Document

DEF 14A 1 a05-0122022ambacproxystate.htm DEF 14A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



			SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ____)

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AMBAC FINANCIAL GROUP, INC.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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			2022 NOTICE OF ANNUAL
			MEETING OF STOCKHOLDERS &
			PROXY STATEMENT


			Ambac Financial Group, Inc. One World Trade Center New York, NY 10007 Tel: 212.658.7470

April 15, 2022

To Our Fellow Stockholders:

It is our pleasure to invite you to our 2022 Annual Meeting of Stockholders to be held on May 24, 2022 at 10:30 a.m. (Eastern). The meeting will be conducted in a virtual only format. Stockholders can participate from any geographic location with Internet connectivity. We believe this format remains important this year in light of the ongoing public health and safety considerations posed by COVID-19. Stockholders may view a live webcast of the Annual Meeting and submit questions digitally during the meeting at www.virtualshareholdermeeting.com/AMBC2022. Please refer to the General Information - Participating in the Annual Meeting section of the Proxy Statement for more details.

We are taking advantage of the Securities and Exchange Commission (“SEC”) rules that allow companies to furnish proxy materials to stockholders via the internet. This electronic process gives you fast, convenient access to the materials, reduces the impact on the environment and reduces our printing and mailing costs. If you received a Notice Regarding the Availability of Proxy Materials (“Internet Notice”) by mail, you will not receive a printed copy of the proxy materials unless you specifically request them. The Internet Notice instructs you on how to access and review all of the important information contained in this Proxy Statement, as well as how to submit your proxy over the internet. If you want more information, please see the General Information section of this Proxy Statement or visit the Annual Meeting of Stockholders section of our Investor Relations website at http://ir.ambac.com.

Your vote is important. Whether or not you plan to attend the Annual Meeting, we hope you will vote as soon as possible. You may vote over the internet or by phone or, if you requested to receive printed proxy materials, by mailing a proxy or voting instruction card. Please review the instructions on each of your voting options described in this Proxy Statement, as well as in the Internet Notice you received in the mail.

Thank you for your interest in Ambac.

Sincerely,

Jeffrey S. Stein

Chairman

Claude LeBlanc

President and Chief Executive Officer

AMBAC FINANCIAL GROUP, INC.

NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS

Time and Date

10:30 a.m. (Eastern) on May 24, 2022

Place

The 2022 Annual Meeting of Stockholders will be conducted in a virtual format at www.virtualshareholdermeeting.com/AMBC2022.* Stockholders of record will be able to vote and ask questions during the meeting through the online platform.

Items of Business

(1) To elect seven members of the Board of Directors to hold office until the next annual meeting of stockholders or until their respective successors have been elected and qualified.

(2) To approve, on an advisory basis, the compensation of our named executive officers.

(3) To ratify the appointment of KPMG LLP as Ambac’s independent registered public accounting firm for the fiscal year ending December 31, 2022.

Adjournments and Postponements

Any action on the items of business described above will be considered at the Annual Meeting at the time and on the date specified above or at any time and date to which the Annual Meeting may be properly adjourned or postponed.

Record Date

You are entitled to vote only if you were an Ambac stockholder as of the close of business on March 28, 2022 (Record Date). You will need proof of ownership of our common stock to enter the meeting.

Voting

Your vote is very important. Whether or not you plan to attend the Annual Meeting, we encourage you to read this Proxy Statement and submit your proxy or voting instructions as soon as possible. For specific instructions on how to vote your shares, please refer to the instructions on the Notice Regarding the Availability of Proxy Materials (“Internet Notice”) you received in the mail, the section titled “General Information - Information About the Annual Meeting and Voting” in this Proxy Statement or, if you requested to receive printed proxy materials, your enclosed proxy or voting instruction card.

By order of the Board of Directors,

William J. White

Corporate Secretary

* Stockholders can participate from any geographic location with Internet connectivity. We believe this format remains important this year in light of the ongoing public health and safety considerations posed by COVID-19. Stockholders may view a live audio webcast of the Annual Meeting and submit questions digitally during the meeting at www.virtualshareholdermeeting.com/AMBC2022. Please refer to the General Information - Participating in the Annual Meeting section of the Proxy Statement for more details.

This notice of Annual Meeting and Proxy Statement and form of proxy are being distributed and made available on or about April 15, 2022.


Table of Contents
PROXY STATEMENT SUMMARY	1	Executive Sessions	30
Performance Against Compensation Metrics	2	Outside Advisors	30
Response to 2021 Say on Pay Vote and Stockholder Outreach	4	Board Effectiveness	30
Key Features of Our Executive Compensation Program	5	Corporate Governance Guidelines	31
CORPORATE SOCIAL RESPONSIBILITY and SUSTAINABILITY	5	Code of Business Conduct	31
Business Model	6	Board Compensation Arrangements for Non-Employee Directors	31
Corporate Governance	6	COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	34
ESG Governance and Oversight	8	EXECUTIVE COMPENSATION	36
Environmental	9	Executive Officers	36
Climate Change Risk	9	Compensation Discussion and Analysis	38
Data Security and Privacy	9	Compensation Committee Report	59
Corporate Social Responsibility	9	2021 Summary Compensation Table	60
Diversity and Inclusion	10	Grants of Plan-Based Awards in 2021	61
Training, Development and Well-Being of Employees	10	Agreement with Claude LeBlanc	62
Guiding Principles Concerning Responsible Investing	11	Agreements with Other Executive Officers	64
GENERAL INFORMATION	12	Outstanding Equity Awards at 2021 Fiscal Year-End	67
INCORPORATION BY REFERENCE	19	Stock Vested in 2021	67
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	20	Potential Payments Upon Termination or Change-in-Control	68
Board of Directors	20	Pay Ratio Disclosure	70
Board Leadership Structure	25	INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	71
Board Committees	25	THE AUDIT COMMITTEE REPORT	72
Board’s Role in Risk Oversight	28	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	73
Director Independence	28	PROPOSAL NUMBER 1	75
Compensation Committee Interlocks and Insider Participation	29	PROPOSAL NUMBER 2	76
Consideration of Director Nominees	29	PROPOSAL NUMBER 3	77


Ambac Financial Group, Inc. \| i \| 2022 Proxy Statement

PROXY STATEMENT SUMMARY

Below are the highlights of important information you will find in this Proxy Statement for Ambac Financial Group, Inc. ("Ambac" or the "Company") and its subsidiaries. As it is only a summary, please review the complete Proxy Statement before you vote.


Ambac Financial Group Fiscal Year 2021 Highlights

Performance Highlights:

The following events summarize our performance highlights for fiscal year 2021:



l			Decreased our insured portfolio net par outstanding at Ambac Assurance Corporation and its subsidiaries ("AAC") by 17% to $28.0 billion from year-end 2020.
l			Decreased Adversely Classified Credits and Watch List Credits at AAC by 23%, to $10 billion.
l			Active de-risking transactions accounted for $3 billion of the $6 billion reduction in net par in 2021 and $2 billion of the $3 billion reduction in adversely classified and watch list net par exposure
l			Executed a plan support agreement with the Oversight Board for the Commonwealth of Puerto Rico to restructure AAC’s insured PRIFA Rum Tax exposure; Joined plan support agreements that the Oversight Board had previously entered into with other major creditors that addressed the restructuring of AAC’s GO, PBA, HTA and CCDA exposures
l			Trial date for the Bank of America/Countrywide case is scheduled for September 7, 2022
l			Executed an exchange transaction for junior surplus notes resulting in extinguishment of $76 million in debt and accrued interest at Ambac Assurance Corporation.
l			Material advancement and growth of the Company' specialty P&C insurance platform, including: ◦The establishment of the Everspan Group of companies with an A.M. Best financial strength rating of 'A-' (Excellent), Class VIII designation; ◦Ten program partners signed to date; ◦Platform expansion with the acquisition of four additional admitted carriers; and ◦Admitted capabilities in all 50 states.
l			Xchange Benefits, LLC ("Xchange") was onboarded in early 2021 following its acquisition by Ambac on December 31, 2020.
l			Xchange successfully expanded its distribution and carrier network and distributed approximately $6 million of earnings to date to Ambac, consistent with our current ownership stake.


Ambac Financial Group, Inc. \| 1 \| 2022 Proxy Statement

Performance Against Compensation Metrics

Performance Against 2021 Short Term Incentive Plan Metrics. Short Term Incentive Plan ("STIP") awards for 2021 were determined based on a structured and objective approach in which 50% of an executive officer's annual STIP award was based on the Company’s achievement of pre-established financial performance targets at the Company related to reductions in: (i) Net Par Outstanding in the insured portfolio at AAC and (ii) Gross Operating Run Rate Expense; while the remaining 50% of an executive officer's annual STIP award was based on strategic performance goals, including business unit results and individual performance. For the 2021 fiscal year, we established the following goals for each of our STIP financial performance metrics and assigned weighting factors as follows:


	Weighting Factor	Threshold ($ in millions)	Target ($ in millions)	Maximum ($ in millions)
Net Par Outstanding (1)	80%	$30,250	$29,540	$28,940
Gross Operating Run Rate Expenses (2)	20%	$17.2	$16.7	$16.4

The following graph/charts shows the Company's 2021 actual performance compared to the threshold, target and maximum achievement levels as established for each of the financial performance metrics.


