Document:

Exhibit

Exhibit 4.8

EVOLENT HEALTH, INC.
DESCRIPTION OF THE REGISTRANT’S SECURITIES 
REGISTERED PURSUANT TO SECTION 12 OF THE 
SECURITIES EXCHANGE ACT OF 1934

DESCRIPTION OF COMMON STOCK

As of December 31, 2019, Evolent Health, Inc. (the “Company,” “us,” “we,” or “our”) had one class of securities, our Class A common stock, par value $0.01 per share, registered under Section 12 of the Securities Exchange Act of 1934, as amended. Our common stock is listed on New York Stock Exchange under the symbol “EVH.”
The following summary does not purport to be complete and is subject to and qualified in its entirety by reference to the General Corporation Law of the State of Delaware (the “DGCL”) and our second amended and restated certificate of incorporation and second amended and restated by-laws, as each may be amended from time to time and filed as exhibits to our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.
General
Our second amended and restated certificate of incorporation provides that we may issue up to 750,000,000 shares of Class A common stock, par value $0.01 per share. 
Voting Rights
Except as otherwise provided in our second amended and restated certificate of incorporation or required by law, the holders of Class A common stock are entitled to one vote per share on all matters to be voted upon by the stockholders.
Dividend and Liquidation Rights
Subject to preferences that may be applicable to any outstanding preferred stock, the holders of Class A common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available therefor. 
We currently anticipate that we will retain all of our future earnings for use in the expansion and operation of our business and do not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of all future dividends to holders of our Class A common stock will be at the discretion of our board of directors and will depend on many factors, including our financial condition, earnings, legal requirements and any debt agreements we are then party to, and other factors our board of directors deems relevant.
In the event of liquidation, dissolution or winding up of the Company, the holders of Class A common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding. 
Other Rights
The holders of our Class A common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Class A common stock. The rights, preferences and privileges of holders of our common stock are subject to those of the holders of any shares of our preferred stock we may issue in the future. 
Election and Removal of Directors; Vacancies 
Our board of directors consists of up to 10 directors, excluding any directors elected by holders of any preferred stock pursuant to provisions applicable in the case of defaults and subject to applicable laws and stock exchange regulations. The exact number of directors will be fixed from time to time by resolution of the board. 
In accordance with our certificate of incorporation and by-laws, our board of directors currently consists of 10 members and is divided into three staggered classes of directors, as nearly equal in number as possible. At each annual meeting of our stockholders, our stockholders elect a class of directors for a three-year term to succeed the directors of the same class whose terms are then expiring. As a result, a portion of our board of directors is elected each year. There is no limit on the number of terms a director 

may serve on our board of directors. The division of our board of directors into three classes with staggered three-year terms may have the effect of discouraging, delaying or preventing a transaction involving a change in control. 
In connection with our IPO, we entered into a stockholders agreement which contains provisions related to the composition of our board of directors, the committees of our board of directors and our corporate governance. Under the stockholders agreement, for so long as University of Pittsburgh Medical Center (“UPMC”) owns at least 40% of the shares of common stock held by it following the completion of our IPO, such stockholder will be entitled to nominate two directors to serve on our board of directors. When such stockholder owns less than 40% but at least 5% of the shares of common stock held by it following the completion of our IPO, such stockholder will be entitled to nominate one director. 
Our second amended and restated certificate of incorporation and second amended and restated by-laws provide that directors may be removed only for cause and only upon the affirmative vote of holders of at least 75% of the voting power of all the then outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class. 
In addition, our second amended and restated certificate of incorporation and second amended and restated by-laws provide that any newly-created directorship on the board of directors that results from an increase in the number of directors and any vacancy occurring on the board of directors shall be filled only by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. 
No Cumulative Voting 
The DGCL provides that stockholders are not entitled to the right to cumulate votes in the election of directors unless our certificate of incorporation provides otherwise. Our certificate of incorporation prohibits cumulative voting. 
Limits on Written Consents 
The DGCL permits stockholder action by written consent unless otherwise provided by our certificate of incorporation. Our second amended and restated certificate of incorporation precludes stockholder action by written consent. 
Stockholder Meetings 
Our certificate of incorporation and by-laws provide that special meetings of stockholders may be called only by or at the direction of the board of directors, the chairman of the board of directors or the chief executive officer.
Amendment of Certificate of Incorporation 
The affirmative vote of holders of at least a majority of the voting power of our outstanding shares of stock will generally be required to amend provisions of our certificate of incorporation. However, the affirmative vote of holders of at least 75% of the voting power of our outstanding shares of stock will be required to amend certain provisions of our certificate of incorporation. 
Amendment of By-laws 
Our by-laws may generally be altered, amended or repealed, and new by-laws may be adopted, by the affirmative vote of a majority of directors present at any regular or special meeting of the board of directors called for that purpose or by the affirmative vote of holders of at least 75% of the voting power of our outstanding shares of stock. 
Other Limitations on Stockholder Actions 
Our by-laws also impose some procedural requirements on stockholders who wish to: 
		
