 3(g) hereof evidencing 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 U.S. 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. 
 (e) Stockholder Rights. 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. 
 (f) Limitation on Exercise. The Option shall not be exercisable unless the offer and sale of Common Stock pursuant thereto has been registered
under the Securities Act of 1933, as amended (the “1933 Act”), and qualified under applicable state “blue sky” laws or the Company has determined that an exemption from registration under the 1933 Act
and from qualification under such state “blue sky” laws is available. 
 (g) Issuance of Shares. Subject to the foregoing
conditions, as soon as is reasonably practicable after its receipt of a proper notice of exercise and payment of the Exercise Price for the number of shares with respect to which the Option is exercised, the Company either (i) shall deliver or
cause to be delivered to the Participant (or to such person to whom the Option has been transferred pursuant to Section 5 hereof; or following the Participant’s death, to such other person entitled to exercise the Option), at the
principal office of the Company or at such other location as may be acceptable to the Company and the Participant (or such other person), one or more stock certificates in the name of the Participant (or of the person or persons to whom
such option was transferred by will or the laws of descent and distribution or pursuant to a Qualified Domestic Relations Order) for the appropriate number of shares of Common Stock issued in connection with such exercise or (ii) shall
transfer the appropriate number of shares of Common Stock issued in connection with such exercise to the brokerage account designated by the Participant to the Company in writing prior to exercise. Such shares shall be fully paid and nonassessable.

 (h) Non-qualified Status of the Option. 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”). 
  

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 (i) Cancellation. Notwithstanding any other provision of this Award Agreement, the Committee may
cancel all or any unexercised portion of the Option, whether or not vested, if at any time the Participant initiates or becomes a party to any lawsuit or other legal action in any federal or state court in which the Participant seeks damages or
injunctive or other equitable relief from or against the Company, any of its Subsidiaries or any of its officers, employees or directors in connection with any claim arising from or relating to the Participant’s employment with the Company or
any of its Subsidiaries or the termination of such employment (and regardless of whether any such termination is the result of the Participant’s voluntary resignation or retirement or of the involuntary termination of the Participant’s
employment by the Company or one of its subsidiaries). This Section 3(i) is not intended as a waiver by the Participant of any claims the Participant may have against the Company, any of its subsidiaries or any of its officers, employees or
directors. Instead, it provides for the consequences specified in the second preceding sentence in the event the Participant engages in the conduct described therein. 
 (j) Acceptance of Award Terms. Notwithstanding any other provision of this Award Agreement, the Participant shall have no further rights in the Option represented by this Award Agreement, and this Award
Agreement and the Option represented thereby shall automatically be cancelled, unless the Participant accepts the terms and conditions of the grant by signing this Award Agreement in the space provided for below and returning a signed copy of this
award agreement to the Company’s Human Resources Department, or by electronically acknowledging receipt and acceptance of the terms of this Award Certificate in the manner indicated to the Participant by the Company, in either case no more than
[            ] business days after the Date of Grant. 
 (k) Notice
Period. By the Participant’s acceptance of the Option and the terms of this Award Agreement in the manner provided for in Section 3(j), the Participant agrees to provide the Company or the Subsidiary that employs the Participant with
at least three months advance written notice (the “Minimum Notice”) prior to termination of employment. Notwithstanding any other provision of this Award Agreement, the Committee may cancel all or any unexercised portion of
the Option, whether or not vested, if the Participant resigns his or her employment with the Company and its Subsidiaries without having provided the Company or the Subsidiary that employs the Participant with the Minimum Notice. During the period
covered by the Minimum Notice (the “Notice Period”), the Participant (i) shall remain employed by the Company and its Subsidiaries and receive base salary and certain benefits, but will not accrue any rights to a bonus, and
(ii) shall not commence employment with any other employer or directly or indirectly induce or solicit any client of the Company or any of its subsidiaries to terminate or modify its relationship with any of them. 
  