Net Par Outstanding (1)						Gross Operating Run Rate Expenses (2)

Target

Threshold

Maximum

------

Actual

(1)Reductions in Net Par Outstanding as of December 31, 2021 under the STIP were measured against Net Par Outstanding as of January 1, 2021.

(2)Gross Operating Run Rate Expenses is measured by comparing actual gross operating run rate expenses for the fourth quarter of a fiscal year to performance goals established against budgeted amounts.

With respect to reductions in Net Par Outstanding, Ambac achieved the maximum performance goal set for that metric as Net Par Outstanding was reduced to $27.9 billion. With respect to reductions in Gross Operating Run Rate Expenses, Ambac performed slightly better than the target performance goal set for that metric, as Gross Operating Run Rate Expenses for the fourth quarter of 2021 was $16.6 million.


Ambac Financial Group, Inc. \| 2 \| 2022 Proxy Statement

Performance against 2018 LTIP metrics. In 2018, we established the following three year goals for each of our LTIP performance metrics.


At Ambac Assurance and Subsidiaries		At Ambac	Percentage of Target Award Earned
Net Asset Value (1) ($ in millions)	Watch List & Adversely Classified Credits Outstanding (1) ($ in billions)	Cumulative EBITDA (1) ($ in millions)

$(300)	$15.5	$30	200%
$(500)	$16.6	$17	100%
$(650)	$18.8	$—	—%

(1) Linear interpolation between levels results in a proportionate amount of the Ambac LTIP Target Award becoming earned and vested.

The following graph/charts shows the Company's actual performance over the three year performance period running from January 1, 2018 through December 31, 2020, compared to the achievement levels set forth in the chart above.

AAC
Adjusted Net Asset Value

Watch List & Adversely Classified Credits Outstanding

Ambac
Cumulative EBITDA

For the 2018 LTIP, performance was determined based on (i) increased Net Asset Value at AAC weighted 42.5%; (ii) reductions in Watchlist & Adversely Classified Credit net par outstanding at AAC weighted at 42.5%; and Cumulative EBITDA at Ambac weighted at 15%. The Net Asset Value was projected to decrease over the performance period but certain successful favorable achievements by management, such as (i) COFINA restructuring, (ii) Ballantyne Re PLC settlement, (iii) AMPS Exchange and (iv) a Citibank - SEC settlement all contributed to the Net Asset Value increasing during the performance period. Reductions of Watchlist & Adversely Classified Credit net par outstanding at AAC during the performance period were positively impacted by active de-risking strategies including credit exposure reductions at Ballantyne Re PLC, NJ Transportation Fund, COFINA and other risk remediation and reinsurance transactions. Cumulative EBITDA at Ambac during the performance period benefited from higher investment returns related to holdings of AAC issued securities and the receipt of annual expense reimbursements from AAC over the performance period.


Ambac Financial Group, Inc. \| 3 \| 2022 Proxy Statement

Response to 2021 Say on Pay Vote and Stockholder Outreach

At our 2021 annual meeting, our Say on Pay proposal received support from stockholders representing approximately 75% of our common stock present, in person or by proxy at the meeting. We greatly appreciate the support of a significant majority of our stockholders with regard to our executive compensation program and we remain committed to a corporate governance approach that aligns the interest of management, the Board of Directors, and our stockholders. Following the 2021 say-on-pay vote, the Chairman of the Board, along with the Chairs of the Compensation Committee and the Governance and Nominating Committee solicited feedback from stockholders representing just over 63% of our outstanding common stock and from certain proxy advisory firms. These stockholders provided important feedback concerning our executive compensation program.

While the feedback on our executive compensation program was generally favorable, a number of stockholders provided feedback on certain changes they would like the Company to adopt which include the changes listed below. As a result of the feedback received from stockholders, the Compensation Committee made the following changes to the 2022 compensation program:


WHAT WE HEARD		WHAT WE DID
Place a greater emphasis on total stockholder return as part on of the compensation program.	l	Increased the impact of the rTSR modifier from +/- 10% to +/- 20% with respect to our LTIP Awards beginning in 2022 so that any final performance stock unit ("PSU") award payout at the end of the three year performance period may be increased or decreased by 20% if the Company's stock performance compared to a peer group is at or above the 75th percentile or at or below the 25th percentile, respectively.
Provide for a three year measurement period in judging performance under the LTIP.	l	Changed the performance measurement period from two years to three years for determining the achievement of goals against pre-set metrics for 2022 LTIP awards.
Provide enhanced disclosure around the performance considerations utilized to determine performance results under the STIP’s strategic performance goals.	l	Enhanced disclosure included in the CD&A related to the performance considerations underlying the strategic performance goals utilized to ascertain performance with respect to these goals under the STIP.


Ambac Financial Group, Inc. \| 4 \| 2022 Proxy Statement

Key Features of Our Executive Compensation Program



Compensation Aligned to Market Levels	l	The Chief Executive Officer’s total compensation is benchmarked to what the Compensation Committee believes is an appropriate level of compensation compared to peers.

Rigorous Performance Metrics	l	Rigorous performance goals based on multiple metrics for our short-term incentive program. Incentive compensation program for our Chief Executive Officer structured to align with the incentive compensation program for all of our executive officers.
	l	Fifty percent of our Chief Executive Officer's annual incentive award is based on the achievement of objective financial performance metrics that have been established by the Compensation Committee pursuant to our Short-Term Incentive Compensation Plan and the remainder of the annual incentive award opportunity is based on strategic performance goals.
	l	The determination of the portion of the annual incentive award that is based on strategic performance goals considers certain factors, including, but not limited to, evaluation of business unit performance and individual performance. The Compensation Committee believes that it is important to include strategic performance goals in the STIP given the Company's continuing exposure to events that are outside the control of management and could have a substantial negative impact on our financial performance.

Included a restricted stock unit component in the Long Term Incentive Compensation Plan	l	In order to encourage the retention of our most valued employees and to more closely align their interests with that of our stockholders, we included time based restricted stock units ("RSUs") and performance stock units ("PSUs") as a components of our LTIP awards, which for the 2022 grants were denominated 70% in PSUs and 30% in RSUs.

Overall, our current executive compensation program heavily emphasizes performance and equity-based compensation to closely align management's incentives with stockholder interests, and includes other practices that we believe serve stockholder interests such as an executive stock ownership and retention policy, not providing tax “gross-up” payments, providing limited perquisites, adopting plan provisions relating to claw-backs of incentive awards and maintaining policies prohibiting the hedging or pledging our Company’s stock.

Corporate Social Responsibility and Sustainability

Ambac's long-term success depends not only on how we execute against our strategic priorities but also how we manage our relationships with our stakeholders, the communities in which we work, and our employees. For this reason, we take an integrated approach to sustained value creation and managing risk in and around our business. In 2021, Ambac developed responses to the Global Reporting Initiative ("GRI") voluntary reporting framework and, with respect to certain investments, the "key performance indicators" promulgated by the Sustainability Accounting Standards Board ("SASB"). See the "Environmental, Social and Governance" section of Ambac's website, at https://ambac.com/environmental-social-and-governance/default.aspx to review our GRI Content Index and SASB Content Index.


Ambac Financial Group, Inc. \| 5 \| 2022 Proxy Statement

Business Model

Ambac Financial Group, Inc. is a financial services holding company. Ambac's business operations include:

•Financial Guarantee ("FG") Insurance — Ambac Assurance Corporation and its wholly owned subsidiary, Ambac Assurance UK Limited (“Ambac UK”) are legacy financial guarantee insurance carriers, both of which have been in runoff since 2008.

•Specialty Property & Casualty Program Insurance — Currently includes excess and surplus lines (“E&S” or “nonadmitted”) insurer Everspan Indemnity Insurance Company and admitted insurer Everspan Insurance Company, along with four other admitted insurance carrier subsidiaries (collectively, “Everspan”). Everspan insurance carriers that are currently part of the intercompany pooling agreement received an AM Best Financial Strength rating of 'A-' (Excellent) in February 2021 and launched its first insurance program in May 2021.

•Managing General Agency / Underwriting — Currently includes Xchange Benefits, LLC (“Xchange”), a property and casualty Managing General Underwriter of which AFG acquired 80% on December 31, 2020.

Our corporate initiatives are governed by our corporate Mission, Vision and Values.

MISSION

VISION

VALUES

Optimize our business and its components to achieve maximum return for stockholders;

Transition to a growth-oriented platform sufficiently capitalized to support businesses that are synergistic with Ambac’s core competencies

Culture of respect, inclusion, collaboration and transparency;

Attract, retain, and reward top performers who meet standards of excellence, integrity, and collaboration

Aggressively pursue financially sound strategies to reduce risk and decrease the size of the insured portfolio

Corporate Governance

Our Board conducts an annual review of its governance practices, committee charters and governance policies to ensure that the Company’s practices are in line with current leading practices. We are committed to a corporate governance approach that aligns the interests of management, the Board of Directors and our stockholders. In furtherance of this approach, over the course of 2021 our investor relations department reached out to stockholders representing approximately 63% of our outstanding common stock to offer a meeting with the Chairman of the Board and the Chairs of the Compensation Committee and the Governance and Nominating Committee. The purpose of the meeting was to solicit feedback from our stockholders on executive compensation and corporate responsibility, including environmental, social, and governance matters. Our Chief Executive Officer provided a brief business update and participated in a discussion regarding the event driven nature of our business at the outset of each meeting before excusing himself and turning the meeting over to the independent directors. Stockholders positively acknowledged our efforts on Environmental, Social and Governance ("ESG") related matters to date and suggested we continue to enhance our ESG efforts and related disclosures.