	•
	make nominations in the election of directors; 

		
	•
	propose that a director be removed; 

		
	•
	propose any repeal or change in our by-laws; or 

		
	•
	propose any other business to be brought before an annual meeting of stockholders.

Under these procedural requirements, in order to bring a proposal before a meeting of stockholders, a stockholder must deliver timely notice of a proposal pertaining to a proper subject for presentation at the meeting to our corporate secretary along with the following: 

		
	•
	a description of the business or nomination to be brought before the meeting and the reasons for conducting such business at the meeting; 

		
	•
	the stockholder’s name and address; 

		
	•
	any material interest of the stockholder in the proposal; 

		
	•
	the number of shares beneficially owned by the stockholder and evidence of such ownership; and 

		
	•
	the names and addresses of all persons with whom the stockholder is acting in concert and a description of all arrangements and understandings with those persons, and the number of shares such persons beneficially own. 

To be timely, a stockholder must generally deliver notice: 
		
	•
	in connection with an annual meeting of stockholders, not less than 120 nor more than 150 days prior to the month and day corresponding to the date on which the annual meeting of stockholders was held in the immediately preceding year, but in the event that the date of the annual meeting is more than 30 days before or more than 30 days after the anniversary date of the preceding annual meeting of stockholders, a stockholder notice will be timely if received by us not later than the close of business on the 10th day following the day on which we first publicly announce the date of the annual meeting; or

		
	•
	in connection with the election of a director at a special meeting of stockholders, not less than 40 nor more than 60 days prior to the date of the special meeting, but in the event that less than 50 days’ notice or prior public disclosure of the date of the special meeting of the stockholders is given or made to the stockholders, a stockholder notice will be timely if received by us not later than the close of business on the 10th day following the day on which a notice of the date of the special meeting was mailed to the stockholders or the public disclosure of that date was made. 

In order to submit a nomination for our board of directors, a stockholder must also submit any information with respect to the nominee that we would be required to include in a proxy statement, as well as certain other information. If a stockholder fails to follow the required procedures, the stockholder’s proposal or nominee will be ineligible and will not be voted on by our stockholders. 
Corporate Opportunity 
Our certificate of incorporation and the stockholders agreement provide that each of TPG, The Advisory Board and UPMC and their respective affiliates will not have any duty to refrain from (i) engaging, directly or indirectly, in the same or similar business activities or lines of business as us, including those business activities or lines of business deemed to be competing with us, or (ii) doing business with any of our clients, customers or vendors. In the event that TPG, The Advisory Board or UPMC or any of their respective affiliates acquires knowledge of a potential business opportunity which may be a corporate opportunity for us, they will have no duty to communicate or offer such corporate opportunity to us. Our certificate of incorporation and the stockholders agreement also provide that, to the fullest extent permitted by law, none of such stockholders or their respective affiliates will be liable to us, for breach of any fiduciary duty or otherwise, by reason of the fact that any such stockholder or any of its affiliates directs such corporate opportunity to another person, or otherwise does not communicate information regarding such corporate opportunity to us, and we will waive and renounce any claim that such business opportunity constituted a corporate opportunity that should have been presented to us. 
Limitation of Liability of Directors and Officers 
Our certificate of incorporation provides that no director will be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except as required by applicable law, as in effect from time to time. Currently, Delaware law requires that liability be imposed for the following: 
		
	•
	any breach of the director’s duty of loyalty to our company or our stockholders; 

		
	•
	any act or omission not in good faith or which involved intentional misconduct or a knowing violation of law; 

		
	•
	unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL; and 

		
	•
	any transaction from which the director derived an improper personal benefit.

