Document:

Amend. No.2 to Open Tools Lic. Agmnt. between Microsoft Corp. and Borland Softwa

 
Exhibit 10.80

 
AMENDMENT NUMBER TWO 
TO OPEN TOOLS LICENSE AGREEMENT 
 
This Amendment Number Two (the “Amendment”) to the Microsoft Open Tools License Agreement dated March 2, 1999, as amended June 2, 1999 (the
“Agreement”) is entered into by and between MICROSOFT CORPORATION (“MS”) and BORLAND SOFTWARE CORPORATION, (“Company”) as of December 11, 2002. 
 
The below signed parties hereby mutually agree that the indicated portion(s) of the Agreement are hereby amended effective
December 11, 2002: 
 

	1.	 	A new Section 1(g) shall be added to the Agreement as follows: 

 

	 	1.1	 	(g) “Publicly Available Software”    “Publicly Available Software” means any software that requires as a
condition of use, modification and/or distribution of such software that such software or other software incorporated into, derived from or distributed with such software (a) be disclosed or distributed in source code form; (b) be licensed for the
purpose of making derivative works; or (c) be redistributable at no charge. 

 

	2.	 	A new Section 2(b) shall be added to the Agreement as follows, and the remainder of Section 2 shall be renumbered accordingly: 

 

	 	    	 	(b) Company’s license rights to the Microsoft Software are conditioned upon Company (a) not distributing such Microsoft Software in conjunction with Potentially
Viral Software (as defined below); and (b) not using Potentially Viral Software (e.g. tools) to develop Company software which includes the Microsoft Software. For purposes of the foregoing, “Potentially Viral Software” means software
which is licensed pursuant to terms that: (x) create, or purport to create, obligations for Microsoft with respect to the Microsoft Software or (y) grant, or purport to grant, to any third party any rights or immunities to under Microsoft’s
intellectual property or proprietary rights in the Microsoft Software. By way of example but not limitation of the foregoing, Company shall not distribute the Microsoft Software in conjunction with any Publicly Available Software. Notwithstanding
any of the foregoing, Company’s distribution of Publicly Available Software in a manner that does not (i) create, or purport to create, obligations for Microsoft or any of its affiliates with respect to the Licensed Software or (ii) grant, or
purport to grant, Company or any third party any rights or immunities under Microsoft’s intellectual property or proprietary rights in the Licensed Software will not be in violation of the foregoing license condition.

 

	3.	 	This Amendment shall amend, modify and supersede, to the extent of any inconsistencies, the provision of the Agreement. Except as expressly affected by this
Amendment, the Agreement shall remain in full force and effect. 

 

	    	 	[REST OF PAGE INTENTIONALLY LEFT BLANK] 

 
 
 
Page 1 
Amendment No. 2 

IN WITNESS THEREOF, the parties have executed this Amendment to the Agreement as of the date set forth
above. All signed copies of this Amendment to the Agreement shall be deemed originals. 
 
 

	 MICROSOFT CORPORATION

	
	 /s/    DAVID
TREADWELL        

	 Name: David Treadwell
 Title: General Manager
 Date: 1/9/03

 
 

	 BORLAND SOFTWARE CORPORATION

	
	 /s/    SIMON
THORNHILL        

	 Name: Simon Thornhill
 Title: V.P. & General Manager
 Date: 1/8/03

 
 
 
Page 2 
Amendment No. 2Deferred Compensation Plan for Outside Directors

 
EXHIBIT 10.07

 
 
 
 
 
 
AMBAC FINANCIAL GROUP, INC. 
 
 
 
 
 
DEFERRED COMPENSATION PLAN 
FOR OUTSIDE DIRECTORS 
 
 
 
 
 
 
 
Effective as of December 1, 1993, 
As Amended through October 15, 2002 
 

AMBAC Financial Group 
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 
 
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AMBAC
FINANCIAL GROUP, INC. 
 
DEFERRED
COMPENSATION PLAN FOR 
OUTSIDE DIRECTORS 
 
 
1.     Definitions

 
“Account” and
“Deferred Compensation Account” are used interchangeably and mean the bookkeeping record established for each Participant. A Deferred Compensation Account is established only for purposes of measuring a Deferred Benefit and not to
segregate assets or to identify assets that may be used to pay a Deferred Benefit. 
 
“Account Value” means the amount reflected on the books and records of the Company as the value of a Participant’s Deferred Compensation Account at any date of determination, as
determined in accordance with this Plan. 
 
