SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 11-K
|
x
|
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended December 31, 2009
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
to
Commission File Number: 1-10777
|
|
A.
|
Full title of the plan and the address of the plan, if different from that of the issuer named below:
|
Ambac Financial Group, Inc.
Savings Incentive Plan
|
|
B.
|
Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
|
Ambac Financial Group, Inc.
One State Street Plaza
New York, New York 10004
AMBAC FINANCIAL GROUP, INC.
SAVINGS INCENTIVE PLAN
Financial Statements and Supplemental Schedule
December 31, 2009 and 2008
(With Report of Independent Registered Public Accounting Firm Thereon)
Ambac Financial Group, Inc.
Savings Incentive Plan
INDEX
PAGE
Report of Independent Registered Public Accounting Firm
The Administrator
Ambac
Financial Group, Inc. Savings Incentive Plan:
We have audited the accompanying statements of net assets available for plan benefits of the
Ambac Financial Group, Inc. Savings Incentive Plan (the Plan) as of December 31, 2009 and 2008, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the
responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available
for plan benefits of the Plan as of December 31, 2009 and 2008, and the changes in net assets available for plan benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.
The Plan’s financial statements have been prepared assuming that the Plan will continue as a going concern. As discussed in note 1 to the financial
statements, Ambac Financial Group, Inc., the Plan’s sponsor, has concluded that there is a substantial doubt about their ability to continue as a going concern as a result of uncertainties associated with the ability to generate new insurance
business as well as limited liquidity. Management’s plans in regard to these matters are also described in note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedule H,
line 4i – schedule of assets (held at end of year) as of December 31, 2009 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by
the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule
has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ KPMG LLP
New York, New York
June 29, 2010
Ambac Financial Group, Inc.
Savings Incentive Plan
Statements of Net Assets Available for Plan Benefits
December 31, 2009 and 2008
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
2008
|
|
Assets:
|
|
|
|
|
|
|
|
Investments, at fair value (see note 3):
|
|
|
|
|
|
|
|
Ambac Financial Group, Inc. Stock Fund
|
|
$
|
757,054
|
|
$
|
1,253,438
|
|
Mutual funds
|
|
|
63,642,260
|
|
|
54,448,764
|
|
Loans to participants
|
|
|
790,295
|
|
|
917,471
|
|
|
|
|
|
|
|
|
|
Total investments
|
|
|
65,189,609
|
|
|
56,619,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables:
|
|
|
|
|
|
|
|
Employer contributions receivable (see note 1(c))
|
|
|
2,630,787
|
|
|
810,569
|
|
Participant contributions receivable
|
|
|
109,307
|
|
|
135,569
|
|
|
|
|
|
|
|
|
|
Total receivables
|
|
|
2,740,094
|
|
|
946,138
|
|
|
|
|
|
|
|
|
|
Net assets available for plan benefits
|
|
$
|
67,929,703
|
|
$
|
57,565,811
|
|
|
|
|
|
|
|
|
See accompanying notes to the financial statements
3
Ambac Financial Group, Inc.
