Exhibit 10.5
2007 STOCK INCENTIVE PLAN
OF
SPECIALTY UNDERWRITERS’ ALLIANCE, INC.
RESTRICTED STOCK AGREEMENT
AGREEMENT made as of ___, 20___, by and between SPECIALTY UNDERWRITERS’
ALLIANCE, INC., a Delaware corporation (the “Company”), and ___ (the
“Recipient”).
W I T N E S S E T H :
WHEREAS, the Company has adopted the 2007 Stock Incentive Plan of Specialty
Underwriters’ Alliance, Inc. (the “Stock Incentive Plan”) pursuant to which
shares of the Company’s common stock (“Shares”) may be awarded to employees and
directors of, and consultants and independent contractors used by, the Company
and its Subsidiaries; and
WHEREAS, the Company has granted to the Recipient a restricted stock award
pursuant to the Stock Incentive Plan; and
WHEREAS, it is intended that this Agreement shall set forth the terms,
conditions and restrictions imposed with respect to said restricted stock award;
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:
FIRST: Pursuant to the Stock Incentive Plan, the Recipient has been awarded on
___, 20___ (the “Award Date”), a restricted stock award with respect to ___
Shares (the “Restricted Stock Award” and such Shares, the “Restricted Shares”),
subject to the terms, conditions and restrictions set forth in the Stock
Incentive Plan and in this Agreement. [The purchase price payable for the
Restricted Shares shall be $  per Share, payable by cash, or by check to the
order of the Company, within 30 days after the Award Date. [TO BE INCLUDED ONLY
IF A PURCHASE PRICE IS TO BE PAID.]]

 

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SECOND: Restrictions shall be imposed on a transfer of the Restricted Shares and
such Shares shall be subject to risk of forfeiture, as follows:
Item 3: (a) Except as otherwise provided pursuant to the Plan [or as set forth
in the Employment Agreement dated as of ______between the Company and the
Recipient (the “Employment Agreement”)], the Shares issued pursuant to the
Restricted Stock Award shall become vested as follows: [ADD VESTING RATE],
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’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 FOURTH. For purposes hereof, “Retirement” shall mean the Recipient’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 17, 2004 (subject to waiver by the Committee), and where the sum
of the Recipient’s age and years of service as of the date of such retirement
exceeds 65 years, provided that (unless waived by the Committee for medical or
other unforeseen exigencies) the Recipient shall have given at least nine
months’ advance written notice to the Company of such retirement. If the
Recipient’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’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.
Item 4: (b) 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.
THIRD: 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 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

 

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Shares to be transferred back to the Company in the event of a forfeiture
pursuant to Paragraph 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’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.
FOURTH: The Recipient hereby agrees to restrictive covenants, and remedies for
any breach thereof, as follows:
Item 5: (a) The Recipient hereby acknowledges and recognizes that during the
Recipient’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’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’s Affiliates to, except with
the Company’s prior written consent, during the period in which any of the
Restricted Shares continue to be subject to becoming vested (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 this Paragraph FOURTH shall prohibit the Recipient or any of the
Recipient’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, “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 controlled 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.

 

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Item 6: (b) During the Non-Competition Period, the Recipient shall not, and
shall not permit any of the Recipient’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.
Item 7: (c) During the Non-Competition Period, the Recipient shall not, and
shall not permit any of the Recipient’s 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.
Item 8: (d) The Recipient covenants that the Recipient will not, directly or
indirectly at any time during or after the Recipient’s employment or service
with the Company or any Subsidiary, disparage the Company or any of its
shareholders, directors, officers, employees, or agents.
Item 9: (e) The Recipient understands that the foregoing restrictions may limit
the Recipient’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’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.
Item 10: (f) It is the desire and intent of the Company and the Recipient that
the provisions of this Paragraph 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 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.

 

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Item 11: (g) It is understood by the Company and the Recipient that the
Recipient’s obligations and the restrictions and remedies set forth in this
Paragraph FOURTH are essential elements of this Agreement and that but for the
Recipient’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 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 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 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 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 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 FOURTH.
FIFTH: 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) deduct from any cash
payment otherwise due to the Recipient, the appropriate withholding amount,
(ii) require the Recipient to make payment in cash to the Company (or
Subsidiary) in such amount as is required to be withheld, (iii) 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.

 

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SIXTH: 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 [(or by reference to the Employment
Agreement)] shall have the same definitions as set forth in the Stock Incentive
Plan.
SEVENTH: 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.
EIGHTH: 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.
NINTH: 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.

 

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TENTH: 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. 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.
ELEVENTH: This Agreement, together with the Stock Incentive Plan, constitutes
the entire agreement between the parties hereto with respect to the Restricted
Stock Award.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth above.

            SPECIALTY UNDERWRITERS’ ALLIANCE, INC.
      By:                        

Acknowledged and agreed to:

     
 
[Name of Recipient]
   

 

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