EXHIBIT 10.18
December 21, 1999
as amended December 29, 1999
Joseph V. Salzano, Esq.
2 Charlton Street, #6A
New York, NY 10014
Dear Mr. Salzano:
This Agreement and General Release ("Agreement") sets forth our agreement
regarding your employment relationship with Ambac Assurance Corporation
("Ambac"), and the termination of that relationship. As a result of discussions
between you and Ambac, it has been decided that a mutually agreed upon
resignation is in the best interest of both parties. By signing this Agreement,
you hereby acknowledge and agree to the following terms and conditions
concerning your resignation from Ambac:
1. Effective Date of Resignation.
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Your Resignation as an employee of Ambac shall be effective April 28, 2000
(the "Resignation Date").
During the period from the date of this Agreement through February 11, 2000
(the "Employment Period"), you will continue to report to the President and
Chief Executive Officer and continue to perform your full-time duties.
During the period from February 12, 2000 through April 28, 2000 (the
"Transition Period") you will be on-call and no longer be required to
report to the office unless requested. You agree to make yourself available
to provide information or assistance concerning work within your
responsibilities at Ambac, as requested by the President and Chief
Executive Officer of Ambac.
2. Severance Pay.
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(a) During the Employment and Transition Periods, you will continue to
receive your regular salary.
(b) You will be paid severance, the total sum of which will be $225,000.
Said amount will be paid in a lump sum, within twenty business days of the
Effective Date of this
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Agreement (as defined in Paragraph 20 of this Agreement). Said payment will
be net of applicable Federal, state and local taxes.
3. Bonuses for 1999.
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You will be paid a bonus of $125,000 for work performed during the calendar
year 1999. Said amount will be paid at the same time bonuses are paid to
Ambac's general population for the 1999 performance year. Said payment will
be net of applicable Federal, state and local taxes. If you do not sign
this Agreement and, following the Resignation Date, Exhibit A following or
if you revoke this Agreement, you forfeit your right to any payment
provided for in this paragraph 3 and, to the extent any payment has been
made, you agree to return all payments made pursuant to this paragraph.
4. Benefits.
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From the date of this Agreement through the Resignation Date, your current
benefit elections will continue. During this period, you will be required
to make your normal employee contribution to benefit coverage and will be
subject to any increases in employee contribution that a regular employee
with like coverage may be required to pay.
After the Resignation Date, you will continue to be covered under Ambac's
medical and dental plans through May 31, 2000. During this period, you will
be required to make your normal employee contribution for benefit coverage
and will be subject to any increases in employee contribution that a
regular employee with like coverage may be required to pay. Thereafter, you
will be eligible for continued benefits under the applicable provisions of
COBRA.
5. Vacation.
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You will be paid any accrued and unused vacation earned through the
Resignation Date. Your accrued and unused vacation through the Resignation
Date totals 5 days. Said vacation time will be paid with your last regular
paycheck.
6. Stock Options and Restricted Stock Units.
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i) As of the date of this Agreement, 167,501 of the Ambac stock options
that have been granted to you by the Compensation and Organization
Committee of Ambac Financial Group, Inc.'s Board of Directors are vested.
As of the Resignation Date, an additional 37,666 options will have vested.
In consideration of your entering into this Agreement and this Agreement
becoming irrevocable, the following options will vest on the Effective Date
of this Agreement: 1,333 granted January 27, 1998 and 12,000 granted on
January 26, 1999.