As a result, neither we nor our stockholders have the right, through stockholders’ derivative suits on our behalf, to recover monetary damages against a director for breach of fiduciary duty as a director, including breaches resulting from grossly negligent behavior, except in the situations described above. 
Our by-laws provide that, to the fullest extent permitted by law, we will indemnify any officer or director of our company against all damages, claims and liabilities arising out of the fact that the person is or was our director or officer, or served any other 

enterprise at our request as a director, officer, employee, agent or fiduciary. We will reimburse the expenses, including attorneys’ fees, incurred by a person indemnified by this provision when we receive an undertaking to repay such amounts if it is ultimately determined that the person is not entitled to be indemnified by us. Amending these provisions will not reduce our indemnification obligations relating to actions taken before an amendment.
Forum Selection 
Our certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders and other similar actions, may be brought only in specified courts in the State of Delaware. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers. 
Anti-takeover Effects of Some Provisions 
Some provisions of our certificate of incorporation and by-laws could make the following more difficult: 
		
	•
	acquisition of control of us by means of a proxy contest or otherwise; or 

		
	•
	removal of our incumbent officers and directors. 

These provisions, as well as our ability to issue preferred stock, are designed to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of increased protection give us the potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us, and that the benefits of this increased protection outweigh the disadvantages of discouraging those proposals, because negotiation of those proposals could result in an improvement of their terms. 
Delaware Business Combination Statute 
We have elected in our certificate of incorporation not to be subject to Section 203 of the DGCL, an antitakeover law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporation’s voting stock for a period of three years following the date the person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner. Accordingly, we will not be subject to any anti-takeover effects of Section 203. Nevertheless, our certificate of incorporation contains provisions that have the same effect as Section 203, except that they provide that each of TPG, UPMC and The Advisory Board and their transferees will not be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions. 
Transfer Agent and Registrar 
The transfer agent and registrar for the Class A common stock is American Stock Transfer & Trust Company, LLC.Exhibit

Exhibit 10-21

AMBAC FINANCIAL GROUP, INC.
LONG-TERM INCENTIVE COMPENSATION AGREEMENT
(Executive Officers without Employment Agreements)

Effective as of March 2, 2017 (the “Grant Date”), [[FIRSTNAME]] [[LASTNAME]] (the “Participant”) has been granted an Award under the Ambac Financial Group, Inc. Incentive Compensation Plan (the “Incentive Plan”) and in accordance with the Ambac Financial Group, Inc. Long-Term Incentive Compensation Plan (the “LTIP”) which is a subplan to the Incentive Plan.  This Agreement evidences the Award which shall consist of a Full Value Award in the form of performance stock units (“Performance Stock Units”).  In addition to the terms and conditions of the Incentive Plan and the LTIP, the Award shall be subject to the following terms and conditions (sometimes referred to as this “Agreement”). 

1.Defined Terms.  Capitalized terms used in this Agreement which are not otherwise defined herein shall have the meaning specified in the Incentive Plan or the LTIP, as applicable. 
2.    Grant of Performance Stock Units.  Subject to the terms of this Agreement, the Incentive Plan and the LTIP, effective as of the Grant Date the Participant is hereby granted [[GRANTCOMMENT]] Performance Stock Units (the “Target Performance Units”).  This Award contains the right to dividend equivalent units (“Dividend Equivalent Units”) with respect to Earned Performance Units (as defined in paragraph 3) as described in paragraph 4.  Each Performance Stock Unit awarded hereunder shall become earned and vested as described in paragraph 3 and each Earned Performance Unit (and associated Earned Dividend Equivalent Units thereon as described in paragraph 4) shall be settled in accordance with paragraph 5.
3.    Earning, Vesting and Forfeiture of Performance Stock Units.  The Performance Stock Units shall become earned and vested in accordance with the following: 
		
