Exhibit 10.4


 


SKYWARD SPECIALTY INSURANCE GROUP, INC.


2022 LONG-TERM INCENTIVE PLAN


 



     


     


    

 


TABLE OF CONTENTS


 


		1.	History; Existence of the Plan	1



 


		2.	Purposes of the Plan	1



 


		3.	Terminology	1



 


		4.	Administration	1



 


		(a)	Administration of the Plan	1



 


		(b)	Powers of the Administrator	1



 


		(c)	Delegation of Administrative Authority	3



 


		(d)	Non-Uniform Determinations	3



 


		(e)	Limited Liability; Advisors	3



 


		(f)	Indemnification	3



 


		(g)	Effect of Administrator’s Decision	3



 


		5.	Shares Issuable Pursuant to Awards	3



 


		(a)	Initial Share Pool	3



 


		(b)	Adjustments to Share Pool	3



 


		(c)	ISO Limit	4



 


		(d)	Source of Shares	4



 


		(e)	Non-Employee Director Award Limit	4



 


		6.	Participation	5



 


		7.	Awards	5



 


		(a)	Awards, In General	5



 


		(b)	Stock Options	5



 


		(c)	Limitation on Reload Options	5



 


		(d)	Stock Appreciation Rights	5



 


		(e)	Repricing	6



 


		(f)	Stock Awards	6



 


		(g)	Stock Units	7



 


		(h)	Performance Shares and Performance Units	8



 


		(i)	Other Stock-Based Awards	9



 


		(j)	Awards to Participants Outside the United States	9



 


		(k)	Limitation on Dividend Reinvestment and Dividend Equivalents	9



 


		8.	Withholding of Taxes	9



 


		9.	Transferability of Awards	10



 


		(a)	General Nontransferability Absent Administrator Permission	10



 


		(b)	Administrator Discretion to Permit Transfers Other Than For Value	10



 


		10.	Adjustments for Corporate Transactions and Other Events	10



 


		(a)	Mandatory Adjustments	10



 


		(b)	Discretionary Adjustments	10



 


		(c)	Adjustments to Performance Goals	11



 



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		(d)	Statutory Requirements Affecting Adjustments	11



 


		(e)	Dissolution or Liquidation	11



 


		11.	Change in Control Provisions	11



 


		(a)	Termination of Awards	11



 


		(b)	Continuation, Assumption or Substitution of Awards	12



 


		(c)	Other Permitted Actions	12



 


		(d)	Section 409A Savings Clause	12



 


		12.	Substitution of Awards in Mergers and Acquisitions	12



 


		13.	Compliance with Securities Laws; Listing and Registration	13



 


		14.	Section 409A Compliance	13



 


		15.	Plan Duration; Amendment and Discontinuance	14



 


		(a)	Plan Duration	14



 


		(b)	Amendment and Discontinuance of the Plan	14



 


		(c)	Amendment of Awards	14



 


		16.	General Provisions	15



 


		(a)	Non-Guarantee of Employment or Service	15



 


		(b)	No Trust or Fund Created	15



 


		(c)	Status of Awards	15



 


		(d)	Subsidiary Employees	15



 


		(e)	Governing Law and Interpretation	15



 


		(f)	Use of English Language	15



 


		(g)	Recovery of Amounts Paid	15



 


		17.	Glossary	16



 



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1.             History;
Existence of the Plan.


 


SKYWARD SPECIALTY INSURANCE GROUP, INC., a
Delaware corporation (“Skyward Specialty”), has established the SKYWARD SPECIALTY INSURANCE GROUP, INC. 2022 LONG-TERM
INCENTIVE PLAN, as set forth herein, and as the same may be amended from time to time (the “Plan”). The Plan will come
into existence on the Effective Date; provided, however, that no Award may be granted prior to the IPO Date. In addition, no Award
will be exercised (or, in the case of Restricted Stock, Restricted Stock Units, Performance Shares, or Other Stock-Based Awards, no Award
will be granted) and no Performance Units will be settled unless and until the Plan has been approved by the shareholders of Skyward Specialty,
which approval will be within 12 months after the date the Plan is adopted by the Board of Directors of Skyward Specialty (the “Board”).


 


On the Effective Date, the outstanding awards under
the Skyward Specialty Insurance Group, Inc. Long-Term Incentive Plan (the “Prior Plan”) will remain subject to
the same terms and conditions set forth in the Prior Plan and related agreements.


 


No awards will be made under the Prior Plan on
or after the Effective Date.


 


2.             Purposes
of the Plan.


 


The Plan is designed to:


 


(a)            promote
the long-term financial interests and growth of Skyward Specialty and its Subsidiaries (together, the “Company”) by
attracting and retaining management and other personnel of Skyward Specialty and other Eligible Individuals.


 


(b)            motivate
management personnel by means of growth-related incentives to achieve long-range goals; and


 


(c)            further
the alignment of interests of Participants with those of the stockholders of Skyward Specialty through opportunities for increased stock
or stock-based ownership in Skyward Specialty.


 


Toward these objectives, the Administrator may
grant stock options, stock appreciation rights, stock awards, stock units, performance shares, performance units, and other stock-based
awards to eligible individuals on the terms and subject to the conditions set forth in the Plan.


 


3.             Terminology.


 


Except as otherwise specifically provided in an
Award Agreement, capitalized words and phrases used in the Plan or an Award Agreement shall have the meaning set forth in the glossary
at Section 17 of the Plan or as defined the first place such word or phrase appears in the Plan.


 


4.             Administration.


 


(a)            Administration
of the Plan. The Plan shall be administered by the Administrator.


