EXHIBIT 10.06(b)
FORM OF AMENDMENT NO. 1
TO MANAGEMENT RETENTION AGREEMENT
AMENDMENT NO. 1, DATED AS OF JANUARY 29, 1997, TO THE MANAGEMENT RETENTION
AGREEMENT, MADE AS OF DECEMBER 30, 1994 (THE "AGREEMENT"), BY AND BETWEEN AMBAC
INC., A DELAWARE CORPORATION (THE "COMPANY"), AND THE OFFICER NAMED ON THE
SIGNATURE PAGE OF THIS AMENDMENT NO. 1 (THE "EXECUTIVE").
WHEREAS, the Company and the Executive entered into the Agreement in order
to further the Company's policy of fostering the continuous employment of key
management personnel, such as the Executive, in the event of any actual or
threatened change in control by providing for the payment of severance and other
benefits in the event of the Executive's termination of employment following a
change in control; and
WHEREAS, the Company and the Executive have agreed to amend the Agreement
in the manner set forth herein, such amendments having been approved by the
Compensation and Organization Committee of the Company's Board of Directors;
NOW, THEREFORE, in consideration of the foregoing premises and of the
covenants and agreements herein contained, the parties hereto agree as follows
(all capitalized terms used herein without definition having the meanings
ascribed thereto in the Agreement):
1. DEFINITION OF CHANGE IN CONTROL.
(a) Addition of Cross-Reference. The first sentence of Section 2 of the
Agreement is amended by adding the expression "(as defined in Section 7(i) of
this Agreement)" immediately following the words "on the date of any Change in
Control" occurring in such sentence.
(b) Elimination of Old Definition. The third sentence of Section 2 of the
Agreement, which sets forth the definition of "Change in Control" currently
applicable to the Agreement, is eliminated in its entirety.
(b) Addition of New Definition. A new Section 7(i) is added to the
Agreement as follows:
"(i) CHANGE IN CONTROL. For purposes of this Agreement, a "Change in
Control" shall be deemed to occur on the date on which one of the following
events occurs:
(i) the acquisition by any Person of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended) of 20% or more of the common stock of the Company, par
value $0.01 per share (the "COMMON STOCK"), then outstanding, but shall not
include any such acquisition by:
(A) the Company;
(B) any Subsidiary of the Company;
(C) any employee benefit plan of the Company or of any
Subsidiary of the Company;
(D) any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan;
(E) any Person who as of January 31, 1996 was the beneficial
owner of 15% or more of the shares of Common Stock outstanding on such
date unless and until such Person, together with all Affiliates and
associates of such Person, becomes the beneficial owner of 25% or more
of the shares of Common Stock then outstanding whereupon a Change in
Control shall be deemed to have occurred; or
(F) any Person who becomes the Beneficial Owner of 20% or more,
or, with respect to a Person described in clause (E) above, 25% or
more, of the shares of Common Stock then outstanding as a result of a
reduction in the number of shares of Common Stock outstanding due to
the repurchase of shares of Common Stock by the Company unless and
until such Person, after becoming aware that such Person has become
the beneficial owner of 20% or more, or 25% or more, as the case may
be, of the then outstanding shares of Common Stock, acquires
beneficial ownership of additional shares of Common Stock representing
1% or more of the shares of Common Stock then outstanding, whereupon a
Change in Control shall be deemed to have occurred; or
(ii) individuals who, as of January 29, 1997, constitute the Board,
and subsequently elected members of the Board whose election is approved
or recommended by at least a majority of such current members or their
successors whose election was so approved or recommended (other than any
subsequently elected members whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other
than the Board), cease for any reason to constitute at least a majority
of such Board.
As used herein, "Person" means any individual, firm, corporation,
partnership or other entity, and "Subsidiary" means (i) a corporation or
other entity with respect to which the Company, directly or indirectly,
has the power, whether through the ownership of voting securities, by
contract or otherwise, to elect at least a majority of the members of
such corporation's board of directors or analogous governing body, or
(ii) any other corporation or other entity in which the Company,
directly or indirectly, has an equity or similar interest and which the
Committee designates as a Subsidiary for purposes of this Agreement."
2. AGREEMENT REMAINS IN FORCE. Except as modified by this
Amendment no. 1, the Agreement remains in full force and effect in accordance
with the original terms thereof.
IN WITNESS WHEREOF the parties hereto have executed this
Amendment No. 1 as of the day and year first written above.
AMBAC INC.
By:
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Name: Name:
Title: Address:
