CHANGE IN CONTROL AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT (the “Agreement”) made as of April 7, 2008
between Specialty Underwriters’ Alliance, Inc., a Delaware corporation, and its
subsidiaries and affiliates (the “Company”), and Daniel J. Rohan (the
“Employee”).
W I T N E S S E T H:
WHEREAS, the Employee has had a valued association with the Company and on the
date hereof is a Vice President and the Controller of the Company; and
WHEREAS, the Employee’s expertise and service to the Company have been of an
extraordinary character and of particular importance to the Company; and
WHEREAS, the Company wishes to retain the Employee’s services and allow him to
devote his undivided attention to the affairs of the Company by providing a
benefit to the Employee in the event of a “change in control” of the Company;
NOW, THEREFORE, for the reasons set forth above, and in consideration of the
mutual covenants and promises of the parties hereto, the Company and the
Employee agree as follows:
SECTION ONE
SEVERANCE BENEFITS
(A) If the Employee’s employment is terminated by the Company without Cause or
the Employee terminates his employment for Good Reason upon or within
twenty-four months following the occurrence of a Change in Control (such
twenty-four-month period following the occurrence of the Change in Control being
hereinafter referred to as the “Benefit Trigger Period”), the following benefits
shall be provided to the Employee:
(i) The Company shall pay to the Employee an amount equal to the sum of (a) the
Employee’s annual base salary and (b) any unreimbursed business expenses or
other amounts due to the Employee from the Company as of the Employee’s date of
termination.
(ii) All stock options, restricted stock awards or other types of equity-based
compensation then held by the Employee which were not previously vested or
exercisable shall become fully vested and/or exercisable, as of the date of such
termination of employment.
In consideration of the above benefits, and as a condition of the receipt
thereof, the Employee agrees to execute a release releasing the Company and its
Affiliates from all actions, claims, demands, causes of action, obligations,
damages, liabilities, expenses and controversies of any

 

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nature, excluding those arising in connection with the enforcement of the
Employee’s indemnification rights (if any).
(B) If, within the Benefit Trigger Period, the Employee’s employment is
terminated by the Company for Cause, by the Employee without Good Reason, or
because of the Employee’s death or Disability, or if such employment is
terminated for any reason following the expiration of the Benefit Trigger
Period, no benefits shall be provided to the Employee pursuant to this
Agreement.
(C) For purposes of this Agreement, the following terms shall have the meanings
set forth below, unless the context clearly indicates otherwise:
(i) “Affiliate” means, with respect to any person or entity, any other person or
entity who directly or indirectly through one or more intermediaries controls,
is cotnrolled by, or is under common control with such person or entity;
“control” 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.
(ii) “Change in Control” shall mean the occurrence of any of the following:
(a) any “person” or group of “persons” (as the term “person” is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) (“Person”),
acquires (or has acquired during the twelve-month period ending on the date of
the most recent acquisition by such Person) direct or indirect beneficial
ownership of securities of the Company representing 50% or more of the combined
voting power of the then outstanding securities of the Company (provided that
acquisitions by the Executive or any existing stockholder of the Company owning
more than 20% of the combined voting power of the then outstanding securities of
the Company as of the date of this Agreement shall be ignored for this purpose);
(b) a merger or consolidation of the Company with any other corporation is
consummated, other than a merger or consolidation which resulted in all or
substantially all of the holders of the Company’s voting securities immediately
prior thereto continuing to hold at least 50% of the combined voting power of
the outstanding voting securities of the Company or of the surviving entity
immediately after such merger or consolidation;
(c) the Board of Directors of the Company approves a plan of complete
liquidation of the Company or the Company is sold or all or substantially all of
the Company’s assets are sold or disposed of other than any such sale or
disposition where all or substantially all of the holders of the Company’s
voting securities immediately prior thereto continue to hold at least 50% of the
combined voting power of the outstanding voting securities of the acquiror or
transferee entity immediately after such sale or disposition; or