 


(b)           Powers
of the Administrator. The Administrator shall, except as otherwise provided under the Plan, have plenary authority, in its sole and
absolute discretion, to grant Awards pursuant to the terms of the Plan to Eligible Individuals and to take all other actions necessary
or desirable to carry out the purpose and intent of the Plan. Among other things, the Administrator shall have the authority, in its sole
and absolute discretion, subject to the terms and conditions of the Plan to:


 


(i)            determine
the Eligible Individuals to whom, and the time or times at which, Awards shall be granted;


 


(ii)           determine
the types of Awards to be granted any Eligible Individual;


 


(iii)          determine
the number of shares of Common Stock to be covered by or used for reference purposes for each Award or the value to be transferred pursuant
to any Award;


 



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(iv)          determine
the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares acquired pursuant thereto,
including, without limitation, (A) the purchase price of any shares of Common Stock, (B) the method of payment for shares purchased
pursuant to any Award, (C) the method for satisfying any tax withholding obligation arising in connection with any Award, including
by the withholding or delivery of shares of Common Stock, (D) the timing, terms and conditions of the exercisability, vesting or
payout of any Award or any shares acquired pursuant thereto, (E) the Performance Goals applicable to any Award and the extent to
which such Performance Goals have been attained, (F) the time of the expiration of any Award, (G) the effect of the Participant’s
Termination of Service on any of the foregoing, and (H) all other terms, conditions and restrictions applicable to any Award or shares
acquired pursuant thereto as the Administrator shall consider to be appropriate and not inconsistent with the terms of the Plan;


 


(v)           subject
to Sections 7(e), 10(c) and 15, modify, amend or adjust the terms and conditions of any Award;


 


(vi)          accelerate
or otherwise change the time at or during which an Award may be exercised or becomes payable and waive or accelerate the lapse, in whole
or in part, of any restriction, condition or risk of forfeiture with respect to such Award; provided, however, that, except
in connection with death, disability or a Change in Control, no such change, waiver or acceleration to any Award that is considered “deferred
compensation” within the meaning of Section 409A of the Code if the effect of such action is inconsistent with Section 409A
of the Code;


 


(vii)         determine
whether an Award will be paid or settled in cash, shares of Common Stock, or in any combination thereof and whether, to what extent and
under what circumstances cash or shares of Common Stock payable with respect to an Award shall be deferred either automatically or at
the election of the Participant;


 


(viii)        for
any purpose, including but not limited to, qualifying for preferred or beneficial tax treatment, accommodating the customs or administrative
challenges or otherwise complying with the tax, accounting or regulatory requirements of one or more jurisdictions, adopt, amend, modify,
administer or terminate sub-plans, appendices, special provisions or supplements applicable to Awards regulated by the laws of a particular
jurisdiction, which sub-plans, appendices, supplements and special provisions may take precedence over other provisions of the Plan, and
prescribe, amend and rescind rules and regulations relating to such sub-plans, supplements and special provisions;


 


(ix)          establish
any “blackout” period, during which transactions affecting Awards may not be effectuated, that the Administrator in its sole
discretion deems necessary or advisable;


 


(x)            determine
the Fair Market Value of shares of Common Stock or other property for any purpose under the Plan or any Award;


 


(xi)           administer,
construe and interpret the Plan, Award Agreements and all other documents relevant to the Plan and Awards issued thereunder, and decide
all other matters to be determined in connection with an Award;


 


(xii)          establish,
amend, rescind and interpret such administrative rules, regulations, agreements, guidelines, instruments and practices for the administration
of the Plan and for the conduct of its business as the Administrator deems necessary or advisable;


 


(xiii)         correct
any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award or Award Agreement in the manner and to the
extent the Administrator shall consider it desirable to carry it into effect; and


 


(xiv)        otherwise
administer the Plan and all Awards granted under the Plan.


 



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(c)            Delegation
of Administrative Authority. The Administrator may designate officers or employees of the Company to assist the Administrator in the
administration of the Plan and, to the extent permitted by applicable law and stock exchange rules, the Administrator may delegate to
officers or other employees of the Company the Administrator’s duties and powers under the Plan, subject to such conditions and
limitations as the Administrator shall prescribe, including without limitation the authority to execute agreements or other documents
on behalf of the Administrator; provided, however, that such delegation of authority shall not extend to the granting of, or exercise
of discretion with respect to, Awards to Eligible Individuals who are officers under Section 16 of the Exchange Act.


 


(d)           Non-Uniform
Determinations. The Administrator’s determinations under the Plan (including without limitation, determinations of the persons
to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the Award Agreements evidencing
such Awards, and the ramifications of a Change in Control upon outstanding Awards) need not be uniform and may be made by the Administrator
selectively among Awards or persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly
situated.


 


(e)            Limited
Liability; Advisors. To the maximum extent permitted by law, no member of the Administrator, nor any director, officer, employee or
representative of Skyward Specialty shall be liable for any action taken or decision made in good faith relating to the Plan or any Award
thereunder. The Administrator may employ counsel, consultants, accountants, appraisers, brokers or other persons. The Administrator, Skyward
Specialty and the officers and directors Skyward Specialty shall be entitled to rely upon the advice, opinions or valuations of any such
persons.


 


(f)            Indemnification.
To the maximum extent permitted by law, by Skyward Specialty’s charter and by-laws, and by any directors’ and officers’
liability insurance coverage which may be in effect from time to time, the members of the Administrator and any agent or delegate of the
Administrator who is a director, officer or employee of Skyward Specialty or an Affiliate shall be indemnified by Skyward Specialty against
any and all liabilities and expenses to which they may be subjected by reason of any act or failure to act with respect to their duties
on behalf of the Plan.


 


(g)           Effect
of Administrator’s Decision. All actions taken and determinations made by the Administrator on all matters relating to the Plan
or any Award pursuant to the powers vested in it hereunder shall be in the Administrator’s sole and absolute discretion, unless
in contravention of any express term of the Plan, including, without limitation, any determination involving the appropriateness or equitableness
of any action. All determinations made by the Administrator shall be conclusive, final and binding on all parties concerned, including
Skyward Specialty, any Participants and any other employee, or director of Skyward Specialty and its Affiliates, and their respective
successors in interest. No member of the Administrator, nor any director, officer, employee or representative of Skyward Specialty shall
be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or Awards.