	 	4.	Termination of Employment. 

 (a) General.
Subject to Section 4(c) hereof, if the Participant’s employment with the Company and its Subsidiaries terminates for any reason other than death or Permanent Disability (as defined herein) prior to the satisfaction of any vesting
period requirement under Section 3(a) hereof, the unvested portion of the Option shall be forfeited to the Company, and the Participant shall have no further right or interest therein, unless the Committee in its sole discretion shall determine
otherwise, provided, however, that in the case of a termination of employment mutually agreed to by the Participant and the Company (or the relevant employer Subsidiary), but not in the case of a termination for Cause (as
defined herein), if the Participant (A) signs a waiver and a release, in the form requested by the Company, irrevocably waiving any and all claims and liabilities relating to the Participant’s employment with the Company and its
affiliates and the termination thereof, (B) signs a noncompetition agreement in the form requested by the Company, and (C) takes any further action requested by the Company to perfect such release and waiver, then at the Company’s
discretion, the Option shall be deemed to have vested in full as of the date of the Participant’s termination of employment. 
 (b)
Exercise Following Termination of Employment. If the Participant’s employment with the Company and its Subsidiaries terminates for any reason other than death, Permanent Disability or Retirement (as defined herein) after the
Option has vested in accordance with Sections 3(a) and 4(a) hereof with respect to all or a portion of the shares of Common Stock subject to the Option, the Participant shall have the right, subject to the terms and conditions hereof and of the
Plan, to exercise the Option, to the extent it has vested as of the date of such termination of employment, at any time within one year after the date of such termination, subject to the earlier expiration of the Option as provided in
Section 3(b). 
  

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 (c) Exercise Following Termination of Employment Due to Death, Permanent Disability or Retirement.

 (i) If the Participant’s employment with the Company and its Subsidiaries terminates due to (A) death or
(B) Permanent Disability or (C) Retirement at age 55 or older after at least five years of continuous service with the Company and its Subsidiaries (including service with a corporation or other entity acquired by the Company), in
any such case prior to the satisfaction of any vesting period requirement under Section 3(a) hereof, the Option shall be deemed to have vested in full as of the date of death, termination due to Permanent Disability or such Retirement.

 (ii) Following termination of employment due to death or Permanent Disability, the Option may be exercised by the
Participant, or the Participant’s Permitted Transferee, estate, personal representative or beneficiary, as the case may be, within three years after the date of death or termination of employment due to Permanent Disability, subject to the
earlier expiration of the Option as provided in Section 3(b). In the event of Retirement (whether or not Retirement results in full vesting of the Option pursuant to clause (i) above), the Participant or the Participant’s Permitted
Transferee may exercise the Option, to the extent it has vested as of the date of Retirement, within three years after the date of Retirement, subject to the earlier expiration of the Option as provided in Section 3(b). 
 (d) Definitions. For purposes hereof, the following terms shall have the meanings specified below: 
 (i) Termination of Employment. The employment of the Participant shall be deemed terminated if the Participant is no longer
employed by the Company or any of its Subsidiaries for any reason. The Committee shall have discretion to determine whether military or government service or an authorized leave of absence (as a result of disability or otherwise) shall
constitute a termination of employment for purposes hereof. 
 (ii) Cause. Each of the following shall constitute
“Cause” for termination of employment: 
 (a) the willful commission by the Participant of acts that are dishonest
and demonstrably and materially injurious to the Company or any of its Subsidiaries or affiliates, monetarily or otherwise; 
 (b) the
conviction of the Participant for a felonious act resulting in material harm to the financial condition or business reputation of the Company or any of its Subsidiaries or affiliates; or 
 (c) except for actions taken in the course of the Participant’s employment or as required by law, the Participant’s divulgation, furnishing or
making accessible to any person any information of a confidential or proprietary nature obtained while in the employ of the Company or any of its Subsidiaries of affiliates, or the Participant’s failure, upon termination of his employment with
the Company or any of its Subsidiaries or affiliates, to return to the Company all such information which exists in written or any other form (including without limitation in the form of computer files or disks) and all copies thereof in his
possession or under his control. 
 Notwithstanding the foregoing, if the Company or any of its Subsidiaries or affiliates has entered or enters into any
employment, management retention, change in control, severance or similar agreement with the Participant, which agreement sets forth a definition of “Cause”, then such definition, rather than the definition set forth above,
shall control for purposes of this Award Agreement. 
 (iii) Permanent Disability. “Permanent
Disability” shall mean circumstances that entitle the Participant to receive benefits under the long-term disability policy maintained by the Company or any of its Subsidiaries for the Participant. 
 (iv) Retirement. “Retirement” shall mean the termination of the Participant’s employment on or after
age 55 and at least 5 years of service, except for Cause; provided , however, that the termination of the Participant’s employment will not be considered a Retirement if the Participant fails to provide the Company or the Subsidiary that
employs the Participant with the written notice required by Section 3(j) hereof or fails to comply with the Participant’s obligations during the Notice Period as set forth in Section 3(j) hereof. 
  