Savings Incentive Plan
Statements of Changes in Net Assets Available for Plan Benefits
For the years ended December 31, 2009 and 2008
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
2008
|
|
|
Investment Income (Loss) :
|
|
|
|
|
|
|
|
|
Dividends
|
|
$
|
1,331,065
|
|
$
|
2,247,086
|
|
|
Interest on participant loans
|
|
|
44,865
|
|
|
52,240
|
|
|
Net appreciation (depreciation) in fair value of investments (see note 3)
|
|
|
8,854,512
|
|
|
(31,838,355
|
)
|
|
|
|
|
|
|
|
|
|
|
Total net investment income (loss)
|
|
|
10,230,442
|
|
|
(29,539,029
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions:
|
|
|
|
|
|
|
|
|
Employer contributions
|
|
|
4,433,593
|
|
|
4,499,022
|
|
|
Participant contributions
|
|
|
3,086,559
|
|
|
3,323,641
|
|
|
Rollovers
|
|
|
141,673
|
|
|
93,830
|
|
|
|
|
|
|
|
|
|
|
|
Total contributions and other additions
|
|
|
7,661,825
|
|
|
7,916,493
|
|
|
|
|
|
|
|
|
|
|
|
Total additions (reductions)
|
|
|
17,892,267
|
|
|
(21,622,536
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deductions from net assets attributed to:
|
|
|
|
|
|
|
|
|
Benefit payments
|
|
|
7,526,875
|
|
|
6,704,460
|
|
|
Administrative expenses
|
|
|
1,500
|
|
|
3,054
|
|
|
|
|
|
|
|
|
|
|
|
Total deductions
|
|
|
7,528,375
|
|
|
6,707,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets available for plan benefits
|
|
|
10,363,892
|
|
|
(28,330,050
|
)
|
|
|
|
|
|
Net assets available for plan benefits:
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
57,565,811
|
|
|
85,895,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of year
|
|
$
|
67,929,703
|
|
$
|
57,565,811
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the financial statements
4
AMBAC FINANCIAL GROUP, INC
SAVINGS INCENTIVE PLAN
Notes to Financial Statements
December 31, 2009 and 2008
|
(1)
|
Description of the Plan
|
The following description of the Ambac Financial Group, Inc. Savings Incentive Plan (the “Plan”) provides only general
information. Participants should refer to the Summary Plan Description or Plan document for more complete information of the Plan’s provisions.
The Plan
is a defined contribution plan covering all employees of Ambac Financial Group, Inc. (“Ambac”), and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended. Ambac is the Plan
sponsor. The assets of the Plan are managed by an affiliate of Vanguard Fiduciary Trust Company (“Vanguard”), who serves as trustee of the Plan.
The Plan is a program designed to encourage long-term savings by eligible employees of Ambac. These savings are achieved through a
systematic program of salary deferrals. The employee’s salary is reduced by the amount elected to be saved on a pre-tax basis. The pre-tax “deferred” part of the employee’s salary is not taxable to the employee until
distribution, unless such distribution is to another eligible retirement plan.
As a result of uncertainties associated with
Ambac such as its ability to generate new insurance business, limited liquidity, and the constraints imposed upon Ambac’s subsidiary, Ambac Assurance, by the covenants made for the benefit of the Segregated Account, Ambac’s management has
concluded that there is substantial doubt about the ability of Ambac to continue as a going concern. As a result, Ambac may consider, among other things, raising additional capital to the extent possible, a negotiated restructuring of its
outstanding debt through a prepackaged bankruptcy proceeding or a bankruptcy without agreement, concerning a plan of reorganization with major creditor groups. No assurance can be given that Ambac will be successful in executing any of these
strategies. Notwithstanding the outcome at Ambac, management expects to be able to administer the Plan in the foreseeable future.
|
|
(b)
|
Eligibility and Participation
|
All employees of Ambac who have completed at least six months of service in which the employee is credited with at least 500 hours of
service are eligible to participate in the Plan. An enrollment packet is provided in advance of the earliest date on which an employee may elect to begin participation in the Plan. Once an employee completes the Plan’s service requirement, the
employee’s account is credited from the service date forward, with the eligible Basic, Supplemental and Discretionary Profit–Sharing Contributions discussed in Note 1(c). An employee must, however, make an affirmative election to make
pre-tax contributions and catch-up contributions, when eligible, to qualify for any employer matching contributions to the Plan.
5
AMBAC FINANCIAL GROUP, INC
SAVINGS INCENTIVE PLAN
Notes to Financial Statements
December 31, 2009 and 2008
(1), Continued
Each current employee participant in the Plan may direct Ambac to defer on a pre-tax basis a certain percentage of his or her
compensation. Employee contributions are accrued when deducted from employee pay and are invested after receipt by the trustee. Eligible participants age 50 or over may also elect additional catch-up contributions subject to the dollar limits in the
Economic Growth and Tax Relief Reconciliation Act (“EGTRRA”) of 2001. These catch-up contributions are not matched by Ambac. Employees may contribute to the Plan up to 20% of base compensation. The maximum annual contribution is $16,500
and $15,500 for 2009 and 2008, respectively. Ambac makes an employer matching contribution of 100% of the employee’s contributions up to 6% of such participants’ base compensation, subject to limits set by the Internal Revenue Code. Ambac
may also make a Basic Profit Sharing contribution of 3% of base compensation and a Supplemental Profit Sharing contribution of an additional 3% of base compensation in the subsequent year to eligible employees. Additionally, Ambac may make a
Discretionary Profit Sharing contribution equal to an amount determined by Ambac, in its sole discretion, for the taxable year with or within which the applicable Plan year ends. Ambac made contributions of $2,563,990 and $2,557,045 for 2009 and
2008, respectively, for its Basic and Supplemental Profit Sharing Contribution in each respective year. No Discretionary Profit Sharing contributions were made for Plan year 2009 or 2008. All contributions are invested as directed by the
participant.
