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Employment Benefit Plans | 12 Months Ended
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Dec. 31, 2013
Postemployment Benefits [Abstract] |
Employment Benefit Plans | 17. EMPLOYMENT BENEFIT PLANS Postretirement Health Care and Other Benefits: Ambac provides postretirement and postemployment benefits, including health and life benefits covering certain employees who meet certain age and service requirements. None of the plans are currently funded. Postretirement and postemployment benefits expense was $3,445 and $2,099 in 2013 and 2012, respectively. Effective August 1, 2005, new employees were not eligible for postretirement benefits. In 2013, post retirement benefits offered to retirees was amended such that Ambac would no longer sponsor a health plan beginning in 2014. This requires retirees to purchase their own insurance policy with a portion of their premium being reimbursed by Ambac. The unfunded accumulated postretirement benefit obligation was $9,374 as of December 31, 2013. The assumed health care cost trend rates range from 8.5% in 2013, decreasing ratably to 5% in 2021. Increasing the assumed health care cost trend rate by one percentage point in each future year would increase the accumulated postretirement benefit obligation at December 31, 2013, by $1,712 and the 2013 benefit expense by $536. Decreasing the assumed health care cost trend rate by one percentage point in each future year would decrease the accumulated postretirement benefit obligation at December 31, 2013 by $1,323 and the 2013 benefit expense by $399. The following table sets forth projected benefit payments from Ambac’s postretirement plan over the next ten years for current retirees:
|  | Amount |
2014 |  |  | 299 |
2015 |  |  | 327 |
2016 |  |  | 339 |
2017 |  |  | 337 |
2018 |  |  | 358 |
All later years |  |  | 2,141 |
|  | $ | 3,801 |
The discount rate used in determining the projected benefit obligations for the postretirement plan is selected by reference to the year-end Moody’s corporate AA rate, as well as other high-quality indices with similar duration to that of the benefit plans. The rate used for the projected plan benefit obligations at the measurement date for December 31, 2013 and 2012 was 4.75% and 4.00%, respectively. Savings Incentive Plan: Substantially all employees of Ambac are covered by a defined contribution plan (the “Savings Incentive Plan”). Ambac makes employer matching contributions equal 100% of the employees’ contributions, up to 3% of such participants’ base compensation plus 50% of contributions to an additional 2% of base compensation, subject to limits set by the Internal Revenue Code. The total cost of the Savings Incentive Plan was $1,130 and $1,058 in 2013 and 2012, respectively. Stock Compensation: Employees, directors and consultants of Ambac may be eligible to participate in Ambac’s 2013 Incentive Compensation Plan (“2013 Plan”) subject to the discretion of the compensation committee of Ambac’s Board of Directors. The 2013 Plan provides for incentives and rewards that are valued or determined by reference to Ambac common stock as traded on the NASDAQ exchange. There are 4,000,000 shares of Ambac’s common stock authorized for awards under the 2013 Plan of which 3,779,146 shares are available for future grant. Employees of Ambac previously participated in Ambac Financial Group Inc.’s 1997 Equity Plan, which provided for the granting of stock options, stock appreciation rights, restricted stock units, performance units and other awards that were valued or determined by reference to its common stock. The 1997 Equity Plan was cancelled upon Ambac’s emergence from bankruptcy in 2013. No stock grants were made under the 1997 Equity Plan in 2013 or 2012. Stock Options: Stock options were awarded to directors under the 2013 Plan that will vest on April 30, 2014 and have a term of seven years from the grant date. Stock option awards to directors provide for accelerated vesting upon change in control, death or disability, or involuntary removal other than for cause (not including removal pursuant to a shareholder vote at a regularly scheduled annual meeting of shareholders). Upon voluntary resignation, the options shall vest as of the date of such resignation in an amount equal to the number of then outstanding options multiplied by a fraction, the numerator of which shall be the number of calendar days which have lapsed since the grant date and the denominator of which shall be the number of calendar days from the grant date to the one-year anniversary of the grant date. No stock options have been awarded to employees or consultants under the 2013 Plan. The Black-Scholes-Merton model was used to estimate the fair value of the service condition based stock options on the grant date. The assumptions for the 2013 stock option grant are as follows:
|  | 2013 |
Risk-free interest rate |  |  | 0.963 | %
Expected volatility |  |  | 50.2 | %
Dividend yield |  |  | 0.0 | %
Expected life |  |  | 3.33 years |
The expected volatility is based on the implied volatilities from traded options on Ambac’s stock, the historical volatility of Ambac’s stock, and the historical volatilities of our peer industry group. Peer group historical volatilities were considered due to the fact that Ambac stock has been traded for a time period less than the expected life of the options. A zero dividend yield was assumed based on the uncertainty of Ambac making dividend payments over the expected life of these options. The risk-free interest rate reflects the U.S. Treasury yield curve in effect at the time of the grant. The expected life represents the period of time that options granted are expected to be outstanding and is based on certain factors we believe will influence exercise behavior. A summary of option activity for the years ending December 31, 2013 and 2012 is as follows:
|  | Successor Ambac – 8 months Ended December 31, 2013 |
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Aggregate Intrinsic Value |  |  | Weighted Average Remaining Contractual Life |