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 (e) Exercise Following Termination of Employment Subject to Company Policies on Insider Trading.
Any exercise of the Option pursuant to Section 4(b) or 4(c) above following termination of the Participant’s employment for any reason other than death shall be subject to, and shall be permitted only to the extent such exercise complies
with, the policies of the Company concerning insider trading. 
 (f) Cancellation of Option and Repayment of Option Gain.
Notwithstanding any other provision of this Award Agreement, the Committee may cancel all or any portion of the Option, whether or not vested, and may require the Participant to repay to the Company all or any portion of the Option Gain (as
defined herein) that the Participant realizes from any full or partial exercise of the Option occurring within six months before or after the termination of the Participant’s employment with the Company and its Subsidiaries, if (A) the
Participant engages in Competitive Activity (as defined herein) within six months following the termination of the Participant’s employment or (B) the Participant fails to provide the Company or the Subsidiary that employs the
Participant with the written notice required by Section 3(j) hereof or fails to comply with the Participant’s obligations during the Period Notice as set forth in Section 3(j) hereof. A Participant will be considered to engage in
“Competitive Activity” if the Participant (1) enters into a relationship as an employee, officer, partner, member, director, independent contractor, consultant, advisor or agent of, or in any similar relationship with,
any corporation, partnership, limited liability company, joint venture or other business entity that engages in any activity which the Committee determines is competitive with a principal business activity of the Company (a
“Competitor”), where the Participant will be responsible for providing services which are similar or substantially related to the services that the Participant provided during any of the last three years of the
Participant’s employment with the Company and its Subsidiaries or (2) either alone, or in concert with others, acquires or maintains beneficial ownership (within the meaning of Section 13(d) of the Exchange Act) of 5% or more of any
class of equity securities of a Competitor. The amount of a Participant’s “Option Gain” realized upon full or partial exercise of an Option is the amount of income included (or to be included) in respect of such
exercise on the Form W-2 (or successor form) that the Company or one of its Subsidiaries issues to the Participant for the year in which such exercise occurs. The Company may require the Participant, in connection with any full or partial
exercise of an Option, to certify in a manner acceptable to the Company that the Participant has not engaged in Competitive Activity and may decline to give effect to such exercise if the Participant fails so to certify. If the Participant is
required to repay any Option Gain to the Company pursuant to this Section 4(f), the Participant shall pay such amount in such manner and on such terms and conditions as the Company may require, and the Company shall be entitled to withhold or
set-off against any other amount owed to the Participant by the Company or any of its Subsidiaries (other than any amount owed to the Participant under any retirement plan intended to be qualified under Section 401(a) of the Code) up to any
amount sufficient to satisfy any unpaid obligation of the Participant under this Section 4(f). 
  

	 	5.	Transfer; Option Exercisable Only by Participant and Permitted Transferees. 

 The Option may not be transferred, pledged, assigned, or otherwise disposed of, except (i) by will or the laws of descent and distribution, (ii) pursuant to a domestic relations order or (iii) for no
consideration, to a member or members of the Participant’s immediate family (as defined below) or to one or more trusts or partnerships established in whole or in part for the benefit of one or more of such immediate family members
(the parties identified in clauses (i), (ii), and (iii) being referred to collectively as “Permitted Transferees”). If the Option is transferred to a Permitted Transferee, it shall be further transferable only by
will or the laws of descent and distribution or, for no consideration, to another Permitted Transferee of the Participant. The Participant shall promptly notify the Company of any proposed transfer to a Permitted Transferee in advance in writing and
shall upon request provide the Company with information concerning the Permitted Transferee’s financial condition and investment experience. No assignment or transfer of the Option, or of the rights represented thereby, whether voluntary or
involuntary, by operation of law or otherwise, except as permitted by this Section 5, shall vest in the assignee or transferee any interest or right in the Option, but immediately upon any attempt to assign or transfer the Option the same shall
terminate and be of no force or effect. For purposes of this Option Agreement, the Participant’s “immediate family” means any child, stepchild, grandchild, spouse, son-in-law or daughter-in-law and shall include adoptive
relationships. 
  