Each participant’s account is credited with the participant’s contribution and allocation of (a) Ambac’s
contributions, and (b) Plan earnings or losses. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. A participant’s earnings or losses are based upon the proportion
contributed to the participant’s chosen investments.
Participants are immediately vested in all contributions plus actual earnings or losses thereon.
On termination of employment, retirement, total and permanent disability, or death, a participant or
participant’s beneficiary may elect to receive an immediate lump-sum amount equal to the value of his or her account, or may elect to defer receipt of such lump sum payment until such participant attains the age of 70
1
/
2
. If the participant’s amount is less than
$5,000, a lump sum distribution is made following termination of employment.
6
AMBAC FINANCIAL GROUP, INC
SAVINGS INCENTIVE PLAN
Notes to Financial Statements
December 31, 2009 and 2008
(1), Continued
Participants may borrow, subject to limitations relative to prior loans, up to one-half of their vested account balances, but not to
exceed $50,000. The minimum loan amount is $500. The loan will bear a fixed rate of interest as determined by the Plan Administrative Committee, which for 2009 and 2008 was equal to the federal funds rate plus 1%. Participants may have up to three
outstanding loans at any one time. Repayment of the loan shall be made through payroll deductions over a term not to exceed five years. However, if the loan is used to acquire a principal residence the term of the loan may be for up to 15 years. All
outstanding loans shall be due and payable at the time of any distribution of all or any portion of the value of a participant’s account. There were 70 participant loans outstanding at December 31, 2009 with interest rates ranging from
3.25% – 9.50% and with maturities through 2022. There were 89 participant loans outstanding at December 31, 2008 with interest rates ranging from 4.00% – 10.50% and with maturities through 2022.
|
(2)
|
Summary of Significant Accounting Policies
|
The following are the significant accounting policies followed by the Plan:
|
|
(a)
|
Basis of Accounting and Use of Estimates
|
The financial statements of the Plan are prepared under the accrual method of accounting. The preparation of financial statements in
conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, as well as disclosures of contingent assets and
liabilities at the dates of the financial statements. These estimates and assumptions are based on management’s best estimate and judgment. Management evaluates the estimates and assumptions on an ongoing basis using historical experience and
other factors, including the current economic environment. Management adjusts such estimates when fact and circumstances dictate. As future events and their effects cannot be determined with precision, actual results may differ from those estimates
and assumptions.
|
|
(b)
|
Investment Valuation and Income Recognition
|
The Plan’s investments are stated at fair value. Shares of registered investment companies (mutual funds) are valued at quoted
market prices, which represent the net asset value of shares held by the Plan at year-end. The Ambac Financial Group, Inc. Stock Fund is valued at its year-end unit closing price. The Ambac Financial Group, Inc. Stock Fund consists of Ambac
Financial Group, Inc. common stock as well as small amounts of cash. The Ambac Financial Group, Inc. common stock in the stock fund is valued using quoted market prices. Participant loans are valued at amortized cost which approximates fair value
based on discounted cash flows. Purchases and sales of investments are recorded on a trade date basis. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Capital gain distributions are included in dividend
income.
7
AMBAC FINANCIAL GROUP, INC
SAVINGS INCENTIVE PLAN
Notes to Financial Statements
December 31, 2009 and 2008
(2), Continued
The Plan pays routine administrative, accounting, legal and investment advisory expenses to the extent not paid by Ambac.
Benefits are recorded when paid.
|
|
(e)
|
Risks and Uncertainties
|
The Plan offers a number of investment options including the Ambac Financial Group, Inc. Stock Fund and a variety of mutual funds. The
investment funds consist of U.S. equities, international equities, and fixed income securities. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risk. Due to the level of
risk associated with certain investment securities, it is reasonable to expect that changes in the values of investment securities will occur in the near term and that such changes could materially affect participant account balances.