	(a)
	All Performance Stock Units shall be unearned and unvested unless and until they become earned and vested and nonforfeitable in accordance with this subparagraph 3(a).  The Participant shall have the ability to earn between 0% and 200% of the Target Performance Units, as determined by the Committee, based on the continuing employment of the Participant during the period beginning on January 1, 2017 and ending on the December 31, 2019 (the “Performance Period”) and satisfaction of the Performance Goals set forth in Exhibit A hereto (which is incorporated into and forms part of this Agreement).  Any Performance Stock Units granted pursuant to this Agreement that become earned in accordance with this Agreement shall be referred to herein as “Earned Performance Units”.  Except as provided in subparagraph 3(b), 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 all Performance Stock Units (and any associated Dividend Equivalent Units) awarded or credited to the Participant pursuant to this Agreement shall expire and be forfeited immediately and 

1

the Participant shall have no further rights with respect to any of the Performance Stock Units (or associated Dividend Equivalent Units).  The Earned Performance Units (and any associated Earned Dividend Equivalent Units) shall be settled in accordance with paragraph 5 hereof.
		
	(b)
	Notwithstanding the provisions of subparagraph 3(a), if the Participant’s Termination Date occurs on or after the first anniversary of the beginning of the Performance Period and prior to the last day of the Performance Period by reason of death, Disability (as defined in subparagraph 3(c)), involuntary termination by the Company other than for Cause (as defined in subparagraph 3(c)), or Retirement (as defined in subparagraph 3(c), the Participant (or, in the event of his death, his beneficiary) shall be entitled to that number of Earned Performance Units (and any associated Earned Dividend Equivalent Units thereon) equal to the product of (A) the number of Earned Performance Units (and any associated Earned Dividend Equivalent Units) that the Participant would have been entitled to receive had his Termination Date not occurred prior to the end of the Performance Period based on actual satisfaction of the Performance Goals, multiplied by (B) a fraction (1) the numerator of which is the number of days during the Performance Period prior to and including the Termination Date and (2) the denominator of which is the total number of days in the Performance Period.  

		
	(c)
	For purposes of the Award evidenced by this Agreement, (i) a Participant’s Termination Date  shall be considered to occur by reason of Disability if his Termination Date occurs on or after the date on which he is entitled to long-term disability benefits under the Company’s long-term disability plan (or, if the Participant is not eligible for such plan, if the Participant would be entitled to benefits under such plan if he were eligible) and such Termination Date does not occur for any other reason, (ii) the Participant’s Termination Date shall be considered to occur by reason of Cause if the Participant’s Termination Date occurs by reason of termination by the Company and is on account of (A) any act or omission by the Participant resulting in, or intending to result in, personal gain at the expense of the Company; (B) the improper disclosure by the Participant of proprietary or confidential information of the Company; (C) misconduct by the Participant, including, but not limited to, fraud, intentional violation of, or negligent disregard for, the rules and procedures of the Company (including the code of business conduct), theft, violent acts or threats of violence, or possession of controlled substances on the property of the Company; or (D) poor performance or other reasons under which the Participant terminates not in good standing; provided, however, that the meaning of “Cause” shall be (1) expanded to include any additional grounds for cause-based termination specified in any contract, policy or plan applicable to the Participant or (2) superseded to the extent expressly provided in such contract, policy or plan, and (iii) the Participant’s Termination Date shall be considered to occur on account of Retirement if the Participant’s Termination Date occurs on or after the date on which the Participant has attained age 55 and such termination date does not occur for any other reason.

2

4.    Dividend Equivalent Units.  The Participant shall be credited with Dividend Equivalent Units as follows:
		
	(a)
	If, during the Performance Period, a dividend with respect to shares of Common Stock is paid in cash, then as of the dividend payment date the Participant shall be credited with that number of Dividend Equivalent Units equal to (i) the cash dividend paid with respect to a share of Common Stock, multiplied by (ii) 200% of the Target Performance Units (the “Maximum Performance Units”) plus the number of previously credited Dividend Equivalent Units with respect to such Performance Stock Units, if any, divided by (iii) the Fair Market Value of a share of Common Stock on the dividend payment date, rounded down to the nearest whole number.