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ii) After the Effective Date, you will have thirty days from the
Resignation Date to exercise the options with 1991 through 1993 grant
dates, you will have six months from the Resignation Date to exercise the
options with 1994 through 1996 grant dates and one year from the
Resignation Date to exercise the vested stock options granted in 1997, 1998
and 1999. The terms of the 1997 Equity Plan and the General Terms and
Conditions of the respective stock option grants shall govern in the event
of death or disability. Any vested options not exercised within the time
frames set forth above will be forfeited.
iii) As of the date of this Agreement, none of the Ambac Restricted Stock
Units that have been granted to you are vested. One-half of the RSUs
granted to you in January 1999 will be vested as of January 26, 2000. These
RSUs will be settled no later than the January following your Resignation
Date (January 2001). The balance of the RSUs granted to you will not vest
and be forfeited. In lieu of the RSUs that will be forfeited, Ambac will
pay you, during calendar year 1999, the sum of $40,000.
iv) As of the Resignation Date, you will not be subject to Ambac's
Insider Trading Policies, but you will remain subject to provisions imposed
by federal and state securities laws prohibiting insider trading. If you
have any questions regarding this matter, please contact Ambac's General
Counsel or Managing Director, Human Resources.
7. Outplacement
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Ambac will engage an outplacement firm to provide you with job placement
services for a period of three months or through the date upon which you
secure new employment or engage in any consulting or independent contractor
work, whichever is earlier. The terms and conditions of the outplacement
services will be at Ambac's sole discretion. To affirmatively elect
outplacement, please contact Ambac's Managing Director, Human Resources and
Employment Counsel to initiate outplacement by July 30, 2000. If you do not
commence outplacement by September 30, 2000, you forfeit this service.
8. Retirement Plans.
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i) You will be vested in Ambac's Pension Plan as of your Resignation Date
and, therefore, be entitled to a benefit as a vested participant from
Ambac. Your pension benefit calculation will include all credited service
through the Resignation Date.
ii) Through the Resignation Date, company-match and profit-sharing
contributions will be credited on your behalf to the Ambac Financial Group,
Inc. Savings Incentive Plan, subject to the terms and conditions of the
Plan.
9. You agree and acknowledge that the payments and benefits to be made in
accordance with paragraphs 2, 3, 4, 6 and 7 of this Agreement exceed any
sums to which you would otherwise be entitled under any Ambac policy, plan
and/or procedure.
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10. Any Ambac property currently in your possession shall be returned to Ambac
(at Ambac's expense) at your earliest convenience, but no later than
February 11, 2000.
11. Confidentiality.
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In consideration for the payments described above, you agree to the
following:
(a) Ambac (Ambac refers to Ambac Financial Group, Inc. and all of its
affiliates) is engaged in a highly competitive business and that, in
connection with your employment, you have access to information relating
to Ambac's business that provides Ambac with a competitive advantage,
that is not generally known by persons not employed by Ambac, and that
could not easily be determined or learned by someone outside Ambac
(collectively, "Confidential Information"). Such Confidential
Information includes, but is not limited to, the identity,
characteristics and preferences of Ambac's customers (as defined below)
and accounts, matters relating to information, pricing, fee and
commission structures, trading policies and procedures, trade secrets,
records, files, memoranda, documents, reports, and other written,
printed or recorded materials and data, regardless of data storage
method (collectively "Documents") received, created, or used by you
during the course of your employment and other methods of doing
business, whether or not marketed as confidential or secret. As used
herein, "Customer" shall include all clients and actively pursued
prospective clients of Ambac.
(b) You agree that before and after the Resignation Date, you shall
not, directly or indirectly, use or disclose such Confidential
Information, except as may be necessary in the good faith performance of
your duties to Ambac. You acknowledge that all Confidential Information
will remain the sole property of Ambac and will be returned by you to
Ambac within five business days of the Resignation Date. The terms and
conditions of this paragraph 11(a) and (b) are in addition to and do not
supersede or replace the terms and obligations of Ambac's Code of
Business Conduct.
(c) You further agree that from the Effective Date of this Agreement
through six months following the Resignation Date, you will not, for any
reason, unless Ambac consents in writing, hire or seek to hire, whether
on your own behalf or on behalf of any other person or entity, any
person who is an employee of Ambac at the Resignation Date, or who left
the employ of Ambac within three months prior to such date. If you
breach any of the terms of this paragraph 11(c), you forfeit your right
to future payments provided for herein from the date of such breach and,
to the extent any payments have been made, you agree to return all
payments made pursuant to this Agreement.