Consistent with our Board's proactive efforts in soliciting and responding to stockholder feedback and, following the recommendations of the Governance and Nominating Committee and the Compensation Committee, over the past few years we've implemented the following changes relating to our corporate governance practices and compensation program:


Ambac Financial Group, Inc. \| 6 \| 2022 Proxy Statement



l			In 2022, we increased the weighting of the Short-Term Incentive Compensation Plan ("STIP") financial performance metrics from 50% to 60%; and added a financial performance metric for the specialty P&C insurance business weighted at 20%.
l			In 2022, we increased the proportion of performance stock units ("PSUs") to restricted stock units ("RSUs") granted from 60%/40% to 70%/30%, respectively.
l			In 2022, we increased the rTSR modifier with respect to our LTIP awards from +/- 10% to +/- 20%.
l			In 2021, an internal ESG committee was established to focus on enhancement of relevant policies, procedures and disclosures to reflect Ambac’s ESG practices and objectives.
l			In 2020 we eliminated director meeting fees, which previously applied after a director had attended eight meetings of the Board, or eight meetings of a committee that he or she attended as a member.
l			We adopted an Executive Stock Ownership and Retention Policy (“Stock Ownership Policy”) applicable to all of our executive officers.
l			We adopted a recoupment policy (otherwise known as a "claw-back") providing that in the event of a material financial restatement or the imposition of a material financial penalty, the Company may recoup incentive-based compensation received by our executive officers during a three-year look-back period.
l			We made reductions to our Watch List and Adversely Classified Credits an additional performance-based financial metric in our Long-Term Incentive Compensation Plan.



Ambac's corporate governance practices drive accountability to stockholders
Independent Oversight and Leadership			ü 6 out of 7 directors independent ü Limited additional current Board obligations (no director sits on more than 3 other public company boards), allowing for focus on the execution of Ambac's strategy ü Separate Chairman and CEO roles ü Average tenure less than 6 years (vs. S&P average of 8.4) ü Added four new independent directors, including two women, in the last five years with a focus on core skills and experience, as well as diversity and inclusion

Emphasis on Stockholder Rights			ü No classified board - all directors elected annually ü No stockholder rights plan

Stockholder Engagement			ü Actively engaged with stockholders on corporate governance issues, including Board diversity ü Track record of proactive, ongoing stockholder dialogue

Our Board of Directors is comprised of individuals with diverse skill sets which is necessary in light of the unique nature of Ambac’s business. Five of our Board members self-identify as men, two self-identify as women, and one director self-identifies as Hispanic.


Ambac Financial Group, Inc. \| 7 \| 2022 Proxy Statement

CEO

Experience

CFO

Experience

Insurance

Expertise

Risk

Management

Investment

Experience

Restructuring

Expertise

Ian Haft

David Herzog

Lisa G. Iglesias

Joan Lamm-Tennant

Claude LeBlanc

C. James Prieur

Jeffrey S. Stein

_____________________________________

ESG Governance and Oversight

In 2021, an internal ESG committee was established to focus on enhancement of relevant policies, procedures and disclosures to reflect Ambac’s ESG practices and objectives. To ensure that ESG is appropriately managed and communicated throughout the organization, we have designed the following governance structure:

•Board of Directors: Primary oversight of ESG activities has been assigned to the Governance & Nominating Committee, which will oversee strategy and public reporting.

•Executive Leadership Sponsors: Ambac's CEO, General Counsel and Chief of Staff provide direction on ESG strategy and public reporting.

•ESG Committee: Senior leaders from Investor Relations, Legal, Human Resources and Investment Portfolio Management meet frequently to drive decision-making, accountability and ownership of ESG reporting and policy initiatives.

•Employees: Ambac’s commitment to ESG is firm-wide and includes input and participation from employees across the organization.

The ESG Committee has developed a GRI content index, along with certain SASB investment related "key performance indicators." See the "Environmental, Social and Governance" section of Ambac's website.


Ambac Financial Group, Inc. \| 8 \| 2022 Proxy Statement

Environmental

Ambac is committed to maintaining an environmentally conscious workplace. Given the relatively small size of the Company, energy consumption is not a material initiative. As a tenant Ambac has no control over energy use in the office space it occupies. Our employee count is under 150 and emissions is not practical to track.

Climate Change Risk

Focus on climate change risk is not deemed a current material risk to Ambac, and Ambac does not isolate the effect of climate change on its insured portfolio. As the business continues to transform, climate change risk materiality will be monitored through our risk management process.

Data Security and Privacy

Ambac relies on digital technology to conduct its businesses and interact with internal and external parties. With this reliance on technology comes associated security risks. We maintain an information security program that is designed to protect and preserve the confidentiality, integrity and availability of information located on our systems.

Risk awareness is an important component of Ambac’s cybersecurity program. We require cybersecurity awareness training for all of our employees at the time of onboarding and on an annual basis. The training is designed to educate employees about cyber risk and help them identify and avoid potential threats. We also regularly test employee awareness through simulated phishing exercises. Ambac also engages third-party consultants to conduct penetration tests and periodic risk assessments to identify any potential technical security vulnerabilities.

Given the ongoing proliferation of cyber threats, we continue to mature our defense capabilities with enhanced monitoring of our computer systems for potential new threats. We also leverage the use of multi-factor authentication with the aim to provide an additional layer of defense against unauthorized access to our systems.

Ambac’s business operations also rely on the continuous availability of its computer systems. We maintain and test our business continuity plan and report results to senior management and our Board of Directors. The Board of Directors oversees the risk management process and engages with management on risk management issues, including cybersecurity risks.

We also maintain a cyber incident response plan that outlines the appropriate processes and procedures for incident management (including minimizing impact, investigating, and remediating root cause) and complying with applicable legal requirements (including timely and accurate reporting of any required cybersecurity or privacy incident).

Ambac and its subsidiaries are subject to numerous laws and regulations in a number of jurisdictions regarding its information systems, particularly with regard to certain personal information. We have implemented measures to prevent access to the personal information on our system. Ambac's and its subsidiaries’ privacy policies are available on their respective websites.

_____________________________________

Corporate Social Responsibility

•Ambac is a purpose-driven company committed to making meaningful progress each year to integrate our social responsibility efforts with our long-term strategy and business operations. Our Board of Directors, senior management team, and employees understand the importance of social responsibility as a means to deliver greater value as we operate our business each day and support Ambac's long-term strategy.


Ambac Financial Group, Inc. \| 9 \| 2022 Proxy Statement

Diversity and Inclusion

•Ambac is committed to maintaining a work environment in which all individuals are treated with respect and dignity.

•Our Code of Business Conduct provides that each person has the right to work in a professional atmosphere that promotes equal opportunities and prohibits discriminatory practices, including sexual harassment. Discrimination or harassment, whether based on race, creed, color, religion, age, sex, gender, gender identity, or gender expression, disability, sexual orientation, national origin, marital status, alienage, citizenship status, military status or any other protected class under U.S. Federal or State law or the laws of any other country in which Ambac resides or does business -- and regardless of whether it occurs at the office or at an outside, Ambac-sponsored setting -- is unacceptable and will not be tolerated.

•All Ambac employees, officers, and directors are required to participate in an instructor led scenario based conscious/unconscious bias awareness training to ensure awareness of, and compliance with, the Code of Business Conduct. Additionally, all employees, officers and directors attend anti-harassment training annually.

Training, Development and Well-Being of Employees

Developing employees professionally and personally strengthens the entire organization. Ambac is committed to the professional development and personal health of its employees through established policies and events which we believe have contributed to our low 5.4% voluntary turnover ratio.

•In 2018, a management development program was instituted to identify certain rising employees to be appointed to a senior advisory team, the goal of which is to promote, retain, and incentivize talented individuals within the Company. Selected senior managers provide input and lead initiatives related to improving work environment/culture and corporate efficiencies, fostering better communication and team building.

•Professional development is encouraged for all employees with fee and tuition reimbursement.

•Ambac’s commitment to the health and safety of its employees was recognized by the International WELL Building Institute (IWBI) with the award of the WELL Health-Safety Rating. The WELL Health-Safety Rating is an evidence based, third-party verified rating, focusing on operational policies, maintenance protocols, stakeholder engagement and emergency plans to address the post-COVID environment now and broader health and safety-related issues in the future.

•In 2022, Ambac was awarded the WELL Health-Safety Rating following the successful completion of 15 core feature requirements in the following areas: Health Service Resources, Emergency Preparedness Programs, Air and Water Quality Management, Stakeholder Engagement and Communication, and Cleaning and Sanitation Procedures.

•Health and wellness training events are held regularly including financial wellness seminars.

•In 2021, the Company engaged an infectious disease specialist to lead multiple informational panel discussions, and provide support and guidance to our employees regarding proper COVID-19 protocols and to work with the Executive Management team to implement robust return to office protocols to minimize COVID 19 disruptions.

Philanthropy

•Ambac supports many charities, both domestic and abroad and beginning in 2019, Ambac instituted a paid time off employee volunteering program, promoting and providing opportunities for employees to volunteer for causes that benefit our communities.


Ambac Financial Group, Inc. \| 10 \| 2022 Proxy Statement

•To show corporate and employee commitment to supporting medical personnel at the epicenter of the COVID-19 crisis in New York and London in 2020, Ambac matched employee contributions to New York City Health & Hospitals Corporation and the St. George‘s Hospital Charity in the UK, both of which are focused on providing assistance to hospital personnel and their families.

_____________________________________

Guiding Principles Concerning Responsible Investing

•The principal objective in the management of investment portfolios for Ambac and its subsidiaries is to maximize risk-adjusted returns, subject to regulatory and other constraints. These constraints include maintenance of an appropriate level of liquidity and prudent management of interest rate and credit risk. Ambac also recognizes the importance of ESG considerations when assessing investment returns and risks over time. Operational and reputational risks relating to assets held in the investment portfolios are among these considerations.

•Achieving a competitive investment return is an important determinant of the Company’s ability to satisfy its obligations to policyholders. Ambac seeks to balance that goal with an intent to observe ESG principles. These include commitments to the environment, to diversity and to ethical conduct.

•The majority of the investments held by Ambac and its subsidiaries are managed by third party investment managers. Most are signatories to the U.N. Principles for Responsible Investment (“UNPRI”). Such signatories are required to incorporate ESG factors into their respective investment processes and we encourage all our external investment managers to adhere to their own ESG policies. In this way we can more effectively assess and monitor ESG-related exposures.

•Beginning in 2022, management began to provide regular reports to Ambac's Governance and Nominating Committee regarding ESG investing matters.

_____________________________________


Ambac Financial Group, Inc. \| 11 \| 2022 Proxy Statement

AMBAC FINANCIAL GROUP, INC.
One World Trade Center
New York, New York 10007

PROXY STATEMENT

GENERAL INFORMATION

INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

Proxy Materials

Why did I receive these Proxy Materials?

The Board of Directors of Ambac Financial Group, Inc. ("Ambac" or the "Company") has made these materials available to you on the internet or, upon your request, has delivered printed proxy materials to you, in connection with the solicitation of proxies for use at Ambac’s 2022 Annual Meeting of Stockholders (the "Annual Meeting"), which will take place on May 24, 2022 at 10:30 a.m. (Eastern). The meeting will be conducted in a virtual format only. Stockholders can participate from any geographic location with Internet connectivity. We believe this format is particularly important this year in light of the continued public health and safety considerations posed by COVID-19 and its variants. Stockholders may view a live webcast of the Annual Meeting and submit questions digitally during the meeting at www.virtualshareholdermeeting.com/AMBC2022. Please refer to the Participating in the Annual Meeting section of the Proxy Statement for more details. As a stockholder, you are invited to participate in the Annual Meeting and are requested to vote on the items of business described in this Proxy Statement. This Proxy Statement includes information that we are required to provide to you under SEC rules and that is designed to assist you in voting your shares.

Why did I receive a notice in the mail regarding the internet availability of proxy materials instead of a full set of proxy materials?

In accordance with rules adopted by the SEC, we may furnish proxy materials, including this Proxy Statement and our 2021 Annual Report to Stockholders, to our stockholders by providing access to such documents on the internet instead of mailing printed copies. Stockholders will not receive printed copies of the proxy materials unless they request them. Instead, the Internet Notice, which was mailed to our stockholders, will instruct you as to how you may access and review all of the proxy materials on the internet. The Internet Notice also instructs you as to how you may submit your proxy on the internet, by phone or by mail. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting such materials in the Internet Notice.

What is included in the proxy materials?

The proxy materials (collectively, “Proxy Materials”) include:

•Our Proxy Statement for the 2022 Annual Meeting of Stockholders;

•Our 2021 Annual Report to Stockholders, which includes our Annual Report on Form 10-K for the fiscal year ended December 31, 2021; and

•The proxy card or a voting instruction card for the Annual Meeting.


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How can I access the Proxy Materials over the internet?

The Internet Notice, proxy card or voting instruction card will contain instructions on how to:

•View our Proxy Materials for the Annual Meeting on the internet and vote your shares; and

•Instruct us to send our future Proxy Materials to you electronically by email.

Our Proxy Materials are available at www.proxyvote.com.

Choosing to receive your future Proxy Materials by email will save us the cost of printing and mailing documents to you, and will reduce the impact on the environment of printing and mailing these materials. If you choose to receive future Proxy Materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive Proxy Materials by email will remain in effect until you terminate it.

What information is contained in this Proxy Statement?

The information in this Proxy Statement relates to the proposals to be voted on at the Annual Meeting and details regarding the voting process, the compensation of our directors and certain of our executive officers, corporate governance, and certain other required information.

Why did I only receive one set of materials when there is more than one stockholder at my address?

If two or more stockholders share one address, each such stockholder may not receive a separate copy of our Proxy Materials or Internet Notice. Stockholders who do not receive a separate copy of our Proxy Materials or Internet Notice and want to receive a separate copy may request to receive a separate copy of, or additional copies of, our Proxy Materials or Internet Notice via the internet, phone or email, as outlined above. Upon such request we shall furnish such copy, or additional copies, promptly. Stockholders who share an address and receive multiple copies of our Proxy Materials or Internet Notice may also request to receive a single copy by writing to our Investor Relations Department, Ambac Financial Group, Inc., One World Trade Center, New York, New York 10007.

Voting Information

What items of business will be voted on at the Annual Meeting?

The items of business scheduled to be voted on at the Annual Meeting are:

• The election of seven directors to our Board of Directors.

•To approve, on an advisory basis, the compensation of our named executive officers.

• The ratification of the appointment of KPMG LLP as Ambac’s independent registered public accounting firm for the fiscal year ending December 31, 2022.

We will also consider any other business that properly comes before the Annual Meeting.

How does the Board of Directors recommend that I vote?

Our Board of Directors recommends that you vote your shares:

ü "FOR” each of its nominees to the Board of Directors.

ü "FOR” the approval, on an advisory basis, of the compensation of our named executive officers.

ü "FOR” the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the 2022 fiscal year.


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What shares can I vote?

Each share of Ambac common stock issued and outstanding as of the close of business on the Record Date for the 2022 Annual Meeting of Stockholders is entitled to be voted with respect to all items on which stockholders may vote at the Annual Meeting. You may vote all shares owned by you as of the Record Date, including (i) shares held directly in your name as the stockholder of record, and (ii) shares held for you as the beneficial owner in street name through a broker, bank, trustee, or other nominee. On the Record Date, we had 46,545,232 shares of common stock issued and outstanding.

How many votes am I entitled to per share?

Each holder of shares of common stock is entitled to one vote for each share of common stock held as of the Record Date. The voting rights of certain substantial holders of common stock are restricted. A holder (including any group consisting of such holder and any other person with whom such holder or any affiliate or associate of such holder has any agreement, contract, arrangement or understanding with respect to acquiring, voting, holding or disposing of our common stock) will be entitled to vote only such number of shares that would equal (after giving effect to this restriction) one vote less than 10% of the votes entitled to be cast by all holders of our outstanding common stock. This restriction does not apply if the acquisition or ownership of common stock has been approved, whether before or after such acquisition or first time of ownership, by the Wisconsin Insurance Commissioner. Our certificate of incorporation also restricts the right of certain transferees to vote certain of their shares to the extent that, as a result of a transfer of shares (or any series of transfers of which such transfer is a part), either (i) any person or group of persons shall become a five-percent stockholder or (ii) the percentage stock ownership interest in our shares of any five-percent stockholder (including a group of persons treated as a five-percent stockholder) shall be increased.

What is the difference between holding shares as a stockholder of record and as a beneficial owner?

Most Ambac stockholders hold their shares as a beneficial owner through a broker or other nominee rather than directly in their own name. If your shares are registered directly in your name with our transfer agent, Computershare Inc., you are considered, with respect to those shares, the stockholder of record. If your shares are held in an account at a brokerage firm, bank, broker-dealer, trust, or other similar organization, like the vast majority of our stockholders, you are considered the beneficial owner of shares held in street name.

How can I vote my shares at the Annual Meeting?

Shares held in your name as the stockholder of record or held beneficially in street name may be voted by you in person at the Annual Meeting or by proxy. Even if you plan to participate in the virtual Annual Meeting, we recommend that you also submit your proxy or voting instructions as described below so that your vote will be counted if you later decide not to participate in the virtual Annual Meeting. If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items. If no instructions are indicated, the shares will be voted as recommended by the Board of Directors.

How can I vote my shares without attending the Annual Meeting?

Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct how your shares are voted without participating in the virtual Annual Meeting. You can vote by proxy over the internet or by phone by following the instructions provided in the Internet Notice, or, if you requested to receive printed Proxy Materials, you can also vote by mail pursuant to instructions provided on the proxy card. If you hold shares through a bank or broker, please refer to your proxy card or other information forwarded by your bank or broker to see which voting options are available to you.


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•You may submit your proxy by using the internet. The address of the website for submitting your proxy via the Internet is www.proxyvote.com for both registered holders and beneficial owners of our common stock holding in street name. Internet proxy submission is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time on May 23, 2022. Easy-to-follow instructions allow you to submit your proxy and confirm that your instructions have been properly recorded.

•You may submit your proxy by calling. The phone number for submitting your proxy by phone is 1-800-690-6903. Submitting your proxy by phone is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time on May 23, 2022.

•You may submit your proxy by mail. As a result of implementing “Notice and Access,” you may request to receive printed copies of Proxy Materials by mail or electronically by email by following the instructions provided in the Internet Notice. You may submit your request in writing to our Corporate Secretary at Ambac Financial Group, Inc., One World Trade Center, New York, New York 10007 (or you can send an email to corporatesecretary@ambac.com). Once you receive your Proxy Materials, simply mark your proxy card, date and sign it, and return it in the postage-paid envelope.

Can I change my vote or revoke my proxy?

You may change your vote at any time prior to the taking of the vote at the Annual Meeting. You may change your vote by (i) granting a new proxy bearing a later date (which automatically revokes the earlier proxy) using any of the methods described above (until the applicable deadline for each method), (ii) providing a written notice of revocation to Ambac’s Corporate Secretary at Ambac Financial Group, Inc., One World Trade Center, New York, New York 10007 (and you can send a copy via email to corporatesecretary@ambac.com), prior to your shares being voted, or (iii) participating in the virtual Annual Meeting and casting a vote. Participation in the meeting will not cause your previously granted proxy to be revoked unless you specifically so request or cast a vote at the virtual Annual Meeting.

Is my vote confidential?

Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed to parties other than Ambac, except:

•As necessary to meet applicable legal requirements;

•To allow for the tabulation and certification of votes; or

•To facilitate a proxy solicitation.

How many shares must be present or represented to conduct business at the Annual Meeting?

The presence, in person or by proxy, of the holders of a majority of the voting power of Ambac’s shares of common stock outstanding as of the Record Date will constitute a quorum. Both abstentions and broker non-votes (described below) are counted for the purpose of determining the presence of a quorum.

How may I vote in the election of directors, and how many votes must the nominees receive to be elected?

With respect to the election of directors, you may:

•vote “FOR” all seven nominees for director;

•vote “FOR” some of the nominees; or

•“WITHHOLD” from voting with respect to one or more of the nominees for director.

Our directors are elected by a plurality of the shares of common stock present or represented by proxy and entitled to vote on the election of directors. This means that the seven individuals nominated for election to the Board


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who receive the most “FOR” votes among votes properly cast will be elected. Only “FOR” votes are counted in determining whether a plurality has been cast in favor of a director nominee. A “WITHHELD” vote is not considered a vote cast "FOR" or "AGAINST" a director nominee under a plurality vote standard. You cannot abstain in the election of directors and broker non-votes are not counted. Each holder of our common stock is entitled to one vote for each share held as of the Record Date. There are no cumulative voting rights associated with any of Ambac's common stock.

How may I vote for the non-binding advisory resolution regarding executive compensation, and how many votes must this proposal receive to pass?

With respect to this proposal, you may:

•vote “FOR” the approval of the non-binding resolution regarding executive compensation;

•vote “AGAINST” the approval of the non-binding resolution regarding executive compensation; or

•"ABSTAIN” from voting on the proposal.

In accordance with applicable law, this vote is “advisory,” meaning it will serve as a recommendation to our Board of Directors, but will not be binding. However, our Board of Directors and the Compensation Committee thereof will consider the outcome of the vote when making future compensation decisions for our executive officers.

How may I vote for the proposal to ratify the appointment of our independent registered public accounting firm, and how many votes must this proposal receive to pass?

With respect to this proposal, you may:

•vote “FOR” the ratification of the accounting firm;

•vote “AGAINST” the ratification of the accounting firm; or

•“ABSTAIN” from voting on the proposal.

In order to pass, the proposal must receive the affirmative vote of a majority of the votes entitled to be cast by holders of our common stock who are present in person, or by proxy at the Annual Meeting.

What are broker non-votes?

If you hold shares beneficially in street name and do not vote your shares as described in this Proxy Statement, your shares may constitute “broker non-votes.” Broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. These matters are referred to as “non-routine” matters. All of the matters scheduled to be voted on at the Annual Meeting are “non-routine,” except for the proposal to ratify the appointment of KPMG LLP as Ambac’s independent registered public accounting firm for the fiscal year ending December 31, 2022. In tabulating the voting result for any “non-routine” proposal, shares that constitute broker non-votes are not considered voting power present with respect to that proposal. Thus, broker non-votes will not affect the outcome of any “non-routine” matter being voted on at the Annual Meeting, assuming that a quorum is obtained. Abstentions are considered voting power present at the meeting and thus will have the same effect as votes against each of the matters scheduled to be voted on at the Annual Meeting (other than the election of directors).

Brokers may not vote your shares on the election of directors, certain executive compensation matters, or certain corporate governance matters in the absence of your specific instructions as to how to vote, so we encourage you to provide instructions to your broker regarding the voting of your shares.


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Who will bear the cost of soliciting votes for the Annual Meeting?

Ambac pays the entire cost of preparing, assembling, printing, mailing, and distributing the Proxy Materials and soliciting votes. If you choose to access the Proxy Materials and/or vote over the internet, you are responsible for internet access charges you may incur. If you choose to vote by phone, you are responsible for any phone charges you may incur. In addition to the mailing of these Proxy Materials, the solicitation of proxies or votes may be made in person, by telephone, or by electronic communication by our directors, officers, and employees, who will not receive any additional compensation for such solicitation activities.

What happens if additional matters are presented at the Annual Meeting?

Other than the three items of business described in this Proxy Statement, we are not aware of any other business to be acted upon at the Annual Meeting. If you grant a proxy, the persons named as proxy holders, Stephen M. Ksenak or William J. White, will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. If for any reason, any of the nominees for director included in this Proxy Statement is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board of Directors.

Where can I find the voting results of the Annual Meeting?

We will announce preliminary voting results at the Annual Meeting and publish final voting results in the Annual Meeting of Stockholders section of our Investor Relations website at http://ir.ambac.com. We will also disclose the final voting results on a Current Report on Form 8-K filed with the SEC within four business days following the date on which the Annual Meeting concludes.

Participating in the Annual Meeting

How can I participate in the Annual Meeting?

We are conducting a virtual Annual Meeting so our stockholders can participate from any geographic location with Internet connectivity. Participation opportunities are reasonably comparable to those provided at the in-person portion of our past meetings.We have structured our virtual meeting to provide stockholders the same rights as if the meeting were held in person, including the ability to vote shares electronically during the meeting and ask questions in accordance with the rules of conduct for the meeting.

•To participate in the Annual Meeting, including to vote and to view the list of registered stockholders as of the record date during the meeting, you must access the meeting website at www.virtualshareholdermeeting.com/AMBC2022 and enter the 16-digit control number found on the Notice of Internet Availability of Proxy Materials or on the proxy card or voting instruction form provided to you with this Proxy Statement.

•Whether or not you plan to participate in the virtual Annual Meeting, it is important that your shares be represented and voted. We encourage you to access www.proxyvote.com or call 1-800-690-6903 and vote in advance of the Annual Meeting.

•Stockholders are able to submit questions for the Annual Meeting’s question and answer session during the meeting through www.virtualshareholdermeeting.com/AMBC2022. We will respond as practical to questions during the meeting. Additional information regarding the rules and procedures for participating in the Annual Meeting will be set forth in our meeting rules of conduct, which stockholders can view during the meeting at the meeting website or during the ten days prior to the meeting at www.proxyvote.com.

•We encourage you to access the Annual Meeting before it begins. Online check-in will be available at www.virtualshareholdermeeting.com/AMBC2022 approximately 15 minutes before the meeting starts on May 24, 2022. If you have difficulty accessing the meeting, please call 800-586-1548 (toll free) or 303-562-9288 (international). We will have technicians available to assist you.


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Do directors attend the Annual Meeting?

It is currently expected that all of our continuing directors will participate in the virtual Annual Meeting of Stockholders. All of our directors who were on the Board last year participated in the virtual 2021 Annual Meeting of Stockholders.

How can I find out if I am a stockholder of record entitled to vote?

A complete list of stockholders of record entitled to vote at the Annual Meeting will be available at the Annual Meeting as described above and for a period of at least ten days before the Annual Meeting will be available for inspection by stockholders of record during ordinary business hours at our principal executive offices at One World Trade Center, New York, New York 10007.

Other Questions Related to the Meeting or Ambac

Who will serve as inspector of elections?

The inspectors of election will be representatives from Broadridge Financial Solutions, Inc.

How can I contact Ambac’s transfer agent?

