Specialty Underwriters Alliance, Inc.
EXHIBIT 10.5
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<TYPE>EX-10.5
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<FILENAME>c71412exv10w5.htm
<DESCRIPTION>EXHIBIT 10.5
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<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Exhibit&nbsp;10.5
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">2007 STOCK INCENTIVE PLAN<BR>
OF<BR>
SPECIALTY UNDERWRITERS&#146; ALLIANCE, INC.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><U>RESTRICTED STOCK AGREEMENT</U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">AGREEMENT made as of &#95;&#95;&#95;, 20&#95;&#95;&#95;, by and between SPECIALTY UNDERWRITERS&#146; ALLIANCE, INC.,
a Delaware corporation (the &#147;Company&#148;), and &#95;&#95;&#95; (the &#147;Recipient&#148;).
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt">W I T N E S S E T H :
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, the Company has adopted the 2007 Stock Incentive Plan of Specialty Underwriters&#146;
Alliance, Inc. (the &#147;Stock Incentive Plan&#148;) pursuant to which shares of the Company&#146;s common stock
(&#147;Shares&#148;) may be awarded to employees and directors of, and consultants and independent
contractors used by, the Company and its Subsidiaries; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, the Company has granted to the Recipient a restricted stock award pursuant to the
Stock Incentive Plan; and
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">WHEREAS, it is intended that this Agreement shall set forth the terms, conditions and
restrictions imposed with respect to said restricted stock award;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">NOW, THEREFORE, in consideration of the mutual covenants herein contained and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>FIRST</U>: Pursuant to the Stock Incentive Plan, the Recipient has been awarded on
&#95;&#95;&#95;, 20&#95;&#95;&#95; (the &#147;Award Date&#148;), a
restricted stock award with respect to &#95;&#95;&#95; Shares (the
&#147;Restricted Stock Award&#148; and such Shares, the &#147;Restricted Shares&#148;), subject to the terms,
conditions and restrictions set forth in the Stock Incentive Plan and in this Agreement. &#091;The
purchase price payable for the Restricted Shares shall be $&nbsp;&nbsp;per Share, payable by cash, or by
check to the order of the Company, within 30&nbsp;days after the Award Date. &#091;TO BE INCLUDED ONLY IF A
PURCHASE PRICE IS TO BE PAID.&#093;&#093;
</DIV>
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<P align="center" style="font-size: 10pt">1
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>SECOND</U>: Restrictions shall be imposed on a transfer of the Restricted Shares and such
Shares shall be subject to risk of forfeiture, as follows:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Item&nbsp;3: (a)&nbsp;Except as otherwise provided pursuant to the Plan &#091;or as set forth in the
Employment Agreement dated as of &#95;&#95;&#95;&#95;&#95;&#95;between the Company and the Recipient (the
&#147;Employment Agreement&#148;)&#093;, the Shares issued pursuant to the Restricted Stock Award shall become
vested as follows: &#091;ADD VESTING RATE&#093;, provided the Recipient is still in the employ or service of
the Company or a Subsidiary on each such respective vesting date. In addition, in the event of the
Recipient&#146;s Retirement (as defined below) prior to the date on which the Restricted Shares have
become vested, then the Restricted Shares shall continue to vest in accordance with the foregoing
provisions as if the Recipient were still in the employ or service of the Company or a Subsidiary,
provided that the Recipient continues to comply with the restrictive covenants set forth in
Paragraph&nbsp;FOURTH. For purposes hereof, &#147;Retirement&#148; shall mean the Recipient&#146;s retirement from the
Company (or a Subsidiary) at or after age 55 and the completion of at least five years of service
with the Company (or a Subsidiary) after November&nbsp;17, 2004 (subject to waiver by the Committee),
and where the sum of the Recipient&#146;s age and years of service as of the date of such retirement
exceeds 65&nbsp;years, provided that (unless waived by the Committee for medical or other unforeseen
exigencies) the Recipient shall have given at least nine months&#146; advance written notice to the
Company of such retirement. If the Recipient&#146;s employment with the Company and its Subsidiaries
terminates prior to the date on which the Restricted Shares become vested, or if, after the
Recipient&#146;s Retirement, the Recipient breaches the restrictive covenants set forth in Paragraph
FOURTH, any Restricted Shares (and any dividends, distributions and adjustments with respect
thereto) which were not theretofore vested shall be forfeited.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Item&nbsp;4: (b)&nbsp;Any other applicable restrictions or conditions under the requirements of any
stock exchange upon which the Restricted Shares or shares of the same class are then listed, and
under any securities law applicable to such Restricted Shares, shall be imposed.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>THIRD</U>: Restrictions shall be imposed on a transfer of the Restricted Shares, and the
Company shall place a stop order with the transfer agent against any transfer of such Shares and
shall retain the stock certificate representing such Shares, until such time as the Restricted
Shares shall become vested in accordance with Paragraph&nbsp;SECOND. In addition, the Recipient shall
execute and deliver to the Company, at the same time as this Agreement is executed and delivered by
the Recipient, an undated stock power, to enable the Company to cause Restricted
</DIV>

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<P align="center" style="font-size: 10pt">2
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Shares to be transferred back to the Company in the event of a forfeiture pursuant to