(d) In view of the nature of Ambac's business, you also acknowledge
that the restrictions contained in paragraph 11 are fair, reasonable and
necessary to protect the legitimate business interests of Ambac and that
Ambac will suffer irreparable harm in
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the event of any actual or intended violation by you of this paragraph.
You, therefore, agree that, in the event of any actual or intended
violation by you of paragraph 11(b) or 11(c), Ambac shall be entitled to
a court order requiring you to cease any such violations in addition to
and without prejudice to any other rights or remedies which may be
available to Ambac through the legal system.
(e) You shall not be deemed to be in breach of any covenant set forth in
this Agreement on the basis of any communications you may have with third
parties relating to: (i) the fact of your employment by Ambac; (ii) your
job titles at Ambac; (iii) the dates of your employment by Ambac; (iv) the
responsibilities and authorities of your positions at Ambac; (v) the nature
and extent of your achievements during employment by Ambac; and (vi) the
names and positions of individuals with whom you worked during your
employment at Ambac. You hereby authorize Ambac to provide the information
responsive to items (i) through (iv) and (vi) to prospective employers.
(f) You shall not be deemed in breach of the confidentiality obligations
set forth in paragraph 11 if, compelled by legal process or court order,
you are to participate in any administrative, judicial or criminal
investigation, probe, grand jury proceeding or other demand for testimony,
information or documentation.
(g) Before initiating any litigation, Ambac shall give written notice to
you if it believes you are in violation of any covenant or obligation under
this agreement. Upon written request, you will receive Ambac's
determination in writing regarding whether a particular activity or act
would be deemed in breach of your obligations and/or covenants under this
Agreement.
12. General Releases.
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In consideration of the payments provided for in paragraphs 2, 3, 4, 6 and
7 of this Agreement, and other valuable consideration as set forth in this
Agreement, you for yourself and for your heirs, executors, administrators,
trustees, legal representatives and assigns (hereinafter collectively
referred to as the "Releasors") hereby release and discharge Ambac, and any
and all of its parent corporations, shareholders, subsidiaries, divisions,
affiliated and related entities, employee benefit and/or pension plans or
funds, successors and assigns, and any and all of its or their past,
present or future officers, directors, agents, stockholders, fiduciaries,
administrators, employees or assigns (whether acting as agents for Ambac or
in their individual capacities) (hereinafter collectively referred to as
"Releasees"), of and from any and all claims, demands, causes of action,
and liabilities of any kind whatsoever, whether known or unknown, whether
arising in law or in equity or arising out of any Federal, state or city
constitution, statute, ordinance, bylaw or regulation (including but not
limited to, all common law claims, all claims arising under the Age
Discrimination in Employment Act of 1967, the Older Workers Benefit
Protection Act, Title VII of the Civil Rights Act of 1964, as amended, the
New York State Human Rights Law, the New
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York City Administrative Code, and the like) or by reason of any act,
omission, transaction, conduct or occurrence up to and including the
Effective Date of this Agreement and General Release, which you ever had,
now have or hereafter can, shall or may have against the Releasees for,
upon or by reason of any act, omission, transaction, conduct or occurrence
up to and including the date of this Agreement.
In consideration of the payments provided for in paragraphs 2, 3, 4, 6 and
7 of this Agreement, and other valuable consideration as set forth herein,
you also agree to provide Ambac, on the Resignation Date, with an executed
copy of a General Release in the form annexed hereto as Exhibit A.
Not withstanding the above, nothing herein precludes you from enforcing the
terms of this Agreement or from initiating a claim arising under this
Agreement.
13. (a) You represent and warrant that you will not commence, maintain,
prosecute or participate in any action or proceeding of any kind (judicial
or administrative) against any of the Releasees, arising out of any act,
omission, transaction or occurrence happening up to and including the
Effective Date of this Agreement, and have not done so as of the Effective
Date of this Agreement.
(b) Ambac represents and warrants that it will not commence or maintain any
action or proceeding of any kind (judicial or administrative) against you,
arising out of any act, omission, transaction or occurrence happening up to
and including the Effective Date of this Agreement to the extent Ambac is
aware of such act, omission, transaction or occurrence at the time this
Agreement is executed.