Contact our transfer agent by either writing to Computershare Inc., PO Box 505000, Louisville, KY 40233, or 462 South 4th Street, Suite 1600, Louisville, KY 40202, by telephoning 1-800-662-7232 or via the web at www.computershare.com/investor.

Whom should I call if I have any questions?

If you have any questions about the Annual Meeting or voting, please contact William J. White, Corporate Secretary, at (212) 658-7456 or by email at corporatesecretary@ambac.com. If you have any questions about your investment in Ambac common stock, please contact Ambac's Investor Relations department at (212) 208-3177 or by email at ir@ambac.com.

How can a stockholder communicate directly with our Board?

Stockholders and other interested parties may communicate with Ambac’s Board by writing to Ambac’s Corporate Secretary at Ambac Financial Group, Inc., One World Trade Center, New York, New York 10007 or by sending an email to Ambac’s Corporate Secretary at corporatesecretary@ambac.com. Ambac’s Corporate Secretary will then forward your questions or comments directly to the Board.

Please note that material that is directly or indirectly hostile or threatening, illegal or otherwise unsuitable will not be forwarded to our Board. Any communication that is relevant to Ambac’s business and is not forwarded will be retained for one year and will be made available to our independent directors on request. The independent directors grant the Corporate Secretary discretion to decide what correspondence shall be shared with Ambac management and specifically instruct that any personal employee complaints be forwarded to our Human Resources Department.

What is the deadline to propose actions for consideration at next year’s Annual Meeting of Stockholders or to nominate individuals to serve as directors?

For Stockholder Proposals that are to be included in our Proxy Statement under Rule 14a-8. Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (“Exchange Act”), if a stockholder wants Ambac to include a proposal in our proxy statement and form of proxy for presentation at our 2023 Annual Meeting of Stockholders (other than a proposal relating to the nomination of a specific individual for election to our Board of Directors), the proposal must be received by us at our principal executive offices at One World Trade Center, New York, New York 10007, not later than December 16, 2022. The proposal must be sent to the attention of our Corporate Secretary, and must comply with the requirements of Regulation 14A under the Exchange Act (including, but not limited to, Rule 14a-8 or its successor provision).


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Other Proposals and Nominations. Our by-laws govern the submission of nominations for director or other business proposals that a stockholder wishes to have considered at a meeting of stockholders, but which are not included in our proxy statement for that meeting. Under our by-laws, nominations for director or other business proposals to be addressed at our next annual meeting in 2023 may be made by a stockholder entitled to vote who has delivered a notice to the Corporate Secretary of Ambac Financial Group, Inc. no later than the close of business on March 25, 2023, and not earlier than February 23, 2023, except if the date of our next annual meeting is not within 30 days before or after the anniversary of our 2022 Annual Meeting of Stockholders, such notice must be delivered no earlier than the 90th day before our 2023 Annual Meeting of Stockholders and no later than the later of the 60th day before our 2023 Annual Meeting of Stockholders and the 15th day following the day on which public announcement of the date of our 2023 Annual Meeting of Stockholders is first made by the Company. The notice must set forth and describe the information required by Article II of our by-laws.

These advance notice and information requirements are in addition to, and separate from, the requirements that a stockholder must meet in order to have a proposal included in our proxy statement under the rules of the SEC. A proxy granted by a stockholder will give discretionary authority to the proxies to vote on any matters introduced pursuant to the above-referenced by-law provisions, subject to applicable rules of the SEC.

INCORPORATION BY REFERENCE

To the extent that this Proxy Statement has been or will be specifically incorporated by reference into any other filing of Ambac under the Securities Act of 1933, as amended, or the Exchange Act, the sections of this Proxy Statement entitled “Report of the Audit Committee” (to the extent permitted by the rules of the SEC) shall not be deemed to be so incorporated, unless specifically provided otherwise in such filing.


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DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Board of Directors

The Board oversees the business of Ambac and monitors the performance of management. Addressing the issues and the challenges confronting our largest operating subsidiary, AAC, a financial guarantee insurance company in run-off, as well as overseeing Ambac's expansion into new businesses in specialty property and casualty insurance, managing general agency/underwriting and potentially other insurance related businesses requires a high level of focus, time commitment and engagement from our directors. The Board meets approximately five times per year in regularly scheduled meetings, but will meet more often, if necessary. The Board met twelve times in 2021. Outside of formal meetings, directors frequently engage with management concerning Ambac’s business and strategies. In 2021, each director attended at least 82% of the total number of meetings of the Board and any committees on which he or she served. All of our current directors also serve as directors of AAC, which involves different work streams and considerations than their directorships at AFG.

Directors

The names of our directors and their ages, positions, and biographies are set forth below. There are no family relationships among any of our directors or executive officers.

Committee Membership

Name

Director Since

Age

Independent

Audit

Compensation

Governance and Nominating

Strategy

Ian D. Haft

2016

l è

Director

David L. Herzog

2016

q è

Director

Lisa G. Iglesias

2021

l è

Director

Joan Lamm-Tennant

2018

Director

Claude LeBlanc

2017

President and Chief Executive Officer and Director

C. James Prieur

2016

l è

Director

Jeffrey S. Stein

2013

Chairman of the Board

q Chairman l Member è Audit Committee Financial Expert


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Our Board of Directors is currently comprised of individuals with diverse skill sets, which is necessary in light of the unique nature of Ambac’s business. Two of our directors self-identify as women; five of our directors self-identify as men; and one of our directors self-identifies as Hispanic.

CEO

Experience

CFO

Experience

Insurance

Expertise

Risk

Management

Investment

Experience

Restructuring

Expertise

Ian D. Haft

David L. Herzog

Lisa G. Iglesias

Joan Lamm-Tennant

Claude LeBlanc

C. James Prieur

Jeffrey S. Stein

Ian D. Haft

Mr. Haft has been a director since March 28, 2016. He is the Managing Partner and Chief Executive Officer of Surgis Capital LLC, an investment manager and consulting firm he founded in 2018. He is also the Chief Financial Officer of Electric Monster Media, Inc., a digital media company focused on acquiring, optimizing and operating digital content properties. From 2009 until 2017, Mr. Haft was a founding partner and Vice President and Secretary of Cornwall Capital Management LP (“Cornwall”), an investment manager. At Cornwall, Mr. Haft previously held the positions of Chief Financial Officer (until November 2011) and Chief Operating Officer and Chief Compliance Officer (until the end of 2015). Mr. Haft was also a member of Cornwall GP, LLC, the general partner of Cornwall Master LP. Prior to joining Cornwall, Mr. Haft was a Principal at GenNx360 Capital Partners, a private equity fund, from 2008 to 2009. From 2002 to 2008, Mr. Haft was a Senior Associate and then Vice President (from 2004) at ACI Capital Co., LLC, where he focused on middle market leveraged buyouts and growth equity investments on behalf of two private equity funds. Mr. Haft began his career at The Boston Consulting Group in 1993 and was also employed by Merrill Lynch & Co. and The Blackstone Group prior to joining ACI Capital in 2002. Mr. Haft served as member of the board of directors of Keweenaw Land Association from 2018 until 2021. Mr. Haft graduated magna cum laude with a BA in economics and mathematics from Dartmouth College in 1993 and he received his JD and MBA from Columbia University in 2000. Mr. Haft has extensive experience working with companies of all sizes and identifying, understanding and utilizing areas of value creation.

Experience, Qualifications and Skills:

Mr. Haft has over twenty years of experience working in alternative asset management, investment banking and management consulting and has served on the boards of three public companies and nine private companies. Through this experience, he has developed strong capabilities in business strategy, strategic analysis of industries and companies, mergers and acquisitions, valuation, debt and equity financing, derivatives and hedging, financial controls and regulatory compliance. Mr. Haft’s background and experience make him well-qualified to serve on our Board of Directors and to serve on its Audit Committee and Compensation Committee, and to chair the Strategy Committee.

David L. Herzog

Mr. Herzog has been a director since March 28, 2016. He was the Chief Financial Officer and Executive Vice President of AIG from October 2008 until his retirement from AIG in April 2016. Mr. Herzog served as Senior Vice President and Comptroller of AIG from June 2005 to October 2008, Chief Financial Officer for worldwide life insurance operations from April 2004 to June 2005 and Vice President, Life Insurance from 2003 to 2004. In addition, Mr. Herzog has served in other senior officer positions for AIG and its subsidiaries, including as the Chief Financial Officer and Chief Operating Officer of American General Life following its acquisition by AIG.


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Previously, Mr. Herzog served in various executive positions at GenAmerica Corporation and Family Guardian Life, a Citicorp Company, and at a large accounting firm that is now part of PricewaterhouseCoopers. Mr. Herzog currently serves as a member of the Board of Directors of MetLife, Inc., DXC Technology and PCCW Ltd. Mr. Herzog received a bachelor's degree in accounting from the University of Missouri-Columbia and a master of business administration in finance and economics from the University of Chicago. In addition, Mr. Herzog holds the designations of Certified Public Accountant, a Fellow in the National Association of Corporate Directors and Fellow, Life Management Institute.