The Plan’s exposure to a concentration of credit risk is limited by the diversification of investments across all fund elections.
Additionally, the investments within each fund election are further diversified into varied financial instruments, with the exception of the Ambac Financial Group, Inc. Stock Fund, which invests entirely in the securities of a single issuer. Over
the past several years, the Ambac Financial Group, Inc. Stock Fund has been impacted by the decline in the share price of Ambac. This decline was a result of losses related to residential mortgage-backed exposures and other financial losses. Current
employee participants’ abilities to make decisions in investment activities in the Ambac Financial Group, Inc. Stock Fund are suspended during the “black-out” periods that are part of Ambac’s procedures designed to avoid
violations of applicable securities laws.
The Plan’s investments include mutual funds that may indirectly invest in
securities with contractual cash flows, such as asset-backed securities, collateralized mortgage obligations and commercial mortgage-backed securities, including securities backed by sub-prime mortgage loans. The value, liquidity and related income
of these securities is sensitive to changes in economic conditions, including real estate value, delinquencies of defaults, or both, and may be adversely affected by shifts in the market’s perception of the issuers and changes in interest
rates.
8
AMBAC FINANCIAL GROUP, INC
SAVINGS INCENTIVE PLAN
Notes to Financial Statements
December 31, 2009 and 2008
(2), Continued
|
|
(f)
|
New Accounting Pronouncements
|
In April 2009, the Financial Accounting Standards Board (“FASB”) issued guidance under Accounting Standards Codification
(“ASC”) 820 Fair Value Measurements and Disclosures, which was formerly referred to as
FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly
. This guidance addresses the factors that determine whether there has been a significant decrease in the volume and level of activity for an asset or liability when compared to the normal market activity. Under
this guidance, if the reporting entity has determined that the volume and level of activity has significantly decreased and transactions are not orderly, further analysis is required and significant adjustments to the quoted prices or transactions
may be needed. This guidance was effective for interim and annual reporting periods ending after June 15, 2009 and the adoption did not have a material impact on the Plan’s financial condition or results of operations. The adoption of this
guidance is reflected, where applicable, throughout these financial statements.
In June 2009, the FASB issued guidance under
ASC 105, Generally Accepted Accounting Principles, which was formerly referred to as FASB Statement of Financial Accounting Standards No. 168,
FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles – A Replacement of FASB Statement No. 162
. This guidance establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative U.S. generally accepted accounting principles
(“GAAP”) for nongovernmental entities. The Codification supercedes all existing non-Securities and Exchange Commission (“SEC”) accounting and reporting standards. Rules and interpretive releases of the SEC under authority of
federal security laws remain authoritative GAAP for SEC registrants. This guidance and the Codification are effective for financial statements issued for interim and annual periods ending after September 15, 2009. As the Codification did not
change existing GAAP, the adoption did not have an impact on the Plan’s financial condition or results of operations.
In
September 2009, the FASB issued ASC Update 2009-12,
Fair Value Measurements and Disclosures (Topic 820) – Investment in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent)
. This update provides guidance on
estimating the fair value of a company’s investments in investment companies when the investment does not have a readily determinable fair value. It permits the use of the investment’s net asset value as a practical expedient to determine
fair value. This guidance also required additional disclosure of the attributes of these investments such as: (i) the nature of any restrictions on the reporting entity’s ability to redeem its investment; (ii) unfunded commitments;
and (iii) investment strategies of the investees. This guidance is effective for periods ending after December 15, 2009. The adoption did not have a material impact on the Plan’s financial condition or results of operations and all
applicable disclosures are included in these financial statements.
9
AMBAC FINANCIAL GROUP, INC
SAVINGS INCENTIVE PLAN
Notes to Financial Statements
December 31, 2009 and 2008
(2), Continued
In
January 2010, the FASB issued ASC Update 2010-06,
Fair Value Measurements and Disclosures (Topic 820) – Improving Disclosures about Fair Value Measurements
. This guidance requires: (i) separate disclosure of significant transfers
between Level 1 and Level 2 and reasons for the transfers; (ii) disclosure, on a gross basis, of purchases, sales, issuances, and net settlements within Level 3; (iii) disclosures by class of assets and liabilities; and (iv) a
description of the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. This guidance is effective for reporting periods beginning after December 15, 2009, except for the Level
3 disclosure requirements, which will be effective for fiscal years beginning after December 15, 2010 and interim periods within those fiscal years with early adoption permitted. The adoption of this guidance is reflected, where applicable,
throughout the notes of the financial statements.
The
following investments represent 5 percent or more of the Plan’s net assets.
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
2008
|
|
Vanguard Prime Money Market Mutual Fund
|
|
$
|
10,267,980
|
|
$
|
12,055,145
|
|
|
|
|
|
Vanguard International Growth Mutual Fund
|
|
|
7,194,270
|
|
|
4,891,254
|
|
|
|
|
|
Vanguard 500 Index Mutual Fund
|
|
|
6,936,472
|
|
|
5,691,532
|
|
|
|
|
|
Vanguard Growth & Income Mutual Fund
|
|
|
4,922,963
|
|
|
4,298,797
|
|
|
|
|
|
Vanguard Windsor II Mutual Fund
|
|
|
4,517,841
|
|
|
3,763,687
|
|
|
|
|
|
Vanguard Explorer Mutual Fund
|
|
|
3,582,857
|
|
|
*
|
|
|
|
|
|
Vanguard Inflation-Protected Securities Mutual Fund
|
|
|
*
|
|
|
3,325,765
|
|
|
|
|
|
Vanguard Total Bond Market Index Mutual Fund
|
|
|
*
|
|
|
3,311,755
|
* Investment did not exceed 5% of the Plan’s Net Assets for the period.
The net appreciation (depreciation) of investments (including gains and losses on investments bought and sold, as well as held) for the
years ended December 31, 2009 and 2008 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
|
Ambac Financial Group, Inc. Stock Fund
|
|
$
|
(438,884
|
)
|
|
$
|
(11,368,701
|
)
|
|
Mutual Funds
|
|
|
9,293,396
|
|
|
|
(20,469,654
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
8,854,512
|
|
|
$
|
(31,838,355
|
)
|
|
|
|
|
|
|
|
|
|
|
10
AMBAC FINANCIAL GROUP, INC
SAVINGS INCENTIVE PLAN
Notes to Financial Statements
December 31, 2009 and 2008
(3), Continued
Fair
value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date. ASC 820 requires Plan management to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The three levels of the fair value hierarchy are as
follows:
|
|
|
|
|
|
|
|
Level 1
|
|
Fair value is based on quoted prices for identical instruments traded in active markets.
|
|
|
|
|
Level 2
|
|
Fair value is based on significant inputs, other than Level 1 inputs, that are observable for the asset or liability. Level 2 inputs include quoted market prices in active
markets for similar assets and liabilities and other market observable inputs. Valuations are generally obtained from third party pricing services for identical or comparable assets or liabilities, non-binding broker quotes (when pricing service
information is not available) or through the use of valuation methodologies using observable market inputs. If the asset or liability has a specified contractual term, the Level 2 input must be observable for substantially the full term of the asset
or liability.
|
|
|
|
|
Level 3
|
|
Fair value is based on at least one or more significant unobservable inputs for the asset or liability. These inputs reflect the assumptions market participants would use in
pricing the asset or liability.
|
The
following is a description of the valuation methodologies used for assets measured at fair value or a recurring basis.
Mutual Funds
The fair value of the Plan’s investment in mutual funds are obtained from a quoted market price in an active market and is classified
as Level 1.
11
AMBAC FINANCIAL GROUP, INC
SAVINGS INCENTIVE PLAN
Notes to Financial Statements
December 31, 2009 and 2008
(3), Continued
Ambac Financial Group, Inc. Stock Fund
The fair value of the Plan’s investment in the Stock Fund is obtained from a quoted market price in an active market and is
classified as Level 1.
Loans to Participants
These loans are valued at amortized cost, which approximates fair value based on discounted cash flows, and are classified at Level 3.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or
reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain
financial instruments could result in a different fair value measurement at the reporting date.
The following tables provides
the level of valuation assumptions used to determine the carrying value of the Plan’s assets which are measured at fair value on a recurring basis at December 31, 2009 and 2008, respectively:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009:
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Ambac Financial Group, Inc.