 6 

	 	6.	Tax Withholding. 

 The Company shall have the right,
prior to the issuance of shares as set forth in section 3(g) hereof, to require the Participant to remit to the Company an amount sufficient to satisfy the minimum required Federal, state or local tax withholding requirements. The Company may permit
the Participant to satisfy, in whole or in part, such obligation to remit taxes, 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. The Company shall also have the right to deduct from all cash payments made pursuant to or in connection with the Option the minimum required Federal, state or local taxes required to be withheld with respect to such payments or
such lesser amount as determined by the Company in order to assure that it complies with applicable accounting standards. 
  

	 	7.	No Restriction on Right to Effect Corporate Changes; No Right to Employment. 

 Neither the Plan, this Award Agreement nor the existence of the Option shall affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stocks ahead of or convertible into, or
otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar
character or otherwise. 
 In addition, neither this Award Agreement, the grant of the Option nor any action taken hereunder shall be deemed
to limit or restrict the right of the Company to terminate the Participant’s employment at any time, for any reason, with or without Cause. 
  

	 	8.	Adjustment of and Changes in Shares. 

 In the event
of any merger, consolidation, recapitalization, reclassification, stock split, stock dividend, special cash dividend, split-up, spin-off, or other transaction or change in corporate structure affecting the Common Stock, the Committee shall make
equitable adjustments in order to preserve, but not increase, the benefits or potential benefits intended to be made available to participants granted stock options. Any adjustments shall be determined by the Committee, whose determination
as to what adjustments shall be made, and the extent thereof, shall be final. 
  

	 	9.	Change in Control. 

 (a) Committee Discretion to
Take Certain Actions. The Committee, in its sole discretion, may at any time prior to, coincident with or after the time of a Change in Control (as defined herein): 
 (i) provide for the acceleration of any vesting conditions relating to the exercise of the Option or that the Option may be exercised in
full on or before a date fixed by the Committee; 
 (ii) provide for the purchase of the Option, upon the Participant’s
request, for an amount of cash equal to the amount, as determined by the Committee in its sole discretion, which could have been realized upon the exercise of the Option had the Option been currently exercisable; 
 (iii) make such adjustments to the Option as the Committee deems appropriate to reflect such Change in Control; or 
 (iv) cause the Option then to be assumed, or new rights substituted therefor, by the surviving corporation in such Change in Control.

 Any such actions shall be authorized by the Committee, whose determination as to what actions shall be taken and the extent thereof, shall be final.

  

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 (b) Definitions. For purposes hereof, a “Change in Control” shall be
deemed to occur on the date on which one of the following events occurs: 
 (i) the acquisition by any Person of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the Common Stock then outstanding, but shall not include any such acquisition by: 
 (A) the Company; 
 (B) any Subsidiary of the Company; 
 (C) any employee benefit plan of the Company or of any Subsidiary of the
Company; 
 (D) any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any
such plan; 
 (E) any Person who as of January 31, 1996 was the beneficial owner of 15% or more of the shares of Common
stock outstanding on such date unless and until such Person, together with all affiliates and associates of such Person, becomes the beneficial owner of 25% or more of the shares of Common stock then outstanding whereupon a Change in Control shall
be deemed to have occurred; or 
 (F) any Person who becomes the beneficial owner of 20% or more, or, with respect to a Person
described in clause (E) above, 25% or more, of the shares of Common Stock then outstanding as a result of a reduction in the number of shares of Common Stock outstanding due to the repurchase of shares of Common Stock by the Company unless and
until such Person, after becoming aware that such Person has become the beneficial owner of 20% or more, or 25% or more, as the case may be, of the then outstanding shares of Common Stock, acquires beneficial ownership of additional shares of Common
Stock representing 1% or more of the shares of Common Stock then outstanding, whereupon a Change in Control shall be deemed to have occurred; or 
 (ii) individuals who, as of July 30, 1997, constitute the Board, and subsequently elected members of the Board whose election is approved or recommended by at least a majority of such current members or their
successors whose election was so approved or recommended (other than any subsequently elected members whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board), cease for any reason to constitute at least a majority of such Board; or 
 (iii) approval by the stockholders of the Company of (A) a merger or consolidation of the Company with any other corporation,
(B) the issuance of voting securities of the Company in connection with a merger or consolidation of the Company (or any Subsidiary) pursuant to applicable stock exchange requirements, or (C) sale or disposition of all or
substantially all of the assets of the Company or the acquisition of assets of another corporation (each, a “Business Combination”), unless, in each case, immediately following such Business Combination, all or substantially
all of the individuals and entities who were the beneficial owners of the Common Stock outstanding immediately prior to such Business Combination beneficially own, directly or indirectly, more than 70% of the then outstanding shares of Common Stock
and 70% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Common Stock. 
 As used herein, “Person” means any individual,
firm, corporation, partnership or other entity. 
  