Experience, Qualifications and Skills:

Mr. Herzog was a key member of the AIG restructuring teams that orchestrated the repayment of US Government support provided following the 2008 financial crisis, and the repositioning of AIG’s debt capital structure. Mr. Herzog's financial and management experience in the oversight of AIG and its subsidiaries make him well qualified to serve on our Board of Directors and its Strategy Committee and to chair the Audit Committee.

Lisa G. Iglesias

Ms. Iglesias has been a director of AFG and AAC since August 4, 2021. She is currently the Executive Vice President, General Counsel of Unum Group, a position she has held since January 2015. As the General Counsel of Unum Group, Ms. Iglesias has overall responsibility for the legal affairs of Unum, and heads a team of lawyers handling transactions, finance and investments, SEC reporting, corporate governance, regulatory matters and relationships, compliance and complex litigation. She also oversees the company’s Enterprise Audit and Corporate Services functions. Prior to joining Unum Group, Ms. Iglesias served as Senior Vice President, General Counsel and Secretary of WellCare Health Plans, Inc., a managed care company, from February 2012 to December 2014, having first joined WellCare in February 2010 as Vice President, Securities and Assistant General Counsel. Prior to that, she served as General Counsel and Corporate Secretary for Nordstrom, Inc., a fashion specialty retailer, from 2007 to 2008, and as General Counsel and Secretary of Spherion Corporation, a recruiting and staffing company, from 1999 to 2007. Earlier in her career Ms. Iglesias was an SEC and Mergers & Acquisitions attorney with the law firm of Greenberg Traurig from 1994 to 1998 and a tax CPA with KPMG Peat Marwick from 1989 to 1991. Ms. Iglesias serves on the board of the Public Education Foundation of Chattanooga, Tennessee. Ms. Iglesias received her bachelor’s and master’s degrees in accounting from the University of South Florida, and her law degree from the University of Miami. Honors and awards include being named in Latino Leaders magazine as one of the Top Latinos in Corporate America in 2020 and one of the Top Latino Lawyers in 2018. In 2014 Ms. Iglesias was named one of the Top Women Legal officers in Corporate Counsel magazine.

Experience, Qualifications and Skills:

Ms. Iglesias has over twenty-five years of experience in finance and investments, risk management, corporate governance, regulatory matters, compliance, privacy, government affairs and litigation. Ms. Iglesias’ legal, finance and risk management experience make her well-qualified to serve on our Board of Directors and its Audit Committee.

Joan Lamm-Tennant

Ms. Lamm-Tennant has been a director since March 1, 2018. She is the independent Chair of the Boards of Directors of Equitable Holdings, Inc. and AllianceBernstein Holdings L.P. Ms. Lamm-Tennant was the Founder of Blue Marble Microinsurance, and from January 2016 to June 2020 served as its Chief Executive Officer. Blue Marble Microinsurance is a corporation formed by a consortium of eight insurance entities for the purpose of developing service ventures enabling the insurers to enter the microinsurance market. Previously, Ms. Lamm-Tennant was the Global Chief Economist and Risk Strategist of Guy Carpenter & Company, LLC, the reinsurance and risk advisory operating company of Marsh & McLennan Companies. Prior to joining Guy Carpenter in 2007, Ms. Lamm-Tennant was the founding President of General Reinsurance Capital Consultants. She was an Adjunct Professor at the Wharton School, University of Pennsylvania from September 2005 to May 2016 and held the Laurence and Susan Hirsch Chair in International Business. Ms. Lamm-Tennant was a tenured Professor at


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Villanova from September 1989 to May 2000 and was awarded the Thomas Labrecque Chair Professorship in Business in 1999. She currently serves on the Board of Equitable Holdings, Inc., AllianceBernstein Holdings L.P., and Element Fleet Management Corp. Ms. Lamm-Tennant is the Executive Expert on Resilience and Sustainability for the International Insurance Society and author / commentator on environment, social and governance (ESG) matters. She holds a Ph.D. in Finance and Investments from the University of Texas, Austin; an M.B.A. in Finance from St. Mary's University, San Antonio, Texas and a B.B.A. with Honors in Accounting from St. Mary's University, San Antonio, Texas.

Experience, Qualifications and Skills:

Ms. Lamm-Tennant has over thirty years of finance, and risk management experience in the insurance industry. She served as a risk strategist for Marsh & McLennan and formalized the enterprise wide risk oversight function resulting in the appointment of a Chief Risk Officer and a dedicated Board Risk Committee. Her expertise in emerging market strategy, enterprise risk modeling, implementation of risk-based decision processes and high value strategies resulting in capital efficiencies and profitable growth make her well-qualified to serve on our Board of Directors and its Compensation Committee and Strategy Committee, and to chair the Governance and Nominating Committee.

Claude LeBlanc

Mr. LeBlanc has served as President and Chief Executive Officer, and director of Ambac Financial Group, Inc. and Ambac Assurance Corporation since January 1, 2017. In this role Mr. LeBlanc is responsible for providing strategic leadership and oversight with regard to Ambac’s strategic priorities and vision with a view towards creating long-term stockholder value. Mr. LeBlanc is also responsible for all day-to-day management decisions and for ensuring the execution of the Company’s short and long term plans. In 2018, Mr. LeBlanc led Ambac through a holistic, transformational restructuring transaction that culminated in the exit of AAC's Segregated Account from rehabilitation and in 2020, materially advanced the Company' new business specialty program insurance platform with the establishment of the Everspan Group of companies and the acquisition of Xchange Affinity Underwriting Agency, LLC and Xchange Benefits, LLC. Previously, Mr. LeBlanc was the Chief Financial Officer and Chief Restructuring Officer of Syncora Holdings Ltd., from 2010 until December 24, 2016. Mr. LeBlanc joined Syncora in 2006 as Executive Vice President and was responsible for all corporate development activities, strategic development, capital planning, and management of key bank and rating agency relationships. Prior to joining Syncora, Mr. LeBlanc served as Senior Vice President of Corporate Development and Strategy and as a member of the executive management group for XL Capital Ltd. In this role, he led various global corporate development initiatives, oversaw and managed significant capital market transactions, and, reporting to the Chief Financial Officer and Chief of Staff, was responsible for global strategy development and capital management. Prior to joining XL Capital in 2002, he served as Chief Operating Officer and a member of the executive management team for Transworld Network International, a North American telecommunications group where he led corporate development, financial planning, and certain business operations. Mr. LeBlanc began his career in 1991 at PricewaterhouseCoopers and later served as Vice President of Financial Advisory Services in 1997 when he advised on mergers and acquisitions, corporate restructurings, and transaction advisory. Mr LeBlanc previously served as a director on the Board of Maiden Holdings, Ltd. until May 2021. Mr. LeBlanc holds a BA in Economics from York University, a BComm from the University of Windsor and an MBA from the Schulich School of Business. He is a Chartered Accountant and Certified Public Accountant.

Experience, Qualifications and Skills:

Mr. LeBlanc has thirty years of experience in the financial services sector and over that period has held a number of senior leadership roles overseeing strategy, corporate development, finance and risk. Immediately prior to joining Ambac, Mr. LeBlanc actively led global remediation and asset recovery initiatives at Syncora Holdings Ltd., evaluating strategic alternatives and overseeing all aspects of Syncora's finance function. He also served as Special Advisor to Syncora’s Board of Directors and led the successful restructuring of Syncora during the


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2008-2009 financial crisis and again in its 2016 restructuring. Mr. LeBlanc's extensive experience in financial services and insurance makes him a valued member of our Board of Directors.

C. James Prieur

Mr. Prieur has been a director since January 5, 2016. Mr. Prieur has over thirty years of finance, investment management, risk management, and international business experience. Mr. Prieur served as Chief Executive Officer and director of CNO Financial Group, Inc. from 2006 until his retirement in 2011. CNO Financial Group is a life insurance holding company focused on the senior middle income market in the U.S. Prior to joining CNO Financial Group, Mr. Prieur had been with Sun Life Financial since 1979. He began his career at Sun Life Financial in investments, and in 1997 he was named Senior Vice President and General Manager for U.S. operations, and became corporate President and Chief Operating Officer in 1999, a position Mr. Prieur occupied until he left Sun Life Financial to join CNO Financial Group. While at Sun Life Financial, Mr. Prieur managed multiple lines of business, including life, annuities, and health products in the United States, Canada, the United Kingdom and Asia. Mr. Prieur is currently a director of Manulife Financial Corporation. Mr. Prieur is a Chartered Financial Analyst and has a BA from the Royal Military College and a MBA from Western University in Ontario.

Experience, Qualifications and Skills:

Mr. Prieur has over thirty years of finance, investment management, risk management, and international business experience in the insurance industry. He brings a very useful C-suite perspective into the Board room. Mr. Prieur’s experience as a former Chief Executive Officer of CNO Financial Group, Inc. and his knowledge of the insurance industry are highly valued by the Board and management. This background, as well as his financial expertise and other board experience, makes Mr. Prieur well qualified to serve on our Board of Directors and its Audit Committee and Governance and Nominating Committee, and to chair its Compensation Committee.