“Annual Fees” means the cash portion of (i) any annual fee payable to an Outside Director for service on the Board, (ii) any other fee determined on an annual basis and payable for service on (as distinguished from
attendance at meetings of), or for acting as chairperson of, any committee of the Board and (iii) any similar annual fee payable in respect of service on the board of directors of any Subsidiary or any committee of any such board of directors.

 
“Beneficiary” or
“Beneficiaries” means a person or other entity designated by a Participant on a Beneficiary Designation Form to receive Deferred Benefit payments in the event of the Participant’s death. 
 
“Beneficiary Designation Form” means a
document, in form approved by the Committee, to be used by Participants to name their respective Beneficiaries. 
 
“Board” means the Board of Directors of the Company. 
 
“Cash Deferral Option” means a Performance Option under which the Deferred Amount credited
to a Participant’s Deferred Compensation Account is carried as a cash balance to which interest equivalents are credited from time to time as provided in Section 6(c)(i). 
 
“Committee” means the Compensation and Organization Committee of the Board or any successor
committee thereto. 
 
“Common
Stock” means the Company’s common stock, par value $0.01 per share. 
 
“Conversion Date” has the meaning assigned to such term in Section 6(e). 

AMBAC Financial Group 
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 
 
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“Deemed Capital Gain Tax Charge” has the meaning assigned to such term in Section 6(c). 
 
“Deferral Election” means the election of a Participant, made in accordance with the terms and conditions of the Plan, to
defer all or a portion of his/her Directors Fees for a Deferral Year. 
 
“Deferral Election Form” means a document, in form approved by the Committee, pursuant to which a Participant makes a Deferral Election. 
 
“Deferral Year” means the calendar year, starting with calendar year 1994. If an individual
becomes eligible to participate in the Plan after the commencement of a Deferral Year, the Deferral Year for the individual shall be the remainder of such Deferral Year. 
 
“Deferred Amount” means the amount of Directors Fees, deferred by a Participant pursuant to
a Deferral Election. 
 
“Deferred
Benefit” means the amount that will be paid on a deferred basis under the Plan to a Participant who has made a Deferral Election. A Participant’s Deferred Benefit will equal the Account Value of his or her Deferred Compensation
Account, calculated as provided herein. 
 
“Director Fees” means the aggregate of a Participant’s Annual Fees and Meeting Fees. 
 
“Election Date” means December 31 of the year preceding the beginning of the Deferral Year, provided,
however, that if an individual becomes an Outside Director for the first time during a Deferral Year, that Outside Director’s Election Date for such Deferral Year is any day within thirty days of the date he/she becomes an Outside
Director. 
 
“Exchange Act” means
the Securities Exchange Act of 1934, as amended. 
 
“Fair Market Value” of a share of Common Stock means the average of the highest and the lowest quoted selling price of a share of Common Stock as reported on the composite tape for securities listed on the New York
Stock Exchange, or such other national securities exchange as may be designated by the Committee, or in the event that the Common Stock is not listed for trading on a national securities exchange but is quoted on an automated quotation system, on
such automated quotation system, in any such case on the valuation date (or if there were no sales on the valuation date, the average of the highest and the lowest quoted selling prices as reported on such composite tape or automated quotation
system for the most recent day during which a sale occurred). 
 
“Meeting Fees” means (i) any meeting fee payable in respect of attendance at or participation in meetings of the Board or any committee of the Board or any meeting of the 

AMBAC Financial Group 
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 
 
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stockholders of the
Company and (ii) any similar meeting fee payable in respect of service on the board of directors of any Subsidiary or any committee of any such board of directors. 
 
“Outside Director” means a duly-elected member of the Board who is not an employee of the
Company or any Subsidiary. 
 
“Participant” means an Outside Director who participates in the Plan pursuant to Section 4. 
 
“Performance Option” means the performance options made available from time to time for selection by Participants to
measure the return (positive or negative) to be attributed to Deferred Amounts. 
 
“Phantom Stock Option” means a Performance Option under which a Deferred Amount is credited to a Participant’s Deferred Compensation Account as a number of Phantom Stock Units.

 
“Phantom Stock Unit” means a
bookkeeping unit representing one share of Common Stock. 
 
“Subsidiary” means any corporation 50 percent or more of the voting stock of which is owned directly or indirectly by the Company. 
 