	 	10.	Preemption of Applicable Laws and Regulations. 

 Anything herein to the contrary notwithstanding, if, at any time specified herein for the issuance of shares of Common Stock to the Participant, any law, regulation or requirement of any governmental authority having jurisdiction shall
require either the Company or the Participant to take any action in connection with the shares then to be issued, the issuance of such shares shall be deferred until such action shall have been taken. 
  

 8 

	 	11.	Committee Decisions Final. 

 Any dispute or
disagreement which shall arise under, or as a result of, or pursuant to, or in connection with, this Award Agreement or the Option shall be determined by the Committee, and any such determination or any other determination by the Committee under or
pursuant to this Award Agreement and any interpretation by the Committee of the terms of the Option shall be final and binding on all persons affected thereby. 
  

	 	12.	Amendments. 

 The Committee shall have the power to
alter or amend the terms of the Option as set forth herein from time to time, in any manner consistent with the provisions of Section 16 of the Plan, and any alteration or amendment of the terms of the Option by the Committee shall, upon
adoption, become and be binding on all persons affected thereby without requirement for consent or other action with respect thereto by any such person. The Committee shall give written notice to the Participant of any such alteration or amendment
as promptly as practicable after the adoption thereof. The foregoing shall not restrict the ability of the Participant and the Company by mutual consent to alter or amend the terms of the Option in any manner which is consistent with the Plan and
approved by the Committee. In addition, the terms of the Option may be amended or supplemented by any employment, management retention, severance or similar agreement (an “Employment Agreement”) entered into between the
Company and the Participant (including any such agreement entered into prior to the Date of Grant) and approved, to the extent such Employment Agreement amends or supplements the terms of the Option, by the Committee. 
  

	 	13.	Notice Requirements. 

 Any notice which either party
hereto may be required or permitted to give to the other shall be in writing. Such notice may be delivered to the Company personally or by mail, postage prepaid, addressed as follows: Ambac Financial Group, Inc., One State Street Plaza, New York,
New York 10004, attention: Senior Vice President, Chief Administrative Officer and Employment Counsel, or at such other address as the Company, by notice to the Participant, may designate in writing from time to time, and to the Participant at the
Participant’s address as shown on the records of the Company or at such other address as the Participant, by notice to the Company, may designate in writing from time to time. 
  

	 	14.	Governing Law. 

 The terms and conditions stated
herein are to be governed by, and construed in accordance with, the laws of the State of Delaware. 
  

	 	15.	Entire Agreement; Headings. 

 This Award Agreement
(which includes Annex A) and the other related documents expressly referred to herein (including, if applicable, any Employment Agreement) set forth the entire agreement and understanding between the parties hereto and supersede all
prior agreements and understandings relating to the subject matter hereof. In the event of a discrepancy or inconsistency in the number of shares of common stock covered by the Option, the Date of Grant, the vesting schedule, the Exercise Price or
any other term in this Award Agreement and the resolutions of the Committee authorizing the grant of the Option covered hereby, such resolutions shall control and the Company shall have the right, in its sole discretion, to replace the Award
Agreement or any portion thereof (including any portion of Annex A) with a correct version. The headings of Sections and subsections herein are included solely for convenience of reference and shall not affect the meaning of any of the
provisions of this Award Agreement. 
 AMBAC FINANCIAL GROUP, INC. 
  