 


5.             Shares
Issuable Pursuant to Awards.


 


(a)            Initial
Share Pool. Subject to adjustments as provided in Section 10 of the Plan, the number of shares of Common Stock issuable pursuant
to Awards that may be granted under the Plan shall equal [______]1
(the “Share Pool”).


 


(b)           Adjustments
to Share Pool. On and after the Effective Date, the Share Pool shall be adjusted, in addition to any adjustments to be made pursuant
to Section 10 of the Plan, as follows:


 


(i)             The
Share Pool shall be increased automatically, without further action of the Board, on January 1st of each calendar year commencing
after the Effective Date and ending on (and including) January 1, 2032, by a number of shares of Common Stock equal to the lesser
of (A) two percent (2%) of the aggregate number of shares of Common Stock outstanding on December 31st of the immediately preceding
calendar year, excluding for this purpose any such outstanding shares of Common Stock that were granted under this Plan and remain unvested
and subject to forfeiture as of the relevant December 31st, or (B) a lesser number of shares of Common Stock determined by the
Board or Compensation Committee prior to the relevant January 1st.


 


 






1 This number shall equal 8.5% of the issued and outstanding
shares of Common Stock upon the completion of the Initial Public Offering (on a fully-diluted basis).


 



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(ii)           The
Share Pool shall be reduced, on the date of grant, by one share for each share of Common Stock made subject to an Award granted under
the Plan;


 


(iii)           The
Share Pool shall be increased, on the relevant date, by the number of unissued shares of Common Stock underlying or used as a reference
measure for any Award or portion of an Award that is cancelled, forfeited, expired, terminated, unearned or settled in cash, in any such
case without the issuance of shares and by the number of shares of Common Stock used as a reference measure for any Award that are not
issued upon settlement of such Award either due to a net settlement or otherwise;


 


(iv)          The
Share Pool shall be increased, on the forfeiture date, by the number of shares of Common Stock that are forfeited back to Skyward Specialty
after issuance due to a failure to meet an Award contingency or condition with respect to any Award or portion of an Award;


 


(v)           The
Share Pool shall be increased, on the exercise date, by the number of shares of Common Stock withheld by or surrendered (either actually
or through attestation) to Skyward Specialty in payment of the exercise price of any Award; and


 


(vi)          The
Share Pool shall be increased, on the relevant date, by the number of shares of Common Stock withheld by or surrendered (either actually
or through attestation) to the Company in payment of the Tax Withholding Obligation that arises in connection with any Award.


 


For the avoidance of doubt, the Share Pool will not be increased to
include any shares of Common Stock issuable upon exercise of options or the vesting of any type of award granted under the Prior Plan
that (i) expire or terminate without having been exercised in full or (ii) is otherwise cancelled, forfeited, expired, terminated
or unearned in whole or in part.


 


(c)           ISO
Limit. Subject to adjustment pursuant to Section 10 of the Plan, the maximum number of shares of Common Stock that may be issued
pursuant to stock options granted under the Plan that are intended to qualify as Incentive Stock Options within the meaning of Section 422
of the Code shall be equal to [_________].2


 


(d)           Source
of Shares. The shares of Common Stock with respect to which Awards may be made under the Plan shall be shares authorized for issuance
under Skyward Specialty’s charter but unissued, or issued and reacquired, including without limitation shares purchased in the open
market or in private transactions.


 


(e)            Non-Employee
Director Award Limit. In addition, the Administrator may establish compensation for Non-Employee Directors from time to time, subject
to the limitations in the Plan. The Administrator will from time to time determine the terms, conditions and amounts of all such Non-Employee
Director compensation in its discretion and pursuant to the exercise of its business judgment, taking into account such factors, circumstances
and considerations as it shall deem relevant from time to time, provided that the sum of any cash compensation and the grant date fair
value of Awards (as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or
any successor thereto) granted under the Plan to a Non-Employee Director as compensation for services as a Non-Employee Director during
any calendar year of the Company may not exceed $750,000 (such limit, the “Director Limit”). The Administrator may
make exceptions to this limit for individual Non-Employee directors in extraordinary circumstances, as the Administrator may determine
in its discretion, provided that the Non-Employee Director receiving such additional compensation may not participate in the decision
to award such compensation or in other compensation decisions involving Non-Employee Director.


 


 






2
This number shall be equal to the Initial Share Pool in Section 5(a).


 



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6.             Participation.


 


Participation in the Plan shall be open to all
Eligible Individuals, as may be selected by the Administrator from time to time. The Administrator may also grant Awards to Eligible Individuals
in connection with hiring, recruiting or otherwise, prior to the date the individual first performs services for Skyward Specialty or
an Affiliate; provided, however, that such Awards shall not become vested or exercisable and no shares shall be issued to such
individual, prior to the date the individual first commences performance of such services.


 


7.             Awards.


 


(a)            Awards, In
General. The Administrator, in its sole discretion, shall establish the terms of all Awards granted under the Plan consistent with
the terms of the Plan. Awards may be granted individually or in tandem with other types of Awards, concurrently with or with respect to
outstanding Awards. All Awards are subject to the terms and conditions provided in the Award Agreement, which shall be delivered to the
Participant receiving such Award upon, or as promptly as is reasonably practicable following, the grant of such Award. Unless otherwise
specified by the Administrator, in its sole discretion, or otherwise provided in the Award Agreement, an Award shall not be effective
unless the Award Agreement is signed or otherwise accepted by Skyward Specialty and the Participant receiving the Award (including by
electronic delivery and/or electronic signature).


 


(b)           Stock
Options.


