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Stock Compensation
 12 Months Ended
Dec. 31, 2011
Stock Compensation [Abstract]  
Stock Compensation

16        STOCK COMPENSATION

Employees of Ambac participated in Ambac Financial Group Inc.'s 1997 Equity Plan, which provides for the granting of stock options, stock appreciation rights, restricted stock units, performance units and other awards that are valued or determined by reference to its common stock.

Stock Options:

Stock options awarded to eligible employees are exercisable and expire as specified at the time of grant. Such options are awarded based on the fair market value of Ambac's Common Stock on the grant date and have a term of seven years from the date of the grant. All employee stock option agreements provide that vesting is accelerated in certain circumstances, such as upon retirement, permanent disability or death. No stock options were granted in 2011 and 2010.

 

A summary of option activity for the period ending December 31, 2011 is as follows:

 

     Shares     Weighted
Average
Exercise Price		      Aggregate
Intrinsic  Value		      Weighted
Average
Remaining
Contractual
Life		  

Outstanding at beginning of year

      2,607,763      $ 46.98         

Granted

      0        na.         

Exercised

      0        na.         

Forfeited or expired

      (1,468,334 )    $ 48.39         
  

 

 

          

Outstanding at end of year

      1,139,429      $ 45.15       $ 0         2.12   
  

 

 

          

Exercisable

      954,379      $ 37.76       $ 0         0.29   
  

 

 

    

 

 

     

 

 

     

 

 

  

As of December 31, 2011, there was $0 of total unrecognized compensation costs related to unvested stock options granted. Gross stock option expense for 2011 and 2010 was ($12,576) and $1,825, respectively. The net income effect from stock options for 2011 and 2010 were ($11,297) and $4,033, respectively. This includes a $12,597 reduction in expenses due to stock option forfeitures in 2011.

All options outstanding at December 31, 2011 are fully exercisable by January 29, 2012.

RSUs and Restricted Stock:

RSUs were granted to all eligible employees based upon the performance of Ambac, the performance of the employee's department and the performance of the employee. RSUs do not have a vesting period in excess of four years. Typically, RSU agreements provide that vesting is accelerated in certain circumstances, such as retirement, permanent disability or death. No RSUs were granted during 2011.

As of December 31, 2011, 113,739 RSUs remained outstanding, of which (i) 75,297 units required future service as a condition to the delivery of the underlying shares of common stock and (ii) 38,442 units did not require future service.

Information with respect to the RSU and other stock awards is as follows:

 

     2011     2010  

RSUs and other stock awarded

    $ 0      $ 181,702   

Weighted average fair value per share

    $ 0      $ 0.69   

Gross RSU (benefit) expense

    $ (2,988 )    $ 3,538   

Net income effect

    $ (1,163 )    $ 5,212   

 

The RSU (benefit) expense includes $3,309 reductions in expenses due to RSU forfeitures in 2011. A summary of RSU and other stock activity for 2011 is as follows:

 

     2011  
     Shares     Weighted
Average
Grant Date
Fair Value		  

Outstanding at beginning of year

      1,026,728      $ 10.61   

Granted

      0      $ 0   

Delivered

      (538,208 )    $ 10.94   

Forfeited

      (374,781 )    $ 5.12   
  

 

 

    

Outstanding at end of year

      113,739      $ 23.96   
  

 

 

    

As of December 31, 2011, there was $0 of total unrecognized compensation costs related to unvested RSUs granted. The fair value for RSUs vested during 2011 and 2010 was $93 and $52, respectively.