 9Amendment Number 1, dated as of January 17, 2008, to the $400,000,000

 Exhibit 10.23 
 EXECUTION COPY 
 AMENDMENT NO. 1 
 AMENDMENT NO. 1 (this “Amendment No. 1”) dated as of January 17, 2008 among AMBAC FINANCIAL GROUP, INC. and AMBAC ASSURANCE
CORPORATION (collectively the “Borrowers” and each a “Borrower”), the Lenders executing this Amendment No. 1 and CITIBANK, N.A., in its capacity as Administrative Agent under the Credit Agreement referred to
below (the “Administrative Agent”). 
 The Borrowers, the Lenders party thereto (including the Lenders executing this
Amendment No. 1) and the Administrative Agent are parties to a First Amended and Restated Revolving Credit Agreement dated as of July 30, 2007 (as amended, supplemented and otherwise modified from time to time and in effect on the date
hereof, the “Credit Agreement”). 
 The Borrowers and the Lenders party hereto wish now to amend the Credit Agreement in
certain respects, and, accordingly, the parties hereto hereby agree as follows: 
 Section 1. Definitions. Except as otherwise
defined in this Amendment No. 1, terms defined in the Credit Agreement are used herein as defined therein. 
 Section 2.
Amendments. Subject to the satisfaction of the conditions precedent specified in Section 4 hereof, but effective as of December 31, 2007, the Credit Agreement shall be amended as follows: 
 2.01. References Generally. References in the Credit Agreement (including references to the Credit Agreement as amended hereby) to “this
Agreement” (and indirect references such as “hereunder”, “hereby”, “herein” and “hereof”) shall be deemed to be references to the Credit Agreement as amended hereby. 
 2.02. Defined Terms. The following definitions shall be (i) amended to read in their entirety as follows (to the extent already included in
Section 1.01 of the Credit Agreement) or (ii) added in the appropriate alphabetical location (to the extent not already included in said Section 1.01): 
 “Impairment Value” means, with respect to any net mark-to-market losses on credit derivative contracts excluded from
stockholder’s equity in the definition of “Total Capital” or from the calculation of minimum net assets in Section 5.03(a), the cumulative amount of such losses incurred from the impairment of the obligations underlying such
credit derivative contracts, as (i) reasonably determined by Ambac Financial in good faith and in a manner consistent with the calculation thereof set forth in the quarterly operating supplements of Ambac Financial produced and released
alongside the quarterly and annual financial statements of Ambac Financial furnished pursuant to Sections 5.01(f)(i) and 5.01(f)(ii) and (ii) set forth in the Compliance Certificate delivered pursuant to Section 5.01(f)(vi). 
 “Total Capital” means, at any time, the sum of (a) the stockholders’ equity of Ambac Financial and its
Subsidiaries (other than Aleutian and Juneau), on a Consolidated basis (excluding (i) unrealized gains on investments and unrealized losses on investments and (ii) net mark-to-market (losses) gains on credit derivative contracts
(determined on an after-tax basis), provided that in the case of this clause (ii) the Impairment Value with respect to such losses shall not be excluded), computed as of the end of the most recently completed fiscal quarter of Ambac

  