Stock Fund
|
|
$
|
757,054
|
|
$
|
—
|
|
$
|
—
|
|
$
|
757,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual Funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term Reserves
|
|
|
10,267,980
|
|
|
—
|
|
|
—
|
|
|
10,267,980
|
|
Bond Funds
|
|
|
12,830,694
|
|
|
—
|
|
|
—
|
|
|
12,830,694
|
|
Balanced Funds
|
|
|
7,628,374
|
|
|
—
|
|
|
—
|
|
|
7,628,374
|
|
Domestic Stock Funds
|
|
|
23,682,403
|
|
|
—
|
|
|
—
|
|
|
23,682,403
|
|
International Stock Funds
|
|
|
7,817,022
|
|
|
—
|
|
|
—
|
|
|
7,817,022
|
|
Specialty Stock Funds
|
|
|
1,415,787
|
|
|
—
|
|
|
—
|
|
|
1,415,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Mutual Funds
|
|
|
63,642,260
|
|
|
—
|
|
|
—
|
|
|
63,642,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
—
|
|
|
—
|
|
|
790,295
|
|
|
790,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at fair value
|
|
$
|
64,399,314
|
|
$
|
—
|
|
$
|
790,295
|
|
$
|
65,189,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
AMBAC FINANCIAL GROUP, INC
SAVINGS INCENTIVE PLAN
Notes to Financial Statements
December 31, 2009 and 2008
(3), Continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008:
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Ambac Financial Group, Inc.
Stock Fund
|
|
$
|
1,253,438
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,253,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual Funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-Term Reserves
|
|
|
12,055,145
|
|
|
—
|
|
|
—
|
|
|
12,055,145
|
|
Bond Funds
|
|
|
11,498,201
|
|
|
—
|
|
|
—
|
|
|
11,498,201
|
|
Balanced Funds
|
|
|
6,187,192
|
|
|
—
|
|
|
—
|
|
|
6,187,192
|
|
Domestic Stock Funds
|
|
|
18,472,000
|
|
|
—
|
|
|
—
|
|
|
18,472,000
|
|
International Stock Funds
|
|
|
5,216,310
|
|
|
—
|
|
|
—
|
|
|
5,216,310
|
|
Specialty Stock Funds
|
|
|
1,019,916
|
|
|
—
|
|
|
—
|
|
|
1,019,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Mutual Funds
|
|
|
54,448,764
|
|
|
—
|
|
|
—
|
|
|
54,448,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
—
|
|
|
—
|
|
|
917,471
|
|
|
917,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at fair value
|
|
$
|
55,702,202
|
|
$
|
—
|
|
$
|
917,471
|
|
$
|
56,619,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below sets forth a summary of changes in the
fair value of the Plan’s level 3 assets for the years ended December 31, 2009 and 2008:
|
|
|
|
|
|
|
|
|
|
|
|
2009 Loans
to
Participants
|
|
|
2008 Loans
to
Participants
|
|
Balance, beginning of year
|
|
$
|
917,471
|
|
|
$
|
837,809
|
|
Purchases, sales, issuances and settlements, (net)
|
|
|
(127,176
|
)
|
|
|
79,662
|
|
|
|
|
|
|
|
|
|
|
Balance, end of year
|
|
$
|
790,295
|
|
|
$
|
917,471
|
|
|
|
|
|
|
|
|
|
The
Internal Revenue Service has determined and informed Ambac by a letter dated December 7, 2007 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code. The Plan administrator believes that
the Plan is designed and is currently being operated in compliance with the applicable requirements of the Internal Revenue Code.
Although Ambac has not expressed any intention to do so, Ambac has the right under the Plan to discontinue its contributions at any time
and to terminate the Plan subject to the provisions set forth in ERISA. In the event the Plan was terminated, the net assets of the Plan would be allocated as prescribed by ERISA and its related regulations, generally to provide benefits, after all
expenses, to the participants and beneficiaries of the Plan.
13
AMBAC FINANCIAL GROUP, INC
SAVINGS INCENTIVE PLAN
Notes to Financial Statements
December 31, 2009 and 2008
|
(6)
|
Related Party Transactions
|
Certain Plan investments are shares of mutual funds managed by an affiliate of Vanguard. Vanguard is the trustee as defined by the Plan
and, therefore, these transactions qualify as party-in-interest transactions.
