Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
Amended and Restated Bylaws
On January 26, 2023, the Board of Directors (the "Board") of Ambac Financial
Group, Inc. ("AFG") approved certain amendments to AFG's By-laws (the
"By-laws"), effective as of such date. The amendments are set forth in Amended
and Restated By-laws approved by the Board (the "Amended and Restated By-laws")
and filed as Exhibit 2.1 to this Current Report on Form 8-K. The amendments
effected by the Amended and Restated By-laws, among other things, provide for
majority voting in uncontested elections, and address the U.S. Securities and
Exchange Commission ("SEC") rules and regulations regarding universal proxy
cards set forth in Rule 14a-19 of the Securities Exchange Act of 1934, as
amended (the "Universal Proxy Card Rules").
In particular, the following changes to the By-laws were approved:
1.The provisions of the By-laws governing voting at of meetings of stockholders
were amended to provide for a majority voting standard in the election of
directors in uncontested elections from a plurality voting standard. If a
Director in an uncontested election does not receive a majority of votes cast
for his or her election, such Director shall, within ten (10) business days of
certification of election results, submit to the Board a letter of resignation
for consideration by the Governance and Nominating Committee. The Governance and
Nominating Committee shall promptly assess the appropriateness of such nominee's
continuing to serve as a Director and recommend to the Board the action to be
taken with respect to such tendered resignation. The Board will determine
whether to accept or reject such resignation within ninety (90) days from the
date of the certification of election results. The plurality voting standard was
retained for contested director elections.
2.The provisions of the By-laws were also amended to update the procedures and
disclosure requirements for the nomination of director nominees for election at
meetings of stockholders, including to require additional information in a
notice of nomination submitted by a stockholder and to address the adoption of
the Universal Proxy Card Rules. The amendments also require that nominating
stockholders comply with the Universal Proxy Card Rules, including the
requirement to solicit proxies from holders of AFG's outstanding capital stock
representing at least sixty seven percent (67%) of the voting power of AFG's
capital stock entitled to vote on the election of Directors.
3.The provisions of the By-laws relating to the list of stockholders entitled to
vote at meetings of stockholders were revised to reflect recent amendments to
the Delaware General Corporation Law that eliminate the requirement that AFG
make its stockholder list available for inspection during a meeting of
stockholders.
4.Additional amendments and conforming changes were made that do not materially
affect the substance of the By-laws.
The foregoing description of the amendments to AFG's By-laws is only a summary,
does not purport to be complete, and is qualified in its entirety by reference
to the full text of the Amended and Restated By-laws, which are filed as Exhibit
2.1 to this Current Report on Form 8-K and are incorporated into this filing by
reference
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number Item
2.1 Amended and Restated Bylaws dated January 26, 2023
Forward-Looking Statements
In this report, statements that may constitute "forward-looking statements"
within the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Words such as "estimate," "project," "plan,"
"believe," "anticipate," "intend," "planned," "potential" and similar
expressions, or future or conditional verbs such as "will," "should," "would,"
"could," and "may," or the negative of those expressions or verbs, identify
forward-looking statements. We caution readers that these statements are not
guarantees of future performance. Forward-looking statements are not historical
facts but instead represent only our beliefs regarding future events, which may
by their nature be inherently uncertain and some of which may be outside our
control. These statements may relate to plans and objectives with respect to the
future, among other things which may change. We are alerting you to the
possibility that our actual results may differ, possibly materially, from the
expected objectives or anticipated results that may be suggested, expressed or
implied by these forward-looking statements. Important factors that could cause
our results to differ, possibly materially, from those indicated in the
forward-looking statements include, among others, those discussed under "Risk
Factors" in our most recent SEC filed quarterly or annual report.