14. The terms, conditions, and existence of this Agreement are and shall be
treated as confidential and shall not hereafter be disclosed by you to any
person or entity, except to attorneys, accountants, financial planning or
tax advisors, or immediate family members, or as may be required by law.
Any individual to whom the terms and conditions of this Agreement have been
disclosed will be advised of the confidentiality requirements of this
paragraph. You further agree not to solicit or initiate any demand by
others not party to this Agreement for any disclosure of its terms and
obligations regarding Confidential Information.
15. You agree not to make any derogatory statements of any kind about Ambac (or
any of its subsidiaries, parents, affiliates or related business entities),
or any present or former employee or director of Ambac relating to
performance of his/her duties on behalf of Ambac (or any of its
subsidiaries, parents, affiliates or related business entities) or act in a
manner that is or may be directly harmful to Ambac (or any of its
subsidiaries, parents, affiliates or related business entities).
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16. Ambac agrees to direct all officers with the title of Vice President and
above and with knowledge of the circumstances surrounding your Resignation
to refrain from making any derogatory statements of any kind about you.
17. You agree to cooperate fully with Ambac and its employees by providing
information to Ambac and its representatives, agents or advisors regarding
any business matters with which you were involved on behalf of Ambac and to
cooperate fully in the event of any litigation or legal, administrative or
regulatory proceeding, the facts of which you have knowledge or regarding
any business matters of which you have knowledge or information, including,
but not limited to, providing testimony on behalf of Ambac at any legal,
administrative or regulatory proceedings. Ambac will reimburse you for any
lost wages and/or reasonable expenses for travel, lodging and meals that
result from your compliance with this paragraph.
To the extent you are a named party to any action, suit or proceeding as a
result of your having been an officer or employee of the Company or any
subsidiary thereof, the Company will indemnify you to the fullest extent
permitted (including payment of expenses in advance of final disposition of
a proceeding) by the laws of the State of Delaware, as in effect at the
time of the subject act or omission, or by the Certificate of Incorporation
and By-Laws of the Company, as in effect at such time or on the date of
this Agreement, whichever affords the greatest protection to you, and you
shall be entitled to the protection of any insurance policies the Company
may elect to maintain generally for the benefit of its directors and
officers (and to the extent the Company maintains such an insurance policy
or policies, you shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the coverage provided for
any Company officer or director), against all costs, charges and expenses
whatsoever incurred or sustained by you or your legal representatives at
the time such costs, charges and expenses are incurred or sustained, in
connection with such actions.
18. In the event of any breach of paragraphs 11 through 15 or paragraph 17,
Ambac shall provide you with written notice (to the address set forth on
page one of this Agreement) and you will have five business days from the
date of receipt of said written notice to cure any curable breach. If you
fail to cure any such breach or the breach is not curable, Ambac shall be
released from any obligation to make any payment to you or on your behalf
and provide any benefits under this Agreement. Ambac shall be further
entitled to pursue any and all of its remedies under the law arising out of
such breach including, but not limited to, recoupment of all monies paid to
you by Ambac or as a result of your entering into this Agreement. In any
action alleging breach of this Agreement, the prevailing party shall be
entitled to recover reasonable costs and/or attorneys' fees incurred to
enforce this Agreement.
19. The making of this Agreement is not intended, and shall not be construed,
as an admission that Ambac, its subsidiaries, parents, affiliates, or
related business entities, or
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any person now or previously employed by Ambac or any of its subsidiaries,
parents, affiliates, or related business entities, have violated any
Federal, state, or local law (statutory or decisional), ordinance or any
common law rule, or that Ambac, its subsidiaries, parents, affiliates, or
related business entities, or any person now or previously employed by
Ambac, its subsidiaries, parents, affiliates or related business entities,
have committed any wrong against you.