 AMENDMENT No. 1 

 
Financial (or, if such time is on the final day of any fiscal quarter of Ambac Financial, as of such day) plus (b) Total Debt as of such time
plus (c) the aggregate Hybrid Securities Amounts as of such time (excluding that portion, if any, of such aggregate Hybrid Securities Amounts that exceeds 15% of Total Capital before giving effect to such exclusion, computed as of the
end of the most recently completed fiscal quarter of Ambac Financial (or, if such time is on the final day of any fiscal quarter of Ambac Financial, as of such day)). 
 2.03. Minimum Net Assets. Section 5.03(a) of the Credit Agreement is hereby amended to read in its entirety as follows: 
 “(a) Minimum Net Assets. Maintain at all times an excess of Consolidated total assets over Consolidated total liabilities (in
each case excluding (x) the assets and liabilities of Aleutian and Juneau and of Persons which are Consolidated or subject to be Consolidated according to FASB Interpretation 46(R) (Consolidation of Variable Interest Entities) and (y) net
mark-to-market (losses) gains on credit derivative contracts (determined on an after-tax basis), provided that in the case of this clause (y) the Impairment Value with respect to such losses shall not be excluded) of at least
$4,375,000,000 plus (i) an amount equal to 25% of Consolidated net income (if positive) for each fiscal year of Ambac Financial commencing with fiscal year 2008 (excluding net mark-to-market (losses) gains on credit derivative contracts
(determined on an after-tax basis), provided that the Impairment Value with respect to such losses shall not be excluded) plus (ii) an amount equal to 50% of the Net Proceeds of any Equity Issuance made during fiscal year 2008 of
Ambac Financial plus (iii) an amount equal to 25% of the Net Proceeds of any Equity Issuance made during each fiscal year of Ambac Financial commencing with fiscal year 2009.” 
 2.04. Form of Compliance Certificate. Exhibit D to the Credit Agreement is hereby amended to read in its entirety as set forth in Exhibit D
hereto. 
 Section 3. Representations and Warranties. Each Borrower represents and warrants to the Lenders and the Administrative
Agent, as to itself and each of its Subsidiaries, that (a) the representations and warranties set forth in Article IV of the Credit Agreement (after giving effect to the amendments contemplated herein) are true and complete on the date hereof
as if made on and as of the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, such representation or warranty shall be true and correct as of such specific date), and as if each
reference in said Article IV to “this Agreement” included reference to this Amendment No. 1, and (b) no Default or Event of Default has occurred and is continuing. 
 Section 4. Conditions Precedent. 
 (a) General. The amendments set forth in Section 2 hereof shall become effective, as of the date hereof, upon satisfaction of the following conditions: 
 (i) Execution. The Administrative Agent shall have received counterparts of this Amendment No. 1 executed by the Borrowers,
the Administrative Agent and the Lenders party to the Credit Agreement constituting the Required Lenders. 
 (ii)
Expenses. The Borrowers shall have paid in full the costs, expenses and fees as set forth in Section 8.04(a) of the Credit Agreement. 
  

 AMENDMENT No. 1 
 - 2 - 

 Section 5. Miscellaneous. Except as herein provided, the Credit Agreement shall remain
unchanged and in full force and effect. This Amendment No. 1 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this
Amendment No. 1 by signing any such counterpart. Delivery of a counterpart by electronic transmission shall be effective as delivery of a manually executed counterpart hereof. This Amendment No. 1 shall be governed by, and construed in
accordance with, the law of the State of New York. 
  

 AMENDMENT No. 1 
 - 3 - 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed by their
respective authorized officers as of the day and year first above written. 
  

			
	AMBAC FINANCIAL GROUP, INC.
		
	By	 	/s/ David Trick
		 	Name: David Trick
		 	Title:   Managing Director & Treasurer
	
	AMBAC ASSURANCE CORPORATION
		
	By	 	/s/ David Trick
		 	Name: David Trick
		 	Title:   Managing Director & Treasurer
	
	CITIBANK, N.A., as Administrative Agent
		
	By	 	/s/ Shannon Sweeney
		 	Name: Shannon Sweeney
		 	Title:  Vice President

  

 AMENDMENT NO. 1 

			
	LENDERS
	
	CITIBANK, N.A.
		
	By	 	/s/ Shannon Sweeney
		 	Name: Shannon Sweeney
		 	Title:   Vice President

  

 AMENDMENT NO. 1 

			
	LENDERS
	
	The Bank of New York
		
	By	 	/s/ Richard G. Shaw
		 	Name: Richard G. Shaw
		 	Title:   Vice President

  

 AMENDMENT No. 1 

			
	LENDERS
	
	KEYBANK NATIONAL ASSOCIATION, as Lender
		
	By	 	/s/ Mary K. Young
		 	Name: Mary K. Young
		 	Title:   Senior Vice President

  

 AMENDMENT No. 1 

			
	LENDERS
	
	MERRILL LYNCH BANK USA
		
	By	 	/s/ Derek Befus
		 	Name: Derek Befus
		 	Title:   Vice President

  