2.     Purpose 
 
The purpose of the Plan is to provide the Company’s Outside Directors an opportunity to defer payment of
all or part of their Directors Fees in accordance with the terms and conditions set forth herein. 
 
3.     Administration 
 
(a) Authority. The Committee will be responsible for administering the Plan. The Committee will have authority to adopt such rules as it may deem appropriate to carry out the purposes of the
Plan, and shall have authority to interpret and construe the provisions of the Plan and any agreements under the Plan and to make determinations pursuant to any Plan provision. Each interpretation, determination or other action made or taken by the
Committee pursuant to the Plan shall be final and binding on all persons. No member of the Committee shall be liable for any action or determination made in good faith, and the members of the Committee shall be entitled to indemnification and
reimbursement in the manner provided in the Company’s Amended and Restated Certificate of Incorporation as it may be amended from time to time. 
 
(b) Delegation. The Committee may designate a committee composed of one or more members of the Board to carry out its
responsibilities under such conditions as it may set. 

AMBAC Financial Group 
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 
 
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4.
    Eligibility 
 
(a)
Directors. Any Outside Director may participate in the Plan. 
 
(b) Becoming a Participant. An Outside Director becomes a Participant for any Deferral Year by filing a Deferral Election Form according to Section 5 of the Plan. 
 
5.     Deferral Elections 
 
(a) General Provisions. A Participant may elect to
defer all or a specified percentage (in multiples of 10 percent) of Directors Fees for a Deferral Year, in the manner provided in this Section 5. A Participant’s Deferred Benefit is at all times nonforfeitable. 
 
(b) Deferral Election Forms. Before the Election Date
applicable to a Deferral Year, each Outside Director will be provided with a Deferral Election Form and a Beneficiary Designation Form. In order for an Outside Director to participate in the Plan for a given Deferral Year, a Deferral Election Form,
completed and signed by him/her, must be delivered to the Secretary of the Board on or prior to the applicable Election Date. An Outside Director electing to participate in the Plan for a given Deferral Year shall indicate on his/her Deferral
Election Form: 
 
(i) the
percentage of Director Fees for the applicable Deferral Year to be deferred; 
 
(ii) the allocation of the Deferred Amount among the several Performance Options then available to Participants, in accordance with the terms and conditions of Section 6(b); and 
 
(iii) the Participant’s election either
to have distribution of his/her Deferred Benefit commence following termination of service as an Outside Director or to have such distribution commence as of a date specified on such Form, provided, however, that any such election
concerning the commencement of distribution of a Participant’s Deferred Benefit shall be subject to the terms and conditions of Section 6(e). 
 
(c) Effect of No Deferral Election. An Outside Director who does not submit a completed and signed Deferral Election Form to the
Secretary of the Board before the relevant Election Date is not a Participant for the Deferral Year and may not defer his/her Directors Fee for the Deferral Year. 
 
(d) Revocation of Deferral Election. 
 
(i) A Participant may revoke a Deferral Election applicable to a Deferral 

AMBAC Financial Group 
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 
 
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Year, but
only pursuant to the procedure described in subsection (ii) below. Any purported revocation that does not comply with subsection (ii) below will not be given effect. 
 
(ii) To be effective, a revocation must be in writing and signed by the Participant, must
express the Participant’s intention to revoke his Deferral Election applicable to that Deferral Year, and must be delivered to the Secretary of the Board before the close of business on the Election Date applicable to such Deferral Year. For
example, to revoke a Deferral Election relating to calendar year 2001, a written revocation of such Deferral Election must be delivered to the Secretary of the Board before the close of business on December 31, 2000. 
 
6.     Deferred Compensation Accounts; Distributions

 
(a) Deferred Compensation Accounts.

 
(i) Establishment of
Accounts. A Participant’s deferrals will be credited to a Deferred Compensation Account set up for that Participant. Each Deferred Compensation Account will be credited with Deferred Amounts, as provided in Section 6(b), and credited (or
charged) with earnings (or loss) as provided in Section 6(c). 
 
(ii) Crediting of Deferred Amounts. 
 
Director Fees. As of the dividend payment date following the last business day of each calendar quarter, an Outside
Director’s Deferred Compensation Account will be credited with (A) 25% of Annual Fees deferred for the Deferral Year in which such quarter occurs and (B) 100% of deferred Meeting Fees earned during such quarter. 
 