Paragraph&nbsp;SECOND (or for tax withholding purposes pursuant to paragraph FIFTH.) Prior to the lapse
of the restrictions on the transferability of the Restricted Shares, the Recipient shall have all
other rights and privileges of a beneficial and record owner with respect to such Shares,
including, without limitation, voting rights and the right to receive dividends, distributions and
adjustments with respect to such Shares; provided, however, that any dividends, distributions and
adjustments with respect to the Restricted Shares shall be retained by the Company for the
Recipient&#146;s account and for delivery to the Recipient, together with the stock certificate
representing such Shares, only as and when such Restricted Shares have become vested.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>FOURTH</U>: The Recipient hereby agrees to restrictive covenants, and remedies for any
breach thereof, as follows:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Item&nbsp;5: (a)&nbsp;The Recipient hereby acknowledges and recognizes that during the Recipient&#146;s
employment or service with the Company or a Subsidiary, the Recipient will be privy to trade
secrets and confidential information critical to the Company&#146;s business and that the Company would
find it extremely difficult or impossible to replace the Recipient. Accordingly, the Recipient
agrees that, in consideration of the grant of the Restricted Stock Award and the continued vesting
of the Restricted Shares as provided in this Agreement, the Recipient will not, and will not permit
any of the Recipient&#146;s Affiliates to, except with the Company&#146;s prior written consent, during the
period in which any of the Restricted Shares continue to be subject to becoming vested (the
&#147;Non-Competition Period&#148;), engage, directly or indirectly, whether as an employee, officer,
director, consultant or otherwise, in any activity that competes with the Company or any of its
Affiliates in the business of insurance. Nothing in this Paragraph&nbsp;FOURTH shall prohibit the
Recipient or any of the Recipient&#146;s Affiliates from owning for passive investment purposes less
than 5% of the publicly traded securities of any corporation listed on the New York Stock Exchange
or the American Stock Exchange or the NASDAQ. For purposes hereof, &#147;Affiliate&#148; means, with respect
to any person or entity, any other person or entity who directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common control with such person or entity;
&#147;control&#148; means the power, directly or indirectly, to direct or cause the direction of the
management and policies of a person or entity whether through ownership of voting securities, by
contract or otherwise.
</DIV>
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<P align="center" style="font-size: 10pt">3
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Item&nbsp;6: (b)&nbsp;During the Non-Competition Period, the Recipient shall not, and shall not permit
any of the Recipient&#146;s Affiliates to, directly or indirectly, solicit, whether as an employee,
officer, director, consultant or otherwise, any person or entity which is then a customer or party
to any insurance-related contract with the Company and/or its Affiliates or has been a customer or
supplier or such a party or solicited by the Company and/or its Affiliates in the preceding
two-year period, to divert their business to any entity other than the Company and/or its
Affiliates.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Item&nbsp;7: (c)&nbsp;During the Non-Competition Period, the Recipient shall not, and shall not permit
any of the Recipient&#146;s Affiliates to, directly or indirectly, (i)&nbsp;solicit for employment, engage
and/or hire, whether directly or indirectly, any person who is then employed by the Company and/or
its Affiliates or engaged by the Company and/or its Affiliates as an independent contractor or
consultant; and/or (ii)&nbsp;encourage or induce, whether directly or indirectly, any person who is then
employed by the Company and/or its Affiliates or engaged by the Company and/or its Affiliates as an
independent contractor or consultant to end his/her business relationship with the Company and/or
its Affiliates.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Item&nbsp;8: (d)&nbsp;The Recipient covenants that the Recipient will not, directly or indirectly at
any time during or after the Recipient&#146;s employment or service with the Company or any Subsidiary,
disparage the Company or any of its shareholders, directors, officers, employees, or agents.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Item&nbsp;9: (e)&nbsp;The Recipient understands that the foregoing restrictions may limit the
Recipient&#146;s ability to earn a livelihood in a business similar to the business of the Company, but
the Recipient nevertheless believes that the Recipient has received and will receive sufficient
consideration and other benefits as an employee or other service provider of the Company or a
Subsidiary and as otherwise provided hereunder to clearly justify such restrictions which, in any
event (given the Recipient&#146;s education, skills and ability), the Recipient does not believe would
prevent the Recipient from earning a living other than in a business which competes with the
Company.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Item&nbsp;10: (f)&nbsp;It is the desire and intent of the Company and the Recipient that the provisions
of this Paragraph&nbsp;FOURTH shall be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any
particular provision of this Paragraph&nbsp;FOURTH is adjudicated to be invalid or unenforceable or
shall for any reason be held to be excessively broad as to
duration, geographic scope, activity or subject, it shall be construed by limiting and
reducing it, so as to be enforceable to the extent compatible with applicable law and such
provision shall be deemed modified and amended to the extent necessary to render such provision
enforceable in such jurisdiction.