 AMENDMENT No. 1 

 EXHIBIT D 
 FORM OF COMPLIANCE CERTIFICATE 
 AMBAC FINANCIAL GROUP, INC.  
 AMBAC ASSURANCE CORPORATION 
 This
certificate is delivered pursuant to clause (vi) of Section 5.01(f) of the First Amended and Restated Revolving Credit Agreement dated as of July 30, 2007 (together with all amendments and other modifications, if
any, from time to time made thereto, the “Credit Agreement”), among AMBAC FINANCIAL GROUP, INC (“Ambac Financial”), AMBAC ASSURANCE CORPORATION (“Ambac Assurance”; together with Ambac
Financial, the “Borrowers”), the various commercial lending institutions as are or may become parties (hereto collectively, the “Lenders”), and CITIBANK, N.A., as administrative agent (the “Administrative
Agent”). Unless otherwise defined herein, terms used herein and in the Attachment 1 hereto have the meanings provided therefor in the Credit Agreement. 
 This Compliance Certificate relates to the ______ Fiscal Quarter, commencing on __________, ____ and ending on __________, ____ (such latter date being the “Computation Date”). Ambac Financial hereby
further certifies, represents and warrants that as of the Computation Date: 
  

	 	(1)	No Default has occurred and is continuing; 

  

	 	(2)	The Leverage Ratio on the Computation Date was          to 1.00, as computed on Attachment 1 hereto. The maximum Leverage Ratio
permitted pursuant to Section 5.03(b) of the Credit Agreement on the Computation Date is 0.30 to 1.00, and accordingly, Section 5.03(b) of the Credit Agreement has [not] been complied with; and 

  

	 	(3)	The excess of Consolidated total assets over Consolidated total liabilities (in each case excluding (x) the assets and liabilities of Aleutian and Juneau and of Persons which
are Consolidated or subject to be Consolidated according to FASB Interpretation 46(R) (Consolidation of Variable Interest Entities) and (y) net mark-to-market (losses) gains on credit derivative contracts (determined on an after-tax basis),
provided that in the case of this clause (y) the Impairment Value with respect to such losses shall not be excluded) is $ _______. The minimum amount by which Consolidated total assets must exceed Consolidated total liabilities as of the
Computation Date pursuant to Section 5.03(a) of the Credit Agreement is $ _________, and accordingly, Section 5.03(a) of the Credit Agreement has [not] been complied with. 

 IN WITNESS WHEREOF, the undersigned has caused this Compliance Certificate to be delivered by its Responsible Officer this ____ day of________, ____.

  

			
	AMBAC FINANCIAL GROUP, INC.
		
	By:	 	 
		 	Name:
		 	Title:

  

 D-l 

 LEVERAGE RATIO 
 As of                      , 20     
 (the “Computation Date”) 
  

					
			
	 (A)
	  	Total Debt of Ambac Financial and its Subsidiaries (other than Aleutian and Juneau) on a Consolidated basis as of the Computation Date	  	
			
		  	 (1)    Borrowed money and all obligations evidenced by bonds, debentures, notes or other similar instruments (excluding
Contingent-Capital Securities, Credit-Linked Notes and that portion of Debt in respect of Hybrid Securities included in Item C).
	  	$                    
			
		  	 (2)    All obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not
drawn, and banker’s acceptances issued for the account of Ambac Financial or its Subsidiaries (other than Aleutian and Juneau) on a Consolidated basis.
	  	$                    
			
		  	 (3)    All obligations as lessees under leases which have been or should be, in accordance with GAAP, recorded as
capitalized lease liabilities.
	  	$                    
			
		  	 (4)    All Contingent Liabilities in respect of any of Items A(l), A(2) and A(3).
	  	$                    
			
		  	 (5)    The sum of Items A(1), A(2), A(3) and A(4).
	  	$                    
			
	 (B)
	  	Stockholders’ Equity: Stockholders’ equity of Ambac Financial and its Subsidiaries (other than Aleutian and Juneau), on a Consolidated basis (excluding (i) unrealized gains on
investments and unrealized losses on investments and (ii) net mark-to-market (losses) gains on credit derivative contracts (determined on an after-tax basis), provided that in the case of this clause (ii) the Impairment Value with respect to
such losses shall not be excluded).	  	
			
	 (C)
	  	Total Capital: the sum of Item A(5) plus Item B plus the aggregate Hybrid Securities Amounts (excluding that portion, if any, of such aggregate Hybrid
Securities Amounts that exceeds 15% of this Item C before giving effect to such exclusion).	  	
			
	 (D)
	  	Leverage Ratio: 	  	
			
		  	The ratio of Item A(5) to Item C	  	             to 1.00

  

 D- 2

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