Outstanding at beginning of period |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Granted |  |  | 66,668 |  |  |  | 20.63 |  |  | $ | 262 |  |  |  | 6.98 |
Exercised |  |  | — |  |  |  | na. |  |  |  |  |  |  |  |  |
Forfeited or expired |  |  | — |  |  |  | na. |  |  |  |  |  |  |  |  |
Outstanding at end of period |  |  | 66,668 |  |  | $ | 20.63 |  |  | $ | 262 |  |  |  | 6.98 |
Exercisable |  |  | — |  |  | $ | — |  |  | $ | — |  |  |  | na. |
|  | Predecessor Ambac – 4 months Ended April 30, 2013 |
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Aggregate Intrinsic Value |  |  | Weighted Average Remaining Contractual Life |
Outstanding at beginning of period |  |  | 602,775 |  |  |  | $41.17 |  |  |  |  |  |  |  |  |
Granted |  |  | — |  |  |  | na. |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  |  | na. |  |  |  |  |  |  |  |  |
Forfeited or expired |  |  | (602,775) |  |  |  | $41.17 |  |  |  |  |  |  |  |  |
Outstanding at end of period |  |  | — |  |  |  | na. |  |  |  | $— |  |  |  | na. |
Exercisable |  |  | — |  |  |  | $ — |  |  |  | $— |  |  |  | na. |
|  | Predecessor Ambac – December 31, 2012 |
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Aggregate Intrinsic Value |  |  | Weighted Average Remaining Contractual Life |
Outstanding at beginning of year |  |  | 1,139,429 |  |  |  | $45.15 |  |  |  |  |  |  |  |  |
Granted |  |  | — |  |  |  | na. |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  |  | na. |  |  |  |  |  |  |  |  |
Forfeited or expired |  |  | (536,654) |  |  |  | $49.63 |  |  |  |  |  |  |  |  |
Outstanding at end of year |  |  | 602,775 |  |  |  | $41.17 |  |  |  | $— |  |  |  | 1.46 |
Exercisable |  |  | 602,775 |  |  |  | $41.17 |  |  |  | $— |  |  |  | 1.46 |
As of December 31, 2013 and 2012 there were $444 and $0 of total unrecognized compensation costs related to unvested stock options granted, respectively. The 2013 costs are expected to be recognized over a weighted average period of 0.33 years. Gross stock option expense for 2013 and 2012 was $56 and $0, respectively. The net income effect from stock options for 2013 and 2012 was $56 and $0, respectively. Restricted Stock Units (“RSUs”) RSUs were awarded to employees under the 2013 Plan that will vest in two installments, 50% on the grant date and 50% on the first anniversary of the grant date. RSU awards to employees provide for accelerated vesting upon change in control or death or disability. Such employee RSUs will settle and convert into Ambac shares upon the earlier of (a) the employee’s termination of employment other than for cause and (b) the second anniversary of the applicable vesting date. RSUs were awarded to directors under the 2013 Plan that will vest on April 30, 2014. These RSUs will not settle until the respective director’s termination from the board of directors or, if earlier, upon a change in control. All RSUs provide for accelerated vesting upon a change in control, death or disability or involuntary removal other than for cause (not including removal pursuant to a shareholder vote at a regularly scheduled annual meeting of shareholders). Upon voluntary resignation, the RSUs shall vest as of the date of such resignation in an amount equal to the number of then outstanding RSUs multiplied by a fraction, the numerator of which shall be the number of calendar days which have lapsed since the grant date and the denominator of which shall be the number of calendar days from the grant date to the one-year anniversary of the grant date. As of December 31, 2013, 154,186 RSUs remained outstanding, of which (i) 113,921 units required future service as a condition to the delivery of the underlying shares of common stock and (ii) 40,265 units did not require future service. As of December 31, 2012, 104,389 RSUs remained outstanding, of which (i) 70,530 units required future service as a condition to the delivery of the underlying shares of common stock and (ii) 33,859 units did not require future service. Gross RSU expense for 2013 and 2012 was $1,051 and $0, respectively. The net income effect from RSUs for 2013 and 2012 was $1,051 and $0, respectively. Ambac’s closing share price on the grant date was used to estimate the fair value of the service condition based RSU on the grant date. Information with respect to the RSU awards is as follows:
|  | 2013 |
RSUs and other stock awarded |  |  | 155,123 |
Weighted average fair value per share |  | $ | 20.63 |
Gross RSU expense |  | $ | 1,051 |
Net income effect |  | $ | 1,051 |
A summary of RSU activity for 2013 and 2012 is as follows:
|  | Successor Ambac – 8 Months Ended December 31, 2013 |
|  | Shares |  |  | Weighted Average Grant Date Fair Value |
Outstanding at beginning of period |  |  | — |  |  | $ | — |
Granted |  |  | 155,123 |  |  | $ | 20.63 |
Delivered |  |  | (937 | ) |  | $ | 20.63 |
Forfeited |  |  | — |  |  | $ | — |
Outstanding at end of period |  |  | 154,186 |  |  | $ | 20.63 |
|  | Predecessor Ambac – 4 Months Ended April 30, 2013 |
|  | Shares |  |  | Weighted Average Grant Date Fair Value |
Outstanding at beginning of period |  |  | 104,389 |  |  | $ | 21.43 |
Granted |  |  | — |  |  | $ | — |
Delivered |  |  | (843 | ) |  | $ | 74.43 |
Forfeited |  |  | (103,546 | ) |  | $ | 20.40 |
Outstanding at end of period |  |  | — |  |  | $ | — |
|  | Predecessor Ambac – December 31, 2012 |
|  | Shares |  |  | Weighted Average Grant Date Fair Value |
Outstanding at beginning of year |  |  | 113,739 |  |  | $ | 23.96 |
Granted |  |  | — |  |  | $ | — |
Delivered |  |  | (9,350 | ) |  | $ | 52.16 |
Forfeited |  |  | — |  |  | $ | — |
Outstanding at end of year |  |  | 104,389 |  |  | $ | 21.43 |
As of December 31, 2013 and 2012, there was $2,150 and $0 of total unrecognized compensation costs related to unvested RSUs granted. These costs are expected to be recognized over a weighted average period of 0.7 years. The fair value for RSUs vested during 2013 and 2012 was $19 and $0, respectively.

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References No definition available. + Details
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