(b) Allocations Among Performance Options. A
Participant shall have the right to allocate the Deferred Amount for any Deferral Year, in minimum allocations of at least 10%, among one or more Performance Options made available from time to time under the Plan. The Performance Options generally
available to Participants shall include: 
 
(i) A Cash Deferral Option; 
 
(ii) A Phantom Stock Option; and 
 
(iii) Such
other Performance Options as the Committee may make available to Participants from time to time. Deemed allocations among the available Performance Options shall be made exclusively for the purpose of determining the Account Value from time to time,
and the Company will have no obligation to invest amounts corresponding to Deferred Amounts in investment vehicles corresponding to the Performance Options selected by the Participant. Participants may change the deemed allocation of their Account
Value among the Performance Options then available under the Plan in accordance with procedures established by the 

AMBAC Financial Group 
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 
 
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Committee from time to
time; provided, however, that, unless otherwise determined by the Committee, no such reallocation shall be made more frequently than quarterly; and providedfurther that no such reallocation may result in less than 10% of
the Account Value being deemed allocated to any single Performance Option. 
 
(c) Determination of Account Value. 
 
The Company will from time to time calculate the Account Value based on the Participant’s Deferred Amounts and his/her then-effective elections with respect to deemed allocation of the Account
among the available Performance Options. Such calculation will be based on the best information available to the Company as of the date of determination, which information may include estimates. In addition, the following shall apply: 
 
(i) Amounts allocated to the Cash Deferral
Option (including amounts resulting from the conversion of Phantom Stock Units as provided in Section 6(c)(ii)), will be credited with interest equivalents as of the first business day of each calendar quarter based upon the average daily balance
credited to such Cash Option (which balance shall include any earnings on amounts so credited pursuant to this Section 6(c)(i)) during the preceding quarter. Interest equivalents will be calculated using the 90-day commercial paper composite rate
published by the Federal Reserve Bank as of the last business day of such preceding calendar quarter, or such other rate as the Committee may designate from time to time by resolution. 
 
(ii) The number of Phantom Stock Units credited to a Participant’s Deferred Compensation
Account (including fractions of Phantom Stock Units) will be determined by dividing (A) the amount of Director Fees deferred by (B) the Fair Market Value of a share of Common Stock on the date of crediting.  
 
(iii) If the Company pays any cash or other
dividend or makes any other distribution in respect of the Common Stock, each Phantom Stock Unit credited to the Deferred Compensation Account of a Participant will be credited with an additional number of Phantom Stock Units (including fractions
thereof) determined by dividing (A) the amount of cash, or the value (as determined by the Committee) of any securities or other property, paid or distributed in respect of one outstanding share of Common Stock by (B) the Fair Market Value of a
share of Common Stock on the date of such payment or distribution. Such credit shall be made effective as of the date of the dividend or other distribution in respect of the Common Stock. 
 
(iv) In determining the value attributable to that portion of a Participant’s Deferred
Compensation Account allocated to Performance Options other than the Cash Deferral Option and the Phantom Share Option, the Company will track the rate of return (positive or negative) over the relevant measurement period of the investment fund,
index or other vehicle by reference to which the Performance Option is defined. 
 
(v) Upon any reallocation of all or any portion of a Participant’s Deferred Compensation Account from one Performance Option to any other Performance Option, 

AMBAC Financial Group 
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 
 
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the Company may charge such Account with an amount not to exceed 5% of the amount so
reallocated. The amount of the charge shall be determined by the Company in its discretion and may vary depending on the Performance Options from which and into which the Account is being reallocated. 
 
(vi) In addition, the returns attributable to
a Deferred Compensation Account shall be subject to the following adjustments: 
 
(A) Returns attributable to any Performance Option other than the Phantom Stock Option shall be reduced to reflect the amount that a corporate taxpayer in the highest tax bracket for federal
corporate tax purposes would pay on the interests, dividends, distribution or similar items of income that it would receive if it had invested in the commercial paper, investment fund, index or other vehicle by reference to which the Performance
Option is defined for the period of time, and in the same amounts, that the relevant Deferred Compensation Account was deemed allocated to such Performance Option. 
 