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(d) individuals who, on the date following the date of the Company’s 2007 annual
meeting of stockholders, are directors (the “Incumbent Board”) cease for any
reason to constitute at least a majority of the directors; provided, however,
that if the appointment or election (or nomination for election) of any new
director was approved or recommended by a majority vote of the Incumbent Board,
such new director shall be considered a member of the Incumbent Board, unless
such new director’s initial assumption of office occurs as a result of or in
connection with either an actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended) or other actual or threatened solicitation of
proxies or consents by or on behalf of an entity other than the Incumbent Board.
Notwithstanding the foregoing, for purposes of clause (a), a Change in Control
will not be deemed to have occurred if the power to control (directly or
indirectly) the management and policies of the Company is not transferred from a
Person to another Person; and, for purposes of clause (b), a Change in Control
will not be deemed to occur if the assets of the Company are transferred: (i) to
a stockholder in exchange for his stock, (ii) to an entity in which the Company
has (directly or indirectly) more than 50% ownership, or (iii) to a Person that
has (directly or directly) more than 50% ownership of the Company with respect
to its stock outstanding, or to any entity in which such Person possesses
(directly or indirectly) more than 50% ownership.
(iii) The Employee’s employment shall be deemed to have been terminated for
“Cause” if his employment is terminated because the Employee (a) has committed
an act constituting a misdemeanor involving moral turpitude or a felony under
the laws of the United States or any state or political subdivision thereof;
(b) has committed an act constituting a breach of fiduciary duty, gross
negligence or willful misconduct; (c) has engaged in conduct that violated the
Company’s then existing material internal policies or procedures and which is
detrimental to the business, reputation, character or standing of the Company or
any of its affiliates; (d) has committed an act of fraud, self dealing, conflict
of interest, dishonesty or misrepresentation; or (e) has materially breached the
duties of his employment. Notwithstanding the foregoing, termination for Cause
shall occur only if the Company shall have given written notice to the Employee
specifying the nature of the breach or behavior, and, if the termination for
Cause is pursuant to clauses (b), (c) or (e) of this subsection, the Employee
fails to correct (if correctable) such breach or behavior as soon as practicable
thereafter but no later than ten days after receipt of the applicable notice,
provided that there shall be only one notice and opportunity to correct with
respect to clauses (b), (c) or (e) of this subsection.
(iv) “Disability” shall mean the Employee is incapacitated or disabled (as
determined by a physician mutually acceptable to the Company and the Employee)
by accident, sickness or otherwise so as to render him mentally or physically
incapable of performing the services requested to be performed by him for an
aggregate period of 180 days or more during any twelve month period (whether or
not consecutive and after using up any accrued vacation time).

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(v) “Good Reason” shall mean, after written notice setting forth the alleged
Good Reason by the Employee to the Company, and the expiration of a 60-day cure
period, there continues to be: (a) a material adverse change in the Employee’s
title, position or responsibilities; and/or (b) a material reduction of the
Employee’s base salary.
SECTION TWO
PAYMENT LIMITATION
Notwithstanding any other provision of this Agreement to the contrary, if the
benefits and payments provided under this Agreement, either alone or together
with other benefits and payments which the Employee has the right to receive
either directly or indirectly from the Company or any of its affiliates, would
constitute an excess parachute payment (the “Excess Payment”) under Section 280G
of the Internal Revenue Code of 1986, as amended (the “Code”), the Employee
hereby agrees that the benefits and payments provided under this Agreement shall
be reduced (but not below zero) by the amount necessary to prevent any such
benefits and payments to the Employee from constituting an Excess Payment;
provided, however, that such reduction shall be made only if, by reason of such
reduction, the Employee’s net after-tax economic benefit shall exceed the net
after-tax economic benefit to the Employee if such reduction were not made. All
determinations required to be made under this Section Two, and the assumptions
to be utilized in arriving at such determination, shall be made by the certified
public accounting firm used for auditing purposes by the Company immediately
prior to the date of the Employee’s termination of employment or, if the parties
determine that the certified public accounting firm used for auditing purposes
by the Company immediately prior to the date of termination cannot make such
determination because of legal restrictions, the parties shall agree on a
different certified public accounting firm (such certified public accounting
firm is hereinafter referred to as the “Accounting Firm”), which shall promptly
provide detailed supporting calculations both to the Company and the Employee.
The Company shall pay all fees and expenses of the Accounting Firm.
SECTION THREE
RESTRICTIVE COVENANTS
(A) Non-Competition. The Employee hereby acknowledges and recognizes that during
the term of Employee’s employment with the Company (the “Employment Period”) he
will be privy to trade secrets and confidential information critical to the
Company’s business and that the Company would find it extremely difficult or
impossible to replace the Employee. Accordingly, Employee agrees that, in
consideration of the premises contained herein, and the consideration to be
received by the Employee hereunder, he will not and will not permit any of his
Affiliates to, except with the Company’s prior written consent, during the
Employment Period and for a period of one year after the Employment Period
(collectively the “Non-Competition Period”), 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 subsection (A) of this Section Three shall prohibit the
Employee or any of his 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.