		
	(b)
	If, during the Performance Period, a dividend with respect to shares of Common Stock is paid 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 Maximum Performance Units, plus (iii) the number of previously credited Dividend Equivalent Units with respect to such Performance Stock Units, if any, rounded down to the nearest whole number.

Dividend Equivalent Units shall be earned on the same basis and to the same extent that the Performance Stock Units to which they relate become Earned Performance Units.  Therefore, the Participant shall only earn Dividend Equivalent Units with respect to Earned Performance Units and, to the extent that any Dividend Equivalent Units are credited to the Participant pursuant to this paragraph 4 and are not earned in accordance with this Agreement, they shall be forfeited and the Participant shall have no further rights with respect thereto under this Agreement or otherwise.  Any Dividend Equivalent Units credited to the Participant pursuant to this paragraph 4 that become earned in accordance with this Agreement are sometimes referred to as “Earned Dividend Equivalent Units”. 

5.    Settlement.  Subject to the terms and conditions of this Agreement, the Earned Performance Units (and associated Earned Dividend Equivalent Units) shall be settled as soon as practically possible, but not later than seventy-five (75) days following the end of the Performance Period (the “Settlement Date”).  Settlement of the Earned Performance Units and Earned Dividend Equivalent Units on the Settlement Date shall be made in the form of shares of Common Stock with one share of Common Stock being issued in settlement of each Earned Performance Unit and each Earned Dividend Equivalent Unit, with any fractional shares of Common Stock being rounded up to the nearest whole number.  Upon the settlement of any Earned Performance Unit and associated Earned Dividend Equivalent Units, such Earned Performance Unit and Earned Dividend Equivalent Units shall be cancelled.  Any Performance Stock Units and associated Dividend Equivalent Units outstanding as of the last day of the Performance Period that do not become Earned Performance Units and associated Earned Dividend Equivalent Units shall be automatically cancelled as of the last day of the Performance Period.

3

6.    Withholding.  The Award and settlement thereof are subject to withholding of all applicable taxes.  Such withholding obligations shall be satisfied through amounts that the Participant is otherwise to receive upon settlement.
7.    Transferability.  The Award is not transferable except as designated by the Participant by will or by the laws of descent and distribution.
8.    Heirs and Successors.  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. 
9.    Administration.  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 and the LTIP.  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.
10.    Adjustment of Award.  The number of Performance Stock Units (and any associated Dividend Equivalent Units) awarded or credited to the Participant pursuant to this Agreement may be adjusted by the Committee in accordance with the terms of the Incentive Plan to reflect certain corporate transactions which affect the number, type or value of the Performance Stock Units (and associated Dividend Equivalent Units).  
11.    Notices.  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.
12.    Governing Law.  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.
13.    Amendments.  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 or the LTIP, provided that no amendment or termination may, in the absence of written consent to the change by the affected Participant (or, if the Participant is not then living, the affected beneficiary), adversely affect the rights of any Participant or beneficiary 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.  
14.    Award Not Contract of Employment.  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, the LTIP or this Agreement, unless such right or claim has specifically accrued under the terms of the Incentive Plan and this Agreement.  

4

15.    Severability.  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.
16.    Incentive Plan and LTIP Govern.  The Award evidenced by this Agreement is granted pursuant to the Incentive Plan, and the Performance Stock Units and this Agreement are in all respects governed by the Incentive Plan (including the LTIP) 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.
17.    Special Section 409A Rules.  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):
		
	(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 

		
	(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.

5

EXHIBIT A
PERFORMANCE GOALS

Weight of Award between AAC and AFG Performance:

AAC Percentage:  80%
AFG Percentage:  20%

Performance Goals

The Award evidenced by the Agreement shall be earned based on the satisfaction of the Performance Goals described in this Exhibit A determined based on the rating calculated pursuant to the following table:

	
						
	 
	 
	AAC
	AFG

	Rating
	Payout Multiple
	ALR
	Adjusted Net Asset Value
($mm)
	ACC Outstanding ($bn)
	Cumulative EBITDA ($mm)