 


(i)             Grants.
A stock option means a right to purchase a specified number of shares of Common Stock from Skyward Specialty at a specified price during
a specified period of time. The Administrator may from time to time grant to Eligible Individuals Awards of Incentive Stock Options or
Nonqualified Options; provided, however, that Awards of Incentive Stock Options shall be limited to employees of Skyward
Specialty or of any current or hereafter existing “parent corporation” or “subsidiary corporation,” as defined
in Sections 424(e) and 424(f) of the Code, respectively, of Skyward Specialty, and any other Eligible Individuals who are eligible
to receive Incentive Stock Options under the provisions of Section 422 of the Code. No stock option shall be an Incentive Stock Option
unless so designated by the Administrator at the time of grant or in the applicable Award Agreement.


 


(ii)            Exercise.
Stock options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator;
provided, however, that Awards of stock options may not have a term in excess of ten years’ duration unless required otherwise
by applicable law.


 


(iii)           Termination
of Service. Except as provided in the applicable Award Agreement or otherwise determined by the Administrator, to the extent stock
options are not vested and exercisable, a Participant’s stock options shall be forfeited upon his or her Termination of Service.


 


(iv)           Additional
Terms and Conditions. The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions,
and/or limitations, if any, of any Award of stock options, provided they are not inconsistent with the Plan.


 


(c)            Limitation
on Reload Options. The Administrator shall not grant stock options under this Plan that contain a reload or replenishment feature
pursuant to which a new stock option would be granted automatically upon receipt of delivery of Common Stock to Skyward Specialty in payment
of the exercise price or any tax withholding obligation under any other stock option.


 


(d)           Stock
Appreciation Rights.


 


(i)             Grants.
The Administrator may from time to time grant to Eligible Individuals Awards of stock appreciation rights. A stock appreciation right
entitles the Participant to receive, subject to the provisions of the Plan and the Award Agreement, a payment having an aggregate value
equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one share of Common Stock over (B) the
base price per share specified in the Award Agreement, times (ii) the number of shares specified by the stock appreciation right,
or portion thereof, which is exercised. The base price per share specified in the Award Agreement shall not be less than the lower of
the Fair Market Value on the date of grant or the exercise price of any tandem stock option to which the stock appreciation right is related,
or with respect to stock appreciation rights that are granted in substitution of similar types of awards of a company acquired by Skyward
Specialty or a Subsidiary or with which Skyward Specialty or a Subsidiary combines (whether in connection with a corporate transaction,
such as a merger, combination, consolidation or acquisition of property or stock, or otherwise) such base price as is necessary to preserve
the intrinsic value of such awards.


 



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(ii)            Exercise.
Stock appreciation rights shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by
the Administrator; provided, however, that stock appreciation rights granted under the Plan may not have a term in excess of ten
years’ duration unless required otherwise by applicable law. The applicable Award Agreement shall specify whether payment by Skyward
Specialty of the amount receivable upon any exercise of a stock appreciation right is to be made in cash or shares of Common Stock or
a combination of both, or shall reserve to the Administrator or the Participant the right to make that determination prior to or upon
the exercise of the stock appreciation right. If upon the exercise of a stock appreciation right a Participant is to receive a portion
of such payment in shares of Common Stock, the number of shares shall be determined by dividing such portion by the Fair Market Value
of a share of Common Stock on the exercise date. No fractional shares shall be used for such payment and the Administrator shall determine
whether cash shall be given in lieu of such fractional shares or whether such fractional shares shall be eliminated.


 


(iii)           Termination
of Service. Except as provided in the applicable Award Agreement or otherwise determined by the Administrator, to the extent stock
appreciation rights are not vested and exercisable, a Participant’s stock appreciation rights shall be forfeited upon his or her
Termination of Service.


 


(iv)           Additional
Terms and Conditions. The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions,
and/or limitations, if any, of any Award of stock appreciation rights, provided they are not inconsistent with the Plan.


 


(e)            Repricing.
Notwithstanding anything herein to the contrary, except in connection with a corporate transaction involving Skyward Specialty (including,
without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation,
split-up, spin-off, combination, or exchange of shares), the terms of options and stock appreciation rights granted under the Plan may
not be amended, after the date of grant, to reduce the exercise price of such options or stock appreciation rights, nor may outstanding
options or stock appreciation rights be canceled in exchange for (i) cash, (ii) options or stock appreciation rights with an
exercise price or base price that is less than the exercise price or base price of the original outstanding options or stock appreciation
rights, or (iii) other Awards, unless such action is approved by Skyward Specialty’s stockholders.


 


(f)             Stock
Awards.


 


(i)             Grants.
The Administrator may from time to time grant to Eligible Individuals Awards of unrestricted Common Stock or Restricted Stock (collectively,
 “Stock Awards”) on such terms and conditions, and for such consideration, including no consideration or such minimum
consideration as the Administrator shall determine, subject to the limitations set forth in Section 7(b). Stock Awards shall be evidenced
in such manner as the Administrator may deem appropriate, including via book-entry registration.


 


(ii)            Vesting.
Restricted Stock shall be subject to such vesting, restrictions on transferability and other restrictions, if any, and/or risk of forfeiture
as the Administrator may impose at the date of grant or thereafter. The Restriction Period to which such vesting, restrictions and/or
risk of forfeiture apply may lapse under such circumstances, including without limitation upon the attainment of Performance Goals, in
such installments, or otherwise, as the Administrator may determine. Subject to the provisions of the Plan and the applicable Award Agreement,
during the Restriction Period, the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber shares of
Restricted Stock.