</DIV>
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<P align="center" style="font-size: 10pt">4
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Item&nbsp;11: (g)&nbsp;It is understood by the Company and the Recipient that the Recipient&#146;s
obligations and the restrictions and remedies set forth in this Paragraph&nbsp;FOURTH are essential
elements of this Agreement and that but for the Recipient&#146;s agreement to comply with and/or agree
to such obligations, restrictions and remedies, the Company would not have granted the Restricted
Stock Award to the Recipient or entered into this Agreement. The Recipient acknowledges and
understands that the provisions of this Paragraph&nbsp;FOURTH are of a special and unique nature, the
loss of which cannot be adequately compensated for in damages by an action at law, and that the
breach or threatened breach of the provisions of this Paragraph&nbsp;FOURTH would cause the Company
irreparable harm. In the event of a breach or threatened breach by the Recipient of the provisions
of this Paragraph&nbsp;FOURTH, the Company shall be entitled to an injunction restraining the Recipient
from such breach or other equitable relief, without posting a bond, in addition to other remedies
available to the Company. In the event of a breach by the Recipient of the provisions of this
Paragraph&nbsp;FOURTH, the term of the Non-Competition Period shall be extended by the period of the
duration of such breach. All remedies available for breach of this Paragraph&nbsp;FOURTH are
cumulative, and neither the pursuit of any remedy nor anything contained in this Agreement shall be
construed as an election of a remedy or as prohibiting the Company from or limiting the Company in
pursuing any other remedies available for any breach or threatened breach of this Paragraph&nbsp;FOURTH.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>FIFTH</U>: If, with respect to the Restricted Shares (and any dividends, distributions and
adjustments to such Shares), the Company (or a Subsidiary) shall be required to withhold amounts
under applicable federal, state or local tax laws, rules or regulations, the Company (or
Subsidiary) shall be entitled to take such action as it deems appropriate in order to ensure
compliance with such withholding requirements and may, at its election, (i)&nbsp;deduct from any cash
payment otherwise due to the Recipient, the appropriate withholding amount, (ii)&nbsp;require the
Recipient to make payment in cash to the Company (or Subsidiary) in such amount as is required to
be withheld, (iii)&nbsp;have the Company withhold such number of Restricted Shares as shall have a Fair
Market Value, valued on the date on which such withholding requirement arises, equal to the amount
required to be withheld (provided that this shall only apply to, and the Company shall only
withhold, Restricted Shares that have become vested), or (iv)
deliver to the Company Shares already owned by the Recipient for at least six months and
having a Fair Market Value, valued on the date on which such withholding requirement arises, equal
to the amount required to be withheld.
</DIV>
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<P align="center" style="font-size: 10pt">5
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>SIXTH</U>: The Company and the Recipient each hereby agree to be bound by the terms and
conditions set forth in the Stock Incentive Plan, which terms and conditions are hereby
incorporated by reference. Any capitalized terms used in this Agreement which are not defined
herein &#091;(or by reference to the Employment Agreement)&#093; shall have the same definitions as set forth
in the Stock Incentive Plan.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>SEVENTH</U>: This Agreement shall not be construed as giving the Recipient any rights to
be retained by, or in the employ or service of, the Company (or any of its Subsidiaries), or any
other employment rights or relationship.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>EIGHTH</U>: This Agreement shall inure to the benefit of, and be binding on, the Company
and its successors and assigns, and shall inure to the benefit of, and be binding on, the Recipient
and his heirs, executors, administrators and legal representatives. This Agreement shall not be
assignable by the Recipient.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>NINTH</U>: Each provision of this Agreement is intended to be severable. If any term or
provision hereof is held by a court of competent jurisdiction to be illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity of the remaining
provisions of this Agreement, which shall continue in full force and effect.
</DIV>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>TENTH</U>: Except as required by Delaware corporate law, this Agreement shall be subject
to, and construed in accordance with, the laws of the State of Illinois without giving effect to
principles of conflicts of law. The Company and the Recipient each hereby consent to the personal
jurisdiction and venue of the state (and federal, if applicable) courts in the State of Illinois,
for resolution of all disputes and causes of action arising out of the Stock Incentive Plan, the
Restricted Stock Award or this Agreement, and the Company and the Recipient each hereby waive all
questions of personal jurisdiction and venue of such courts, including, without limitation, the
claim or defense therein that such courts constitute an inconvenient forum. <B>THE COMPANY AND THE
RECIPIENT EACH HEREBY WAIVE THEIR RESPECTIVE RIGHT TO A JURY TRIAL IN ANY ACTION ARISING OUT OF THE
STOCK INCENTIVE PLAN, THE RESTRICTED STOCK AWARD OR THIS AGREEMENT.</B>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><U>ELEVENTH</U>: This Agreement, together with the Stock Incentive Plan, constitutes the
entire agreement between the parties hereto with respect to the Restricted Stock Award.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set
forth above.
</DIV>

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<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left" nowrap>SPECIALTY UNDERWRITERS&#146; ALLIANCE, INC.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
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&nbsp;</TD>
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<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Acknowledged and agreed to:
</DIV>

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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
&#091;Name of Recipient&#093;
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<P align="center" style="font-size: 10pt">7
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