(B) Upon any change in the deemed allocation of a Participant’s Deferred Compensation
Account among the Performance Options then available, the Account shall be charged with the amount (if any) (the “Deemed Capital Gain Tax Charge”) of capital gains tax that a corporate taxpayer in the highest bracket for federal
corporate tax purposes would pay upon the amount of gain it would recognize had it invested in the investment fund, index or other vehicle by reference to which the Performance Option is defined for the period of time, and in the same amounts, that
the relevant Deferred Compensation Account was deemed allocated to such Performance Option. No credit shall be made to an Account for any loss that would be recognized by a corporate taxpayer that had invested in such Performance Option for such
period and in such amount. 
 
The amount of the
adjustments described in this subparagrpah (vi) shall be determined by the Company in its discretion. The Company shall use its best efforts to apply adjustments on a consistent basis to all Participants who invest in any particular Performance
Option. 
 
(d) Manner of Payment of Deferred
Benefit. All payments of Deferred Benefits under the Plan will be in cash. The Company shall pay a Participant’s Deferred Benefit either in a single lump sum or in a series of installments, as the Committee in its sole discretion shall
determine, provided, however, that if the Committee elects to pay a Participant’s Deferred Benefit in a series of installments, such installments shall be paid no more frequently than quarterly and the Deferred Benefit must be
distributed over a period not exceeding five years. The Committee may, but shall not be required to, consult with the Participant prior to determining the manner of payment of such Participant’s Deferred Benefit. If the Committee elects to pay
a Participant’s Deferred Benefit in a series of installments, the relative size of such installments shall be determined by the Committee in its discretion, and such installments need not be in equal amounts or equal percentages of such
Benefit. The unpaid portion of a Participant’s Deferred Benefit shall continue to be credited with earnings as provided in Section 

AMBAC Financial Group 
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 
 
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6(c) until paid. 
 
(e) Commencement of Payment of Deferred Benefit. For purposes of this Agreement a
“Conversion Date” means the earliest to occur of: 
 
(i)(A) termination of service as an Outside Director (unless upon such termination of service the Participant becomes an employee of the Company or any Subsidiary, in which case the following clause
(B) shall apply), and (B) termination of employment with the Company and its Subsidiaries (unless upon such termination of employment the Participant becomes an Outside Director, in which case the foregoing clause (A) shall apply); 
 
(ii) the date specified in the Deferral
Election Form executed by the Participant; 
 
or 
 
(iii) the
Participant’s death. 
 
Notwithstanding any other term or
provision of this Plan, upon the occurrence of a Conversion Date, any portion of a Participant’s Deferred Compensation Account that is allocated either to the Phantom Unit Option or to any Performance Option other than the Cash Deferral Option
will be converted into the Cash Deferral Option based upon (X) in the case of amounts allocated to the Phantom Unit Option, the Fair Market Value of the Common Stock as of the Conversion Date and (Y) in the case of any Performance Option other than
the Phantom Stock Option, the net asset value or other relevant valuation measure of the investment fund, index or other vehicle by reference to which the Performance Option is defined, determined as of the Conversion Date or, if such net asset
value or other valuation information is not available as of the Conversion Date, as of the latest date preceding the Conversion Date for which the same is generally available. The amount credited to the Cash Deferral Option as a result of such
conversion shall, in the case of conversions from any Performance Option other than the Phantom Stock Option, be subject to the Deemed Capital Gain Tax Charge as described in Section 6(c) above. Following conversion, amounts so credited to the Cash
Deferral Option will be credited with interest equivalents as provided in Section 6(c)(i). Except as provided in Section 6(f), a Participant’s Deferred Benefit shall be paid (if payable in a lump sum), or commence to be paid (if payable in a
series of installments), to the Participant as soon as practicable (but in no event more than 60 days) after the Conversion Date. 
 
(f) Death. In the event of a Participant’s death, the Participant’s entire Deferred Benefit (including any unpaid portion
thereof corresponding to installments not yet paid at the time of death), to the extent not distributed earlier pursuant to Section 6(e), will be distributed in a lump sum to the Participant’s Beneficiary or Beneficiaries (or, in the absence of
any Beneficiary, to the Participant’s estate) on a date, selected by the Committee, no more than six months after the Participant’s date of death. 
 
(g) Statements. The Company will furnish each Participant with a statement setting forth the value of the Participant’s
Deferred Compensation Account as of the end of each calendar year and all credits to and payments from the Deferred Compensation Account during 

AMBAC Financial Group 
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 
 
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such year. Such statement will be furnished no later than 60 days after the end of each calendar year.