 



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(iii)          Rights
of a Stockholder; Dividends. Except to the extent restricted under the Award Agreement relating to the Restricted Stock, a Participant
granted Restricted Stock shall have all of the rights of a stockholder of Common Stock including, without limitation, the right to vote
Restricted Stock. Cash dividends declared payable on Common Stock shall be paid, with respect to outstanding Restricted Stock, either
as soon as practicable following the dividend payment date or deferred for payment to such later date as determined by the Administrator,
and shall be paid in cash or as unrestricted shares of Common Stock having a Fair Market Value equal to the amount of such dividends or
may be reinvested in additional shares of Restricted Stock as determined by the Administrator; provided, however, that dividends
declared payable on Restricted Stock that is granted as a Performance Award shall be held by Skyward Specialty and made subject to forfeiture
at least until achievement of the applicable Performance Goal related to such shares of Restricted Stock. Stock distributed in connection
with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture
to the same extent as the Restricted Stock with respect to which such Common Stock or other property has been distributed. As soon as
is practicable following the date on which restrictions on any shares of Restricted Stock lapse, Skyward Specialty shall deliver to the
Participant the certificates for such shares or shall cause the shares to be registered in the Participant’s name in book-entry
form, in either case with the restrictions removed, provided that the Participant shall have complied with all conditions for delivery
of such shares contained in the Award Agreement or otherwise reasonably required by Skyward Specialty.


 


(iv)          Termination
of Service. Except as provided in the applicable Award Agreement, upon Termination of Service during the applicable Restriction Period,
Restricted Stock and any accrued but unpaid dividends that are at that time subject to restrictions shall be forfeited; provided that
the Administrator may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that restrictions
or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified
causes, and the Administrator may in other cases waive in whole or in part the forfeiture of Restricted Stock.


 


(v)           Additional
Terms and Conditions. The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions,
and/or limitations, if any, of any Award of Restricted Stock, provided they are not inconsistent with the Plan.


 


(g)           Stock
Units.


 


(i)             Grants.
The Administrator may from time to time grant to Eligible Individuals Awards of unrestricted stock Units or Restricted Stock Units on
such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by
law, as the Administrator shall determine, subject to the limitations set forth in Section 7(b). Restricted Stock Units represent
a contractual obligation by Skyward Specialty to deliver a number of shares of Common Stock, an amount in cash equal to the Fair Market
Value of the specified number of shares subject to the Award, or a combination of shares of Common Stock and cash, in accordance with
the terms and conditions set forth in the Plan and any applicable Award Agreement.


 


(ii)            Vesting
and Payment. Restricted Stock Units shall be subject to such vesting, risk of forfeiture and/or payment provisions as the Administrator
may impose at the date of grant. The Restriction Period to which such vesting and/or risk of forfeiture apply may lapse under such circumstances,
including without limitation upon the attainment of Performance Goals, in such installments, or otherwise, as the Administrator may determine.
Shares of Common Stock, cash or a combination of shares of Common Stock and cash, as applicable, payable in settlement of Restricted Stock
Units shall be delivered to the Participant as soon as administratively practicable, but no later than 30 days, after the date on which
payment is due under the terms of the Award Agreement provided that the Participant shall have complied with all conditions for
delivery of such shares or payment contained in the Award Agreement or otherwise reasonably required by Skyward Specialty, or in accordance
with an election of the Participant, if the Administrator so permits, that meets the requirements of Section 409A of the Code.


 


(iii)           No
Rights of a Stockholder; Dividend Equivalents. Until shares of Common Stock are issued to the Participant in settlement of stock Units,
the Participant shall not have any rights of a stockholder of Skyward Specialty with respect to the stock Units or the shares issuable
thereunder. The Administrator may grant to the Participant the right to receive Dividend Equivalents on stock Units, on a current, reinvested
and/or restricted basis, subject to such terms as the Administrator may determine provided, however, that Dividend Equivalents
payable on stock Units that are granted as a Performance Award shall, rather than be paid on a current basis, be accrued and made subject
to forfeiture at least until achievement of the applicable Performance Goal related to such stock Units.


 



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(iv)          Termination
of Service. Upon Termination of Service during the applicable deferral period or portion thereof to which forfeiture conditions apply,
or upon failure to satisfy any other conditions precedent to the delivery of shares of Common Stock or cash to which such Restricted Stock
Units relate, all Restricted Stock Units and any accrued but unpaid Dividend Equivalents with respect to such Restricted Stock Units that
are then subject to deferral or restriction shall be forfeited; provided that the Administrator may provide, by rule or regulation
or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted
Stock Units will be waived in whole or in part in the event of termination resulting from specified causes, and the Administrator may
in other cases waive in whole or in part the forfeiture of Restricted Stock Units.


 


(v)           Additional
Terms and Conditions. The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions,
and/or limitations, if any, of any Award of stock Units, provided they are not inconsistent with the Plan.


 


(h)           Performance
Shares and Performance Units.


 


(i)             Grants.
The Administrator may from time to time grant to Eligible Individuals Awards in the form of Performance Shares and Performance Units.
Performance Shares, as that term is used in this Plan, shall refer to shares of Common Stock or Units that are expressed in terms of Common
Stock, the issuance, vesting, lapse of restrictions on or payment of which is contingent on performance as measured against predetermined
objectives over a specified Performance Period. Performance Units, as that term is used in this Plan, shall refer to dollar-denominated
Units valued by reference to designated criteria established by the Administrator, other than Common Stock, the issuance, vesting, lapse
of restrictions on or payment of which is contingent on performance as measured against predetermined objectives over a specified Performance
Period. The applicable Award Agreement shall specify whether Performance Shares and Performance Units will be settled or paid in cash
or shares of Common Stock or a combination of both, or shall reserve to the Administrator or the Participant the right to make that determination
prior to or at the payment or settlement date.