	1
	2.00
	105.3%
	$312
	$10.50
	$19

	2
	1.50
	102.8%
	$167
	$11.00
	$16

	3
	1.25
	100.3%
	$18
	$11.25
	$13

	4
	1.00
	97.8%
	$(134)
	$11.50
	$6

	5
	0.50
	95.3%
	$(290)
	$12.00
	$3

	6
	0.00
	92.8%
	$(450)
	$17.04
	$0

With respect to the AAC Performance Goal, the applicable rating shall be determined (i) 70% based on the higher of (1) the ALR or (2) the Adjusted Net Asset Value, and (ii) 30% based on the ACC Outstanding during the Performance Period.  Linear interpolation between payout multiples of ALR, Adjusted Net Asset Value and the ACC Outstanding, as applicable, will result in a proportionate number of the Target Performance Units (and associated Dividend Equivalent Units) becoming Earned Performance Units (and Earned Dividend Equivalent Units).

With respect to the AFG Performance Goal, the applicable rating shall be determined based on Cumulative EBITDA.  Linear interpolation between payout multiples of Cumulative EBITDA will result in a proportionate number of the Target Performance Units (and associated Dividend Equivalent Units) becoming Earned Performance Units (and Earned Dividend Equivalent Units).

All determinations as to whether the Performance Goals have been satisfied will be determined by the Committee in accordance with the provisions of the LTIP, including Section 3(f) thereof.  Notwithstanding anything contained herein to the contrary, irrespective of AFG’s Cumulative EBITDA, no Target Performance Units (or associated Dividend Equivalent Units) will become 

Earned Performance Units (and Earned Dividend Equivalent Units) if AAC does not generate a payout multiple greater than zero.

For purposes of the foregoing table, the following definitions shall apply: 

AAC:  Ambac Assurance Corporation.

ACC Outstanding: The net par outstanding for those adversely classified credits so identified by AFG and its subsidiaries, including Ambac Assurance UK, Limited (“Ambac UK”).  For non-U.S. exposures, the currency exchange rates to be used shall be those beginning on the first day of the Performance Period. 

Adjusted Net Asset Value:  The value determined by reducing Assets by Liabilities, determined as of the last day of the Performance Period.

AFG:  Ambac Financial Group, Inc. 

ALR:  The ratio determined by dividing (a) Assets by (b) Liabilities, determined as of the last day of the Performance Period.  For purposes of this ratio, Assets and Liabilities shall be increased for the amount of representation and warranty receipts that were subsequently used to settle Liabilities.

Assets:  The sum of the following relating to the Included Entities: (i) cash, (ii) invested assets, (iii) loans, (iv) investment income due and accrued, (v) net receivables (payables) for security sales (purchases), (vi) all tax tolling payments or dividends made by AAC to AFG during the Performance Period and (vii) cash pledged as collateral to derivative counterparties determined as of the last day of the Performance Period.

Additionally, for commutation and/or settlement payments, assets should include the difference between the payment amount and the prior quarter’s GCL (as defined below) for that policy, if the payment had an adverse impact on the ALR or NAV.  Such difference will only be considered an asset if approved by the Committee.   

Cumulative EBITDA:  AFG’s earnings before interest, taxes, depreciation, amortization, and non-controlling interests (as determined under GAAP) for the Performance Period.  This includes all of AFG’s subsidiaries excluding AAC and AAC’s subsidiaries.

Included Entities:  AAC and its subsidiaries, except for Ambac UK and Ambac UK’s subsidiaries.  Additionally, may include any other entities that the Committee shall determine.

Liabilities:  The sum of the following relating to the Included Entities (unless otherwise specified): (i) the present value of future probability weighted financial guarantee claims and CDS payments reduced by recoveries, including probability weighted estimated subrogation recoveries and reinsurance recoverables, using discount rates in accordance with GAAP (“GCL”), (ii) face value of unpaid claims and accrued interest, (iii) fair value of all interest rate swaps (prior to any AAC credit valuation adjustments), (iv) par value and accrued interest of all outstanding surplus notes 

of AAC (including surplus notes of the Segregated Account of AAC (including junior surplus notes)), (v) the face value of outstanding preferred stock, (vi) GAAP carrying value of RMBS secured borrowings, and any such similar borrowings of AAC, all as determined as of the last day of the Performance Period and (vii) the par and accrued interest of any new obligations created in connection with any recapitalization of AAC.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00305-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00305-of-00352.parquet"}]]