 
7.     Designation of Beneficiary

 
(a) Beneficiary Designations. Each
Participant may designate a Beneficiary to receive any Deferred Benefit due under the Plan upon the Participant’s death by executing a Beneficiary Designation Form. A Beneficiary designation is not binding on the Company until the Secretary of
the Board receives the Beneficiary Designation Form. If no designation is made or no designated Beneficiary is alive (or in the case of an entity designated as a Beneficiary, in existence) at the time of the Participant’s death, payments due
under the Plan will be made to the Participant’s estate. 
 
(b) Change of Beneficiary Designation. A Participant may change an earlier Beneficiary designation by executing a later Beneficiary Designation Form. The execution of a Beneficiary Designation Form revokes and rescinds any
prior Beneficiary Designation Form. 
 
8.
    Amendments 
 
(a)
General Power of Committee. Subject to Section 8(b), the Plan may be altered, amended, suspended, or terminated at any time by the Committee in its sole discretion. 
 
(b) When Participants’ Consents Required. Except for a termination of the Plan caused by the
Committee’s determination that the laws upon which the Plan is based have changed in a manner that negates the Plan’s objectives, the Committee may not alter, amend, suspend, or terminate the Plan without the consent of any Participant to
the extent that such action would result in the distribution to such Participant of amounts then credited to his/her Deferred Compensation Account in any manner other than as provided in the Plan or could reasonably be expected to result in the
immediate taxation to such Participant of Deferred Benefits. 
 
9.     Employer’s Obligation 
 
This Plan is unfunded. A Deferred Compensation Account represents at all times an unfunded and unsecured contractual obligation of the Company. Each Participant or Beneficiary will be an unsecured
creditor of the Company. Amounts payable under the Plan will be satisfied solely out of the general assets of the Company subject to the claims of the Company’s creditors. No Participant, Beneficiary or any other person shall have any interest
in any fund or in any specific asset of the Company by reason of any amount credited to him/her hereunder, nor shall any Participant, Beneficiary or any other person have any right to receive any distribution under the Plan except as, and to the
extent, expressly provided in the Plan. The Company will not segregate any funds or assets for Deferred Benefits or issue any notes or security for the payment of any Deferred Benefits. Any reserve or other asset that the Company 

AMBAC Financial Group 
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 
 
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may establish or acquire
to assure itself of the funds to provide benefits under the Plan shall not serve in any way as security to any Participant, Beneficiary or other person for the performance of the Company under the Plan. 
 
10.     No Control by Participant 
 
A Participant shall have no control over his Deferred
Compensation Account except for (i) designating initial allocation among Performance Options and subsequently revising such allocation, in all cases to the extent permitted by the Plan, (ii) designating the date of initial distribution of benefits
on his Deferral Election Form (which designation shall be subject to the terms and conditions of the Plan, including without limitation Section 6) and (iii) designating his or her Beneficiary on a Beneficiary Designation Form. 
 
11.     Restrictions on Transfer 
 
The Company shall pay all amounts payable under the Plan only
to the Participant or Beneficiary designated under the Plan to receive such amounts. Neither a Participant nor his Beneficiary shall have any right to anticipate, alienate, sell, transfer, assign, pledge, encumber or change any benefits to which he
may become entitled under the Plan, and any attempt to do so shall be void. A Deferred Benefit shall not be subject to attachment, execution by levy, garnishment, or other legal or equitable process for a Participant’s or Beneficiary’s
debts or other obligations. 
 
12.
    Election and Revocation Notices 
 
Notices of elections or revocations of elections under the Plan must be in writing. A notice of election or revocation of election will be deemed delivered to the Secretary of the Board on the date it is (i) delivered personally to
the Secretary of the Board at One State Street Plaza, New York, New York 10004 (or at such other address as the Company may from time to time designate as the address for elections and revocations of elections under the Plan), (ii) mailed by
registered mail or certified mail to the Secretary of the Board at such address or (iii) sent by facsimile transmission to the Secretary of the Board at 212-208-3558 (or such other facsimile transmission number as the Company may designate from time
to time for elections and revocations of elections under the Plan), provided that an original signed election or revocation of election is received by the Secretary of the Board no later than 10 business days after such transmission. 
 
13.     Waivers 
 
The waiver of a breach of any provision in the Plan shall not
operate as and may not be construed as a waiver of any later breach. 
 

AMBAC Financial Group 
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 
 
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14.     Governing Law 
 
The Plan shall be construed in accordance with and governed
by the laws of the State of New York. 
 