Jeffrey S. Stein

Mr. Stein has been Chairman of the Board since January 1, 2015 and has served as a director since May 1, 2013. Mr. Stein is Founder and Managing Partner of Stein Advisors LLC, a financial advisory firm that provides consulting services to public and private companies and institutional investors. Mr. Stein provides the perspective of a successful investment professional with over twenty-nine years of experience in both debt and equity asset classes. Mr. Stein has substantial experience investing in the financial services industry. Previously, Mr. Stein was a Co-Founder and Principal of Durham Asset Management LLC, a global event-driven distressed debt and special situations equity asset management firm. From January 2003 through December 2009, Mr. Stein served as Co-Director of Research at Durham responsible for the identification, evaluation and management of investments for the various Durham portfolios. From July 1997 to December 2002 Mr. Stein served as Co-Director of Research at The Delaware Bay Company, Inc., a boutique research and investment banking firm focused on the distressed debt and special situations equity asset classes. From September 1991 to August 1995, Mr. Stein was an Associate and Assistant Vice President at Shearson Lehman Brothers in the Capital Preservation & Restructuring Group. Mr. Stein currently serves as a director on the board of Intelsat Connect Finance S.A. and as a board observer on the Board of TORM plc. Mr. Stein previously served as a director on the Boards of Dynegy Inc., NMC Health plc, and Westmoreland Coal Company. Mr. Stein received a B.A. in Economics from Brandeis University and an M.B.A. with Honors in Finance and Accounting from New York University.

Experience, Qualifications and Skills:

Mr. Stein is an accomplished corporate executive and director, including leadership and committee positions, of both public and private companies, who has substantial experience investing in the financial services industry. Mr. Stein has served as an Executive Chairman, Chief Restructuring Officer and Liquidating Trustee and as a director on audit, compensation, corporate governance, finance, restructuring and risk committees (including as Chairman of those committees). In his capacity as a corporate executive and director, Mr Stein has specifically focused on capital allocation, operating and financial performance, capital structure optimization, asset


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acquisitions and dispositions, corporate strategy, risk management and investor communications. As a result Mr. Stein has a wealth of knowledge with respect to the financial, institutional and risk management issues currently facing Ambac. His breadth of experience makes Mr. Stein well qualified to be Chairman of our Board, and to serve on the Governance and Nominating Committee.

Board Leadership Structure

The Board does not have a policy on whether or not the roles of Chief Executive Officer and Board Chair should be separate and, if they are to be separate, whether the Chair should be selected from the non-employee directors, an employee or an outsider. The Board believes that it should be free to make this choice in the manner that it deems best for Ambac at any given point in time. While the Board has no fixed policy with respect to combining or separating the offices of Board Chair and Chief Executive Officer, those two positions have been held by separate individuals for the last several years, with the position of Chair of the Board currently being filled by Mr. Stein and the position Chief Executive Officer by Mr. LeBlanc. The Board believes this is the appropriate leadership structure for it at this time.

A majority of our directors are independent, and the Board believes that the independent directors provide effective oversight of management. See “Director Independence.”

Board Committees

The current members of each of the committees of the Board, as well as the current Chairman of each of the committees of the Board, are identified in the following paragraphs. Each of the standing committees operates under a written charter adopted by the Board, which is available in the Corporate Governance section of our Investor Relations website: https://ambac.com/investor-relations/governance/governance-documents/default.aspx. A copy of each charter is also available to stockholders free of charge on request to our Corporate Secretary, at corporatesecretary@ambac.com.

Audit Committee

The Audit Committee is currently comprised of Messrs. Haft, Herzog (Chairman) and Prieur, and Ms. Iglesias. The main function of our Audit Committee is to oversee our accounting and financial reporting processes. The Audit Committee’s responsibilities include:

• Appointing, compensating, retaining, and overseeing the work performed by our independent registered public accounting firm's engagement.

• Approving the audit, non-audit and tax services to be performed by our independent registered public accounting firm.

• Evaluating the experience, performance, qualifications, and independence of our independent registered public accounting firm.

•Reviewing the activities and organizational structure of the internal audit function, as well as the qualifications of its personnel.

• Reviewing the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters.

• Reviewing with management the design, operation and effectiveness of our internal controls over financial reporting and our critical accounting policies.

• Reviewing with management our annual audited financial statements, quarterly financial statements, earnings releases and any other material press releases related to accounting or financial matters announcements.


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•Reviewing with management our major financial risk exposures and the steps that management has taken to monitor and control such exposures.

• Reviewing and approving the Audit Committee report for inclusion in our annual proxy statement.

• Reviewing our Regulation FD Policy.

• Establishing procedures for the confidential and anonymous receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters.

Our Board has determined that each of the directors serving on our Audit Committee is independent within the meaning of the Listing Rules of New York Stock Exchange ("NYSE"). The Board of Directors has determined that, based on each member’s professional qualifications and experience, each of the members of the Audit Committee are financially literate and that Messrs. Haft, Herzog and Prieur and Ms. Iglesias qualify as "audit committee financial experts" as defined under the rules and regulations of the SEC. The Audit Committee regularly meets in executive session with both our independent registered public accounting firm, and internal audit, without Ambac management present. The Audit Committee met six times in 2021.

Compensation Committee

The Compensation Committee is currently comprised of Messrs. Prieur (Chairman) and Haft and Ms. Lamm-Tennant. The purpose of our Compensation Committee is to assist the Board in overseeing our compensation programs. The Compensation Committee’s responsibilities include:

• Reviewing the overall compensation principles governing the compensation and benefits of our executive officers and other employees.

• Evaluating the performance of our Chief Executive Officer.

• Reviewing the procedures for the evaluation of our executive officers, other than our Chief Executive Officer.

• Reviewing and approving the selection of our peer companies to use as a reference in determining competitive compensation packages.

• Determining all executive officer compensation (including but not limited to salary, bonus, incentive compensation, equity awards, benefits and perquisites).

• Reviewing and approving the terms of any employment agreements and severance arrangements, change-in-control agreements, and any special or supplemental compensation and benefits for our executive officers and individuals who formerly served as executive officers.

• Acting as the administering committee for our stock and bonus plans and for any equity compensation arrangements that may be adopted by Ambac from time to time.

• Reviewing and discussing with management the annual Compensation Discussion and Analysis (CD&A) disclosure, and, based on this review and discussion, making a recommendation to include the CD&A disclosure in our annual proxy statement.

• Preparing the annual Compensation Committee Report for inclusion in our annual proxy statement.

Each member of our Compensation Committee is a “non-employee” director within the meaning of Rule 16b-3 of the Exchange Act. Our Board of Directors has determined that each of the directors serving on our Compensation Committee is independent within the meaning of the Listing Rules of NYSE. The Compensation Committee met seven times in 2021.

In 2021, the Compensation Committee directly engaged Meridian Compensation Partners, LLC, a nationally recognized independent compensation consulting firm, to assist it with benchmarking and compensation analyses, as well as to provide information and advice on executive compensation practices and determinations, including


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information on award design for both our Short Term Incentive Plan (“STIP”) and Long Term Incentive Plan (“LTIP”).

From time to time, our Chief Executive Officer will attend meetings of the Compensation Committee and express his view on the Company’s overall compensation philosophy. Following year-end, the Chief Executive Officer makes recommendations to the Compensation Committee as to the total compensation package (salary, and STIP and LTIP awards) to be paid to each of our executive officers.

Our Chief of Staff serves as management’s main liaison with the Compensation Committee and assists the Compensation Committee Chairman in setting the agenda and gathering the requested supporting material for each Compensation Committee meeting. Our Corporate Secretary serves as secretary to the Compensation Committee.

Governance and Nominating Committee

The Governance and Nominating Committee is currently comprised of Ms. Lamm-Tennant (Chair), and Messrs. Prieur and Stein. Our Governance and Nominating Committee’s purpose is to assist our Board of Directors in identifying individuals qualified to become members of our Board of Directors based on criteria set by our Board of Directors, to oversee the evaluation of the Board of Directors and management, and to develop and update our corporate governance principles. The Governance and Nominating Committee’s responsibilities include:

• Evaluating the composition, size, organization, and governance of our Board of Directors and its committees, determining future requirements, and making recommendations regarding future planning, the appointment of directors to our committees, and the selection of chairs of these committees.

• Periodically reviewing the standards for director independence and providing the Board with an assessment of which directors should be deemed independent.

• Determining the criteria for Board membership, including the need for both gender and ethnic diversity.

• Overseeing policies and practices relating to environmental, social, and governance (“ESG”) matters relevant to the Company.

• Overseeing the process for the self-evaluation of the Board and its committees.

• Reviewing and recommending to our Board of Directors the compensation of our non-employee directors.

• Reviewing plans for the succession of our executive officers.

• Reviewing and approving related party transactions according to our Related Party Transaction Policy.

• Administering a procedure to consider stockholder recommendations for director nominees.

• Evaluating and recommending candidates for election or re-election to our Board of Directors, including nominees recommended by stockholders.

• Reviewing periodically Ambac’s Code of Business Conduct and compliance therewith.

Our Board of Directors has determined that each of the directors serving on our Governance and Nominating Committee is independent within the meaning of the Listing Rules of NYSE. The Governance and Nominating Committee met five times in 2021.


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SEC Form DEF 14A filed by Ambac Financial Group Inc.