20. You may accept this Agreement by signing it and returning it to Ambac.
After signing this Agreement, you shall be given a period of seven (7) days
(the "Revocation Period") during which you may revoke this Agreement by
indicating your desire to do so in writing addressed to Ambac, Human
Resources Department, Attention: Gregg L. Bienstock, Esq., One State Street
Plaza, New York, New York 10004. This Agreement is effective eight (8) days
following your signing of the Agreement and Exhibit A (the "Effective
Date"). If you do not accept this Agreement, as indicated above, or in the
event you revoke this Agreement or Exhibit A during the Revocation Period,
this Agreement shall be null and void.
21. You represent and warrant you have carefully read this Agreement in its
entirety; that you have an opportunity to consider fully the terms of this
Agreement for twenty one (21) days; that you have been advised by Ambac in
writing to consult with an attorney of your choice in connection with this
Agreement, that you fully understand the significance of all of the terms
and conditions of this Agreement; that you have discussed it with your
independent legal counsel, or have had a reasonable opportunity to do so;
that you have had answered to your satisfaction any questions you have
asked with regard to the meaning and significance of any of the provisions
of this Agreement; and that you are signing this Agreement voluntarily and
of your own free will and assent to all of the terms and conditions
contained herein.
22. Any disputes or controversies relating to this Agreement shall be
interpreted under the laws of the State of New York without regard to
conflicts laws principles thereof. If at any time after the date of the
execution of this Agreement, any provision of this Agreement shall be held
by any court of competent jurisdiction to be illegal, void, or
unenforceable, such provision, however, shall have no effect upon and shall
not impair the enforceability of any other provision of this Agreement,
provided that upon a finding by a court of competent jurisdiction that the
General Releases given by you are illegal and/or unenforceable, you shall
be required to sign a valid release embodying substantially the same terms
of the General Releases contained herein or, if you fail to do so, be
required to pay Ambac all amounts paid to you or on your behalf by Ambac
pursuant to this Agreement.
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23. This Agreement constitutes the complete understanding between the parties.
No other promises or agreements shall be binding unless in writing and
signed by the parties.
/s/ Joseph Salzano 12/29/99
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Joseph V. Salzano Date
Ambac Financial Group, Inc.
Ambac Assurance Corporation
By: /s/ Gregg Bienstock 12/29/99
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Gregg L. Bienstock, Managing Director Date
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Exhibit A
In consideration of the payments and other valuable consideration as set
forth in the Agreement and General Release entered into by Ambac and Joseph V.
Salzano on December __, 1999:
Joseph V. Salzano, for himself and for his heirs, executors,
administrators, trustees, legal representatives and assigns (hereinafter
collectively referred to as the "Releasors"), hereby releases and discharges
Ambac, and any and all of its parent corporations, shareholders, subsidiaries,
divisions, affiliated and related entities, employee benefit and/or pension
plans or funds, successors and assigns, and any and all of its or their past,
present or future officers, directors, agents, stockholders, trustees,
fiduciaries, administrators, employees or assignees (whether acting as agents
for Ambac or in their individual capacities) (hereinafter collectively referred
to as "Releasees"), of and from any and all claims, demands, causes of action,
and liabilities of any kind whatsoever, whether known or unknown, whether
arising in law or in equity or arising out of any Federal, state or city
constitution, statute, ordinance, bylaw or regulation (including but not limited
to, all common law claims, all claims arising under the Age Discrimination in
Employment Act of 1967, the Older Workers Benefit Protection Act, Title VII of
the Civil Rights Act of 1964, as amended, the New York State Human Rights Law,
the New York City Administrative Code, and the like) or by reason of any act,
omission, transaction, conduct or occurrence up to and including the date of
this Exhibit A, which you ever had, now have or hereafter can, shall or may have
against the Releasees for, upon or by reason of any act, omission, transaction
or occurrence, up to and including the date of this General Release.
____________________________________ _________
Joseph V. Salzano Date
Ambac Financial Group, Inc.
Ambac Assurance Corporation
By: _______________________________ _________
Gregg L. Bienstock, Managing Director Date