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(B) Customer Non-Solicitation. During the Non-Competition Period, the Employee
shall not, and shall not permit any of his Affiliates to solicit, directly or
indirectly, any person or entity which (i) is currently a customer or party to
any insurance-related contract with the Company and/or its Affiliates, (ii) has
been a customer or party to any insurance-related contract with the Company
and/or its Affiliates during the two year period immediately preceding such
solicitation or (iii) was solicited by the Company and/or its Affiliates during
the two year period immediately preceding such solicitation, provided that in
the case of (B)(i) above such solicitation diverted or attempted to divert the
business of the Company and/or its Affiliates to another person or entity or in
the case of (B)(ii) and (B)(iii) above, the business solicited is business in
which the Company is currently engaged.
(C) Employee Non-Solicitation. During the Non-Competition Period, the Employee
shall not, and shall not permit any of his Affiliates to, directly or
indirectly, (i) 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) 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.
(D) Non-Disparagement of the Company. The Employee covenants that he will not,
directly or indirectly at any time during or after the Employment Period,
disparage the Company or any of its shareholders, directors, officers,
employees, or agents.
(E) Non-Disparagement of the Employee. The Company covenants that it will not,
directly or indirectly at any time during or after the Employment Period,
disparage the Executive.
(F) Acknowledgement. The Employee understands that the foregoing restrictions
may limit his ability to earn a livelihood in a business similar to the business
of the Company, but he nevertheless believes that he has received and will
receive sufficient consideration and other benefits as an employee of the
Company and as otherwise provided hereunder to clearly justify such restrictions
which, in any event (given his education, skills and ability), the Employee does
not believe would prevent him from earning a living other than in a business
which competes with the Company.
SECTION FOUR
MODIFICATION OF AGREEMENT
No waiver or modification of this Agreement or of any covenant, condition or
limitation herein contained shall be valid unless in writing and duly executed
by both parties.
SECTION FIVE
SEVERABILITY
All agreements and covenants contained herein are severable, and in the event
any of them shall be held to be invalid by any competent court, this Agreement
shall be interpreted as if such invalid agreements or covenants were not
contained herein. Nothing contained in this Agreement shall be construed so as
to require the commission of any act contrary to law, and whenever there

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is any conflict between any provision of this Agreement and any statute, law,
ordinance, order or regulation, contrary to which the parties hereto have no
legal right to contract, the latter shall prevail, but in such event any
provision of this Agreement so affected shall be curtailed and limited only to
the extent necessary to bring it within the legal requirements.
SECTION SIX
STRICT ADHERENCE
The failure of a party to insist upon strict adherence to any term of this
Agreement shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement.
SECTION SEVEN
ASSIGNMENT
This Agreement is personal to the Employee and shall not be assignable by the
Employee. The Company may assign this Agreement to any affiliate or to any
successor to all or substantially all of the business and/or assets of the
Company, whether directly or indirectly, by purchase, merger, consolidation,
acquisition of stock, or otherwise. This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns. However, any
such assignment by the Company shall still be subject to the Employee’s rights
under subsection (a) of Section One of this Agreement.
SECTION EIGHT
OTHER RIGHTS
This Agreement shall not affect or impair the rights or obligations of the
Company or the Employee under any employment agreement between the Company and
the Employee, or, except to the extent of the additional benefits provided under
subsection (a) of Section One of this Agreement (which shall be in addition to,
and not in lieu of, any other benefits to which the Employee may be entitled),
under any written plan, contract or arrangement, or pension, profit sharing or
other compensation plan.
SECTION NINE
NOTICES
All notices, claims, certificates, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given and
delivered if personally delivered or if sent by nationally recognized overnight
courier, by telecopy, or by registered or certified mail, return receipt
requested and postage prepaid, addressed, if to the Company, at Specialty
Underwriters’ Alliance, Inc., 222 South Riverside Plaza, Suite 1600, Chicago, IL
60606-5808, Facsimile: (312) 277-1800, Attention: General Counsel with a copy to
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, NY 10038, Attn:
William W. Rosenblatt, Esq., Facsimile: 212-806-6006, and if to the Employee, at
the address set forth under the name of the Employee on the signature page
hereto, or to such other address as the party to whom notice is to be given may
have furnished to the other party or parties in writing in accordance herewith.
Any such notice or communication shall be deemed to have been received (a) in
the case of personal delivery, on the date of such delivery, (b) in the case of
nationally recognized overnight courier, on the next business day after the date
when sent, (c) in the case of telecopy transmission, when