 


(ii)            Performance
Criteria. The Administrator shall, prior to or at the time of grant, condition the grant, vesting or payment of, or lapse of restrictions
on, an Award of Performance Shares or Performance Units upon (A) the attainment of Performance Goals during a Performance Period
or (B) the attainment of Performance Goals and the continued service of the Participant. The length of the Performance Period, the
Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have
been attained shall be conclusively determined by the Administrator in the exercise of its absolute discretion. Performance Goals may
include minimum, maximum and target levels of performance, with the size of the Award or payout of Performance Shares or Performance Units
or the vesting or lapse of restrictions with respect thereto based on the level attained. Performance Goals may be applied on a per share
or absolute basis and relative to one or more Performance Metrics, or any combination thereof, and may be measured pursuant to U.S. generally
accepted accounting principles (“GAAP”), non-GAAP or other objective standards in a manner consistent with Skyward Specialty’s
or its Subsidiary’s established accounting policies, all as the Administrator shall determine at the time the Performance Goals
for a Performance Period are established. The Administrator may, in its sole discretion, provide that one or more objectively determinable
adjustments shall be made to the manner in which one or more of the Performance Goals is to be calculated or measured to take into account,
or ignore, one or more of the following: (1) items related to a change in accounting principle; (2) items relating to financing
activities; (3) expenses for restructuring or productivity initiatives; (4) other non-operating items; (5) items related
to acquisitions; (6) items attributable to the business operations of any entity acquired by the Company during the Performance Period;
(7) items related to the sale or disposition of a business or segment of a business; (8) items related to discontinued operations
that do not qualify as a segment of a business under U.S. generally accepted accounting principles; (9) items attributable to any
stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (10) any other items of significant
income or expense which are determined to be appropriate adjustments; (11) items relating to unusual or extraordinary corporate transactions,
events or developments, (12) items related to amortization of acquired intangible assets; (13) items that are outside the scope of the
Company’s core, on-going business activities; (14) changes in foreign currency exchange rates; (15) items relating to changes in
tax laws; (16) certain identified expenses (including, but not limited to, cash bonus expenses, incentive expenses and acquisition-related
transaction and integration expenses); (17) items relating to asset impairment charges; (18) items relating to gains or unusual or nonrecurring
events or changes in applicable law, accounting principles or business conditions, or (19) or any other items selected by the Administrator.
Shares or Performance Units shall be settled as and when the Award vests or at a later time specified in the Award Agreement or in accordance
with an election of the Participant, if the Administrator so permits, that meets the requirements of Section 409A of the Code.


 



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(iii)           Additional
Terms and Conditions. The Administrator may, by way of the Award Agreement or otherwise, determine such other terms, conditions, restrictions,
and/or limitations, if any, of any Award of Performance Shares or Performance Units, provided they are not inconsistent with the
Plan.


 


(i)             Other
Stock-Based Awards. The Administrator may from time to time grant to Eligible Individuals Awards in the form of Other Stock-Based
Awards. Other Stock-Based Awards in the form of Dividend Equivalents may be (A) awarded on a free-standing basis or in connection
with another Award other than a stock option or stock appreciation right, (B) paid currently or credited to an account for the Participant,
including the reinvestment of such credited amounts in Common Stock equivalents, to be paid on a deferred basis, and (C) settled
in cash or Common Stock as determined by the Administrator; provided, however, that Dividend Equivalents payable on Other
Stock-Based Awards that are granted as a Performance Award shall, rather than be paid on a current basis, be accrued and made subject
to forfeiture at least until achievement of the applicable Performance Goal related to such Other Stock- Based Awards. Any such settlements,
and any such crediting of Dividend Equivalents, may be subject to such conditions, restrictions and contingencies as the Administrator
shall establish.


 


(j)             Awards
to Participants Outside the United States. The Administrator may grant Awards to Eligible Individuals who are foreign nationals, who
are located outside the United States or who are not compensated from a payroll maintained in the United States, or who are otherwise
subject to (or could cause Skyward Specialty or a Subsidiary to be subject to) tax, legal or regulatory provisions of countries or jurisdictions
outside the United States, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Administrator,
be necessary or desirable in order that any such Award shall conform to laws, regulations, and customs of the country or jurisdiction
in which the Participant is then resident or primarily employed or to foster and promote achievement of the purposes of the Plan.


 


(k)            Limitation
on Dividend Reinvestment and Dividend Equivalents. Reinvestment of dividends in additional Restricted Stock at the time of any dividend
payment, and the payment of shares of Common Stock with respect to dividends to Participants holding Awards of stock Units, shall only
be permissible if sufficient shares are available under the Share Pool for such reinvestment or payment (taking into account then outstanding
Awards). In the event that sufficient shares are not available under the Share Pool for such reinvestment or payment, such reinvestment
or payment shall be made in the form of a grant of stock Units equal in number to the shares of Common Stock that would have been obtained
by such payment or reinvestment, the terms of which stock Units shall provide for settlement in cash and for Dividend Equivalent reinvestment
in further stock Units on the terms contemplated by this Section 7(k).


 


8.             Withholding
of Taxes.


 


Participants and holders of Awards shall pay to
Skyward Specialty or its Affiliate, or make arrangements satisfactory to the Administrator for payment of, any Tax Withholding Obligation
in respect of Awards granted under the Plan no later than the date of the event creating the tax or social insurance contribution liability.
The obligations of Skyward Specialty under the Plan shall be conditional on such payment or arrangements. Unless otherwise determined
by the Administrator, Tax Withholding Obligations may be settled in whole or in part with shares of Common Stock, including unrestricted
outstanding shares surrendered to Skyward Specialty and unrestricted shares that are part of the Award that gives rise to the Tax Withholding
Obligation, having a Fair Market Value on the date of surrender or withholding equal to the statutory minimum amount (or such greater
amount permitted under FASB Accounting Standards Codification Topic 718, Compensation—Stock Compensation, for equity-classified
awards) required to be withheld for tax or social insurance contribution purposes, all in accordance with such procedures as the Administrator
establishes. Skyward Specialty or its Affiliate may deduct, to the extent permitted by law, any such Tax Withholding Obligations from
any payment of any kind otherwise due to the Participant or holder of an Award.