15.
    Effective Date 
 
The
Plan shall be effective as of December 1, 1993 and Deferral Elections may be made beginning with Eligible Compensation earned during the year beginning January 1, 1994. 
 
16.     Construction 
 
The headings in the Plan have been inserted for convenience of reference only and are to be ignored in any
construction of the Plan’s provisions. If a provision of the Plan is not valid or enforceable, that fact shall in no way affect the validity or enforceability of any other Provision. Use of one gender includes the other, and the singular and
plural include each other. The provisions of the Plan are binding on the Company, each Participating Subsidiary and their respective successors or assigns, and on the Participants, their Beneficiaries, heirs, and personal representatives.

 
17.     Tax Withholding 
 
The Company shall have the right, in connection with any
Deferral Election, (i) to require the Participant to remit to the Company an amount sufficient to satisfy any Federal, state or local tax withholding requirements, (ii) to withhold an amount necessary to satisfy such requirements from other cash
compensation owed to the Participant or (iii) to reduce the amount of Director Fees deferred pursuant to the Plan in order to ensure that all such requirements are satisfied. The Company shall also have the right to deduct from all cash payments
made pursuant to the Plan any Federal, state or local taxes required to be withheld with respect to such payments. 
 
18.     No Right to Reelection or Continued Employment 
 
Nothing in the Plan shall be deemed to create any obligation on the part of the Board to nominate any of its
members for reelection by the Company’s stockholders, nor confer upon any Outside Director the right to remain a member of the Board for any period of time, or at any particular rate of compensation. 
 
19.     No Stockholder Rights 

AMBAC Financial Group 
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS 
 
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The
crediting of Phantom Stock Units to a Participant’s Deferred Compensation Account shall not confer on the Participant any rights as a stockholder of the Company, nor shall such Units confer on any Participant any right to receive stock of the
Company in settlement thereof. 
 
20.
    Adjustment of and Changes in Shares 
 
In the event of any merger, consolidation, recapitalization, reclassification, stock dividend, special cash dividend or other change in corporate structure affecting the Common Stock, the Committee shall make such adjustments, if
any, as it deems appropriate in the number of Phantom Stock Units credited to a Participant’s Deferred Compensation Account. The foregoing adjustments shall be decided by the Committee in its discretion. 
 
21.     About the Plan 
 
The Deferred Compensation Plan for Outside Directors and
Senior Officers was established as of December 1, 1993 by Ambac Inc. In 1997 Ambac Inc. became Ambac Financial Group, Inc. The Plan was amended on October 28, 1998 in order to offer its participants more investment options. 
 
The Plan was amended and restated, effective October 26, 1999
to provide that this Plan be available only to Outside Directors. Senior Officers no longer participate in this Plan as a new deferred plan has been adopted for them. 
 

 
AMBAC
FINANCIAL GROUP, INC. 
 
 
DEFERRED COMPENSATION PLAN 
FOR OUTSIDE
DIRECTORS 
 
 
 
 
Beneficiary Designation Form

 
 

	To:	 	Secretary, Board of Directors 

Ambac Financial Group, Inc. 
 
I
designate
                                        
                                        
                as my primary Beneficiary(ies) of any benefits that become payable under the Ambac Financial Group, Inc. Deferred Compensation Plan for Outside Directors
(the “Plan”) as a result of my death. 
 
If a designated Beneficiary survives me but dies (or if a trust, terminates) before all benefits have been paid to the Beneficiary, I direct the remainder of the payments to be made as the Beneficiary designates or, if the
Beneficiary fails to properly execute a Beneficiary designation, to the Beneficiary’s estate, or, if a trust, to the trustee to be distributed in accordance with the terms of the trust. 
 
This designation revokes and rescinds any prior Beneficiary
designation made by me. 
 
If a Beneficiary is not
named, or if there is no Beneficiary otherwise in existence at the time of my death, I understand that payments will be made according to Section 7(a) of the Plan. 
 
I understand that this Beneficiary designation applies until revoked by my written request. 
 
I also understand that, in executing this Beneficiary
designation, I agree to be bound by the terms and conditions of the Plan and agree that such terms and conditions are binding upon my Beneficiary(ies), distributee(s), and personal representative(s). 
 
 
 
 
 

	 	 	 	 	 	 	

	 	 	 	 	 	 	 	 	 Signature

	
	 	 	
	 	 	 	 	 	

	 	 	 Date
	 	 	 	 	 	 Name (Please Print)

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