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received, and (d) in the case of mailing, on the third business day following
that on which the piece of mail containing such communication is posted. Written
notice from the Company’s Board of Directors shall constitute proper notice from
the Company in all cases relating to this Agreement.
SECTION TEN
ERISA; NON-PROPERTY INTEREST
To the extent that this Agreement is considered to be a plan for purposes of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), it shall
be considered an unfunded plan maintained primarily for the purpose of providing
benefits for a select group of management or highly compensated employees,
within the meaning of U.S. Department of Labor Regulations Section 2520.104-23
or Section 2520.104-24, as applicable. The Employee shall have solely the status
of a general unsecured creditor of the Company and this Agreement constitutes a
mere promise by the Company to make benefit payments in the future. Nothing
herein contained shall be construed to give to or vest in the Employee or any
other person now or at any time in the future, any right, title, interest or
claim in or to any specific asset, fund, reserve, account, insurance or annuity
policy or contract or other property of any kind whatsoever owned by the Company
or in which the Company may have any right, title or interest now or at any time
in the future. It is the intention of the Company and the Employee that this
Agreement be unfunded for tax purposes and for purposes of Title I of ERISA.
SECTION ELEVEN
GOVERNING LAW
This Agreement will be governed by, and construed and enforced in accordance
with, the laws of the State of Illinois without giving effect to any principles
of conflict of laws. Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting in the State of Illinois,
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY

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SECTION TWELVE
COUNTERPARTS; FACSIMILE SIGNATURES, EXECUTION AND DELIVERY
This Agreement may be executed in counterparts, each of which shall be deemed an
original, but both of which together shall constitute one and the same document,
and may be effective upon transmission of a signed facsimile by one party to the
other.
SECTION THIRTEEN
TAXES
(A) The payments and benefits under this Agreement may be compensation and as
such may be included in either the Employee’s W-2 earnings statements or 1099
statements. The Company may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(B) In the event that any cash severance benefit or other benefit under this
Agreement shall fail to satisfy the distribution requirement of
Section 409A(a)(2)(A) of the Code, as a result of the application of
Section 409A(a)(2)(B)(i) of the Code, then the payment of such benefits shall be
delayed to the minimum extent necessary so that such benefits are not subject to
the provisions of Section 409A(a)(1) of the Code, and any such payments or
benefits will be accumulated and paid or provided on the earliest permissible
date pursuant to Section 409A(a)(2)(B)(i) of the Code. The Board of Directors or
the Compensation Committee of the Company may attach conditions to or adjust the
amounts paid pursuant to this Agreement to preserve, as closely as possible, the
economic consequences that would have applied in the absence of this subsection
(B) of Section Thirteen; provided, however, that no such condition or adjustment
shall result in the payments being subject to Section 409A(a)(1) of the Code.
Awards or grants of options, restricted stock and/or other types of equity-based
compensation may contain additional provisions relating to the application of
Section 409A of the Code and to this Agreement and the payments and benefits
distributed hereunder.

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.

            SPECIALTY UNDERWRITERS’ ALLIANCE, INC.
      By:   /s/ Courtney C. Smith         Courtney C. Smith        President &
Chief Executive Officer        HOLDER
      By:   /s/ Daniel J. Rohan         Daniel J. Rohan             

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