 



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9.             Transferability
of Awards.


 


(a)            General
Nontransferability Absent Administrator Permission. Except as otherwise determined by the Administrator, and in any event in the case
of an Incentive Stock Option or a tandem stock appreciation right granted with respect to an Incentive Stock Option, no Award granted
under the Plan shall be transferable by a Participant otherwise than by will or the laws of descent and distribution. The Administrator
shall not permit any transfer of an Award for value. An Award may be exercised during the lifetime of the Participant, only by the Participant
or, during the period the Participant is under a legal disability, by the Participant’s guardian or legal representative, unless
otherwise determined by the Administrator. Awards granted under the Plan shall not be subject in any manner to alienation, anticipation,
sale, transfer, assignment, pledge, or encumbrance, except as otherwise determined by the Administrator; provided, however, that
the restrictions in this sentence shall not apply to the shares of Common Stock received in connection with an Award after the date that
the restrictions on transferability of such shares set forth in the applicable Award Agreement have lapsed. Nothing in this paragraph
shall be interpreted or construed as overriding the terms of any Skyward Specialty stock ownership or retention policy, now or hereafter
existing, that may apply to the Participant or shares of Common Stock received under an Award.


 


(b)            Administrator
Discretion to Permit Transfers Other Than For Value. Except as otherwise restricted by applicable law, the Administrator may, but
need not, permit an Award, other than an Incentive Stock Option or a tandem stock appreciation right granted with respect to an Incentive
Stock Option, to be transferred to a Participant’s Family Member (as defined below) as a gift or pursuant to a domestic relations
order in settlement of marital property rights. The Administrator shall not permit any transfer of an Award for value. For purposes of
this Section 9, “Family Member” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the Participant’s household (other than a tenant or employee), a trust in which these
persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the Participant) control the
management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent (50%) of the voting
interests. The following transactions are not prohibited transfers for value: (i) a transfer under a domestic relations order in
settlement of marital property rights; and (ii) a transfer to an entity in which more than fifty percent of the voting interests
are owned by Family Members (or the Participant) in exchange for an interest in that entity.


 


10.           Adjustments
for Corporate Transactions and Other Events.


 


(a)            Mandatory
Adjustments. In the event of a merger, consolidation, stock rights offering, statutory share exchange or similar event affecting Skyward
Specialty (each, a “Corporate Event”) or a stock dividend, stock split, reverse stock split, separation, spinoff, reorganization,
extraordinary dividend of cash or other property, share combination or subdivision, recapitalization, capital reduction distribution,
or similar event affecting the capital structure of Skyward Specialty (each, a “Share Change”) that occurs at any time
after the Effective Date (including any such Corporate Event or Share Change that occurs after such adoption and coincident with or prior
to the Effective Date), the Administrator shall make equitable and appropriate substitutions or proportionate adjustments to (i) the
aggregate number and kind of shares of Common Stock or other securities on which Awards under the Plan may be granted to Eligible Individuals,
(ii) the maximum number of shares of Common Stock or other securities that may be issued with respect to Incentive Stock Options
granted under the Plan, (iii) the number of shares of Common Stock or other securities covered by each outstanding Award and the
exercise price, base price or other price per share, if any, and other relevant terms of each outstanding Award, and (iv) all other
numerical limitations relating to Awards, whether contained in this Plan or in Award Agreements; provided, however, that
any fractional shares resulting from any such adjustment shall be eliminated.


 


(b)            Discretionary
Adjustments. In the case of Corporate Events, the Administrator may make such other adjustments to outstanding Awards as it determines
to be appropriate and desirable, which adjustments may include, without limitation, (i) the cancellation of outstanding Awards in
exchange for payments of cash, securities or other property or a combination thereof having an aggregate value equal to the value of such
Awards, as determined by the Administrator in its sole discretion (it being understood that in the case of a Corporate Event with respect
to which stockholders of Skyward Specialty receive consideration other than publicly traded equity securities of the ultimate surviving
entity, any such determination by the Administrator that the value of a stock option or stock appreciation right shall for this purpose
be deemed to equal the excess, if any, of the value of the consideration being paid for each share of Common Stock pursuant to such Corporate
Event over the exercise price or base price of such stock option or stock appreciation right shall conclusively be deemed valid and that
any stock option or stock appreciation right may be cancelled for no consideration upon a Corporate Event if its exercise price or base
price equals or exceeds the value of the consideration being paid for each share of Common Stock pursuant to such Corporate Event), (ii) the
substitution of securities or other property (including, without limitation, cash or other securities of Skyward Specialty and securities
of entities other than Skyward Specialty) for the shares of Common Stock subject to outstanding Awards, and (iii) the substitution
of equivalent awards, as determined in the sole discretion of the Administrator, of the surviving or successor entity or a parent thereof
(“Substitute Awards”).


 



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(c)            Adjustments
to Performance Goals. The Administrator may, in its discretion, adjust the Performance Goals applicable to any Awards to reflect any
unusual or non-recurring events and other extraordinary items, impact of charges for restructurings, discontinued operations and the cumulative
effects of accounting or tax changes, each as defined by generally accepted accounting principles or as identified in Skyward Specialty’s
consolidated financial statements, notes to the consolidated financial statements, management’s discussion and analysis or other
Skyward Specialty filings with the Securities and Exchange Commission. If the Administrator determines that a change in the business,
operations, corporate structure or capital structure of Skyward Specialty or the applicable subsidiary, business segment or other operational
unit of Skyward Specialty or any such entity or segment, or the manner in which any of the foregoing conducts its business, or other events
or circumstances, render the Performance Goals to be unsuitable, the Administrator may modify such Performance Goals or the related minimum
acceptable level of achievement, in whole or in part, as the Administrator deems appropriate and equitable.