For
the year ended December 31, 2009, subsequent events have been evaluated by management through June 29, 2010, the date which the Plan’s financial statements were available to be issued.
Effective January 1, 2010, the Plan was amended to suspend all basic, supplemental and discretionary profit sharing contributions
under the Plan. If a participant elected to make a pre-tax salary deferral to the Plan for 2010, the participant will receive an employer matching contribution equal to (i) $1.00 for every dollar they contribute to a maximum of 3% of their base
compensation for each payroll period and (ii) 50% of every dollar they contribute, up to an additional 2% of their base compensation for each payroll period. Under the Plan, base compensation is limited as required by the Internal Revenue Code.
The limit in 2010 is $245,000 and may be increased in future years to adjust for the increased cost of living.
On
May 24, 2010, a putative class action entitled Karthikeyan V. Veera v. Ambac Financial Group, Inc. et al., asserting violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), was filed in the United States District
Court for the Southern District of New York, Case No. 10 CV 4191, naming as defendants, inter alia, the Company, the Ambac Plan Administrative Committee, and a number of current and former officers of the Company. This action is
purportedly brought on behalf of the Ambac Financial Group, Inc. Savings Incentive Plan and all persons, excluding defendants and their immediate families, who were participants in the Plan from October 25, 2006 through April 23, 2009 and
whose Plan accounts included an investment in Ambac stock. The complaint alleges, among other things, that defendants “breached their fiduciary duties” by “continuing to offer Ambac Stock as an investment option for the Plan when
it was imprudent to do so” and by “failing to provide complete and accurate information to Plan Participants regarding the Company’s financial condition and the risk of investing retirement assets in Ambac Stock,” in light of
inter alia Ambac’s alleged “exposure to billions of dollars of losses on high risk transactions” and Ambac’s alleged “significantly loosened and lowered . . . underwriting standards.” This ERISA action seeks, among
other things, compensatory damages and attorneys’ fees. The Company believes that it has substantial defenses to the claim raised in this lawsuit and intends to defend itself vigorously; however, the Company is not able to predict the outcome
of this action. Management does not expect this lawsuit will have any impact on the Plan’s financial statements.
14
Schedule 1
Ambac Financial Group, Inc.
Savings Incentive Plan
Schedule H, Line 4i – Schedule of Assets (Held at End of Year)
December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
Identity of Issue
|
|
Description and Number of Shares
|
|
Value
|
|
* Ambac Financial Group, Inc. Stock Fund
|
|
Common Stock Fund; 950,070 shares at cost of $14,139,208
|
|
$
|
757,054
|
|
|
|
|
|
|
|
|
|
|
|
|
* Vanguard Prime Money Market Mutual Fund
|
|
Mutual Fund; 10,267,980 shares
|
|
|
10,267,980
|
|
* Vanguard International Growth Mutual Fund
|
|
Mutual Fund; 423,441 shares
|
|
|
7,194,270
|
|
* Vanguard 500 Index Mutual Fund
|
|
Mutual Fund; 67,561 shares
|
|
|
6,936,472
|
|
* Vanguard Growth & Income Mutual Fund
|
|
Mutual Fund; 210,563 shares
|
|
|
4,922,963
|
|
* Vanguard Windsor II Mutual Fund
|
|
Mutual Fund; 190,787 shares
|
|
|
4,517,841
|
|
* Vanguard Explorer Mutual Fund