Any or all of management's forward-looking statements here or in other
publications may turn out to be incorrect and are based on management's current
belief or opinions. Ambac Financial Group's ("AFG") and its subsidiaries'
(collectively, "Ambac" or the "Company") actual results may vary materially, and
there are no guarantees about the performance of Ambac's securities. Among
events, risks, uncertainties or factors that could cause actual results to
differ materially are: (1) the highly speculative nature of AFG's common stock
and volatility in the price of AFG's common stock; (2) uncertainty concerning
the Company's ability to achieve value for holders of its securities, whether
from Ambac Assurance Corporation ("AAC") and its subsidiaries or from the
specialty property and casualty program insurance business, the insurance
distribution business, or related businesses; (3) inadequacy of reserves
established for losses and loss expenses and possibility that changes in loss
reserves may result in further volatility of earnings or financial results; (4)
potential for rehabilitation proceedings or other regulatory intervention
against AAC; (5) credit risk throughout Ambac's business, including but not
limited to credit risk related to insured residential mortgage-backed
securities, student loan and other asset securitizations, public finance
obligations (including risks associated with Chapter 9 and other restructuring
proceedings), issuers of securities in our investment portfolios, and exposures
to reinsurers; (6) our inability to effectively reduce insured financial
guarantee exposures or achieve recoveries or investment objectives; (7) our
inability to generate the significant amount of cash needed to service our debt
and financial obligations, and our inability to refinance our indebtedness; (8)
Ambac's substantial indebtedness could adversely affect its financial condition
and operating flexibility; (9) Ambac may not be able to obtain financing or
raise capital on acceptable terms or at all due to its substantial indebtedness
and financial condition; (10) the impact of catastrophic public health,
environmental or natural events, including events like the COVID-19 pandemic, or
global or regional conflicts, on significant portions of our insured portfolio;
(11) failure to recover claims paid on Puerto Rico exposures or realization of
losses in amounts higher than expected; (12) credit risks related to large
single risks, risk concentrations and correlated risks; (13) risks associated
with adverse selection as Ambac's financial guarantee insurance portfolio runs
off; (14) the risk
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that Ambac's risk management policies and practices do not anticipate certain
risks and/or the magnitude of potential for loss; (15) restrictive covenants in
agreements and instruments that impair Ambac's ability to pursue or achieve its
business strategies; (16) adverse effects on operating results or the Company's
financial position resulting from measures taken to reduce financial guarantee
risks in its insured portfolio; (17) disagreements or disputes with Ambac's
insurance regulators; (18) loss of control rights in transactions for which we
provide financial guarantee insurance; (19) adverse tax consequences or other
costs resulting from the characterization of the AAC's surplus notes or other
obligations as equity; (20) risks attendant to the change in composition of
securities in the Ambac's investment portfolio; (21) adverse impacts from
changes in prevailing interest rates; (22) events or circumstances that result
in the impairment of our intangible assets and/or goodwill that was recorded in
connection with Ambac's acquisition of 80% of the membership interests of
Xchange Benefits, LLC; (23) risks associated with the expected discontinuance of
the London Inter-Bank Offered Rate; (24) factors that may negatively influence
the amount of installment premiums paid to Ambac; (25) risks relating to
determinations of amounts of impairments taken on investments; (26) the risk of
litigation and regulatory inquiries or investigations, and the risk of adverse
outcomes in connection therewith; (27) actions of stakeholders whose interests
are not aligned with broader interests of Ambac's stockholders; (28) system
security risks, data protection breaches and cyber attacks; (29) regulatory
oversight of Ambac Assurance UK Limited ("Ambac UK") and applicable regulatory
restrictions may adversely affect our ability to realize value from Ambac UK or
the amount of value we ultimately realize; (30) failures in services or products
provided by third parties; (31) our inability to attract and retain qualified
executives, senior managers and other employees, or the loss of such personnel;
(32) fluctuations in foreign currency exchange rates; (33) failure to realize
our business expansion plans or failure of such plans to create value; (34)
greater competition for our specialty property & casualty program insurance
business; (35) loss or lowering of the AM Best rating for our property and
casualty insurance company subsidiaries; (36) disintermediation within the
insurance industry or greater competition that negatively impacts our managing
general agency/underwriting business; (37) changes in law or in the functioning
of the healthcare market that impair the business model of our accident and
health managing general underwriter; and (38) other risks and uncertainties that
have not been identified at this time.
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