 


(d)            Statutory
Requirements Affecting Adjustments. Notwithstanding the foregoing: (A) any adjustments made pursuant to Section 10 to Awards
that are considered “deferred compensation” within the meaning of Section 409A of the Code shall be made in compliance
with the requirements of Section 409A of the Code; (B) any adjustments made pursuant to Section 10 to Awards that are not
considered “deferred compensation” subject to Section 409A of the Code shall be made in such a manner as to ensure that
after such adjustment, the Awards either (1) continue not to be subject to Section 409A of the Code or (2) comply with
the requirements of Section 409A of the Code; (C) in any event, the Administrator shall not have the authority to make any adjustments
pursuant to Section 10 to the extent the existence of such authority would cause an Award that is not intended to be subject to Section 409A
of the Code at the date of grant to be subject thereto; and (D) any adjustments made pursuant to Section 10 to Awards that are
Incentive Stock Options shall be made in compliance with the requirements of Section 424(a) of the Code.


 


(e)            Dissolution
or Liquidation. Unless the Administrator determines otherwise, all Awards outstanding under the Plan shall terminate upon the dissolution
or liquidation of Skyward Specialty.


 


11.           Change
in Control Provisions.


 


(a)            Termination
of Awards. Notwithstanding the provisions of Section 11(b), in the event that any transaction resulting in a Change in Control
occurs, outstanding Awards will terminate upon the effective time of such Change in Control unless provision is made in connection with
the transaction for the continuation or assumption of such Awards by, or for the issuance therefor of Substitute Awards of, the surviving
or successor entity or a parent thereof. Solely with respect to Awards that will terminate as a result of the immediately preceding sentence
and except as otherwise provided in the applicable Award Agreement:


 


(i)             the
outstanding Awards of stock options and stock appreciation rights that will terminate upon the effective time of the Change in Control
shall, immediately before the effective time of the Change in Control, become fully exercisable and the holders of such Awards will be
permitted, immediately before the Change in Control, to exercise the Awards;


 


(ii)            the
outstanding shares of Restricted Stock the vesting or restrictions on which are then solely time-based and not subject to achievement
of Performance Goals shall, immediately before the effective time of the Change in Control, become fully vested, free of all transfer
and lapse restrictions and free of all risks of forfeiture;


 


(iii)           the
outstanding shares of Restricted Stock the vesting or restrictions on which are then subject to and pending achievement of Performance
Goals shall, immediately before the effective time of the Change in Control and unless the Award Agreement provides for vesting or lapsing
of restrictions in a greater amount upon the occurrence of a Change in Control, become vested, free of transfer and lapse restrictions
and risks of forfeiture in such amounts as if the applicable Performance Goals for the unexpired Performance Period had been achieved
at the target level set forth in the applicable Award Agreement;


 



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(iv)           the
outstanding Restricted Stock Units, Performance Shares and Performance Units the vesting, earning or settlement of which is then solely
time-based and not subject to or pending achievement of Performance Goals shall, immediately before the effective time of the Change in
Control, become fully earned and vested and shall be settled in cash or shares of Common Stock (consistent with the terms of the Award
Agreement after taking into account the effect of the Change in Control transaction on the shares) as promptly as is practicable, subject
to any applicable limitations imposed thereon by Section 409A of the Code; and


 


(v)            the
outstanding Restricted Stock Units, Performance Shares and Performance Units the vesting, earning or settlement of which is then subject
to and pending achievement of Performance Goals shall, immediately before the effective time of the Change in Control and unless the Award
Agreement provides for vesting, earning or settlement in a greater amount upon the occurrence of a Change in Control, become vested and
earned in such amounts as if the applicable Performance Goals for the unexpired Performance Period had been achieved at the target level
set forth in the applicable Award Agreement and shall be settled in cash or shares of Common Stock (consistent with the terms of the Award
Agreement after taking into account the effect of the Change in Control transaction on the shares) as promptly as is practicable, subject
to any applicable limitations imposed thereon by Section 409A of the Code.


 


Implementation of the provisions of this Section 11(a) shall
be conditioned upon consummation of the Change in Control.


 


(b)           Continuation,
Assumption or Substitution of Awards. The Administrator may specify, on or after the date of grant, in an award agreement or amendment
thereto, the consequences of a Participant’s Termination of Service that occurs coincident with or following the occurrence of a
Change in Control, if a Change in Control occurs under which provision is made in connection with the transaction for the continuation
or assumption of outstanding Awards by, or for the issuance therefor of Substitute Awards of, the surviving or successor entity or a parent
thereof.


 


(c)            Other
Permitted Actions. In the event that any transaction resulting in a Change in Control occurs, the Administrator may take any of the
actions set forth in Section 10 with respect to any or all Awards granted under the Plan.


 


(d)            Section 409A
Savings Clause. Notwithstanding the foregoing, if any Award is considered to be a “nonqualified deferred compensation plan”
within the meaning of Section 409A of the Code, this Section 11 shall apply to such Award only to the extent that its application
would not result in the imposition of any tax or interest or the inclusion of any amount in income under Section 409A of the Code.


 


12.           Substitution
of Awards in Mergers and Acquisitions.


 


Awards may be granted under the Plan from time
to time in substitution for assumed awards held by employees, officers, or directors of entities who become employees, officers, or directors
of Skyward Specialty or a Subsidiary as the result of a merger or consolidation of the entity for which they perform services with Skyward
Specialty or a Subsidiary, or the acquisition by Skyward Specialty of the assets or stock of the such entity. The terms and conditions
of any Awards so granted may vary from the terms and conditions set forth herein to the extent that the Administrator deems appropriate
at the time of grant to conform the Awards to the provisions of the assumed awards for which they are substituted and to preserve their
intrinsic value as of the date of the merger, consolidation or acquisition transaction. To the extent permitted by applicable law and
marketplace or listing rules of the primary securities market or exchange on which the