|
|
Mutual Fund; 62,528 shares
|
|
|
3,582,857
|
|
* Vanguard Total Bond Market Index Mutual Fund
|
|
Mutual Fund; 301,231 shares
|
|
|
3,117,743
|
|
* Vanguard Inflation-Protected Securities Mutual Fund
|
|
Mutual Fund; 240,230 shares
|
|
|
3,014,888
|
|
* Vanguard Long-Term Investment Grade
|
|
Mutual Fund; 326,927 shares
|
|
|
2,916,187
|
|
* Vanguard GNMA Mutual Fund
|
|
Mutual Fund; 235,070 shares
|
|
|
2,501,146
|
|
* Vanguard Wellington Mutual Fund
|
|
Mutual Fund; 77,470 shares
|
|
|
2,235,012
|
|
* Vanguard U.S. Growth Mutual Fund
|
|
Mutual Fund; 124,415 shares
|
|
|
2,047,864
|
|
* Vanguard REIT Index Mutual Fund
|
|
Mutual Fund; 95,403 shares
|
|
|
1,415,787
|
|
* Vanguard Morgan Growth Investment Mutual Fund
|
|
Mutual Fund; 92,417 shares
|
|
|
1,411,202
|
|
* Vanguard Short-term Bond Index Mutual Fund
|
|
Mutual Fund; 122,911 shares
|
|
|
1,280,730
|
|
* Vanguard Target Retirement 2025 Mutual Fund
|
|
Mutual Fund; 93,031 shares
|
|
|
1,053,109
|
|
* Vanguard Target Retirement 2020 Mutual Fund
|
|
Mutual Fund; 37,017 shares
|
|
|
738,869
|
|
* Vanguard Target Retirement 2015 Mutual Fund
|
|
Mutual Fund; 56,843 shares
|
|
|
642,890
|
|
* Vanguard Target Retirement 2030 Mutual Fund
|
|
Mutual Fund; 33,077 shares
|
|
|
638,712
|
|
* Vanguard International Value Mutual Fund
|
|
Mutual Fund; 20,345 shares
|
|
|
622,752
|
|
* Vanguard Target Retirement 2040 Mutual Fund
|
|
Mutual Fund; 28,576 shares
|
|
|
544,375
|
|
* Vanguard LifeStrategy Growth Mutual Fund
|
|
Mutual Fund; 25,220 shares
|
|
|
493,307
|
|
* Vanguard Target Retirement 2035 Mutual Fund
|
|
Mutual Fund; 26,667 shares
|
|
|
309,870
|
|
* Vanguard Calvert Social Index Mutual Fund
|
|
Mutual Fund; 39,520 shares
|
|
|
263,204
|
|
* Vanguard LifeStrategy Conservative Growth Mutual Fund
|
|
Mutual Fund; 16,981 shares
|
|
|
256,751
|
|
* Vanguard LifeStrategy Moderate Growth Mutual Fund
|
|
Mutual Fund; 11,987 shares
|
|
|
212,046
|
|
* Vanguard Target Retirement 2005 Mutual Fund
|
|
Mutual Fund; 14,299 shares
|
|
|
157,004
|
|
* Vanguard Target Retirement 2045 Mutual Fund
|
|
Mutual Fund; 8,161 shares
|
|
|
98,097
|
|
* Vanguard LifeStrategy Income Mutual Fund
|
|
Mutual Fund; 6,870 shares
|
|
|
91,164
|
|
* Vanguard Target Retirement Income Mutual Fund
|
|
Mutual Fund; 6,719 shares
|
|
|
71,151
|
|
* Vanguard Target Retirement 2010 Mutual Fund
|
|
Mutual Fund; 2,426 shares
|
|
|
49,774
|
|
* Vanguard Target Retirement 2050 Mutual Fund
|
|
Mutual Fund; 1,897 shares
|
|
|
36,243
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Mutual Funds
|
|
|
|
|
63,642,260
|
|
|
|
|
|
|
|
|
|
|
|
|
* Participant Loans
|
|
70 participants loans (Interest rate range 3.25% to 9.50% and maturities through 2022).
|
|
|
790,295
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments
|
|
|
|
$
|
65,189,609
|
|
|
|
|
|
|
|
* party-in-interest as defined by ERISA
See accompanying Report of Independent Registered Public Accounting Firm
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administrator the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ambac Financial Group, Inc.
Savings Incentive Plan
|
|
|
|
|
|
|
Dated: June 29, 2010
|
|
|
|
By:
|
|
/s/ Diana N. Adams
|
|
|
|
|
|
|
|
|
|
Diana N. Adams
Plan
Administrator
|
16
EXHIBIT INDEX
|
|
|
|
|
|
|
Exhibit
Number
|
|
Document
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm.
|
17
Grafico Azioni AMBAC (NYSE:ABK)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni AMBAC (NYSE:ABK)
Storico
Da Lug 2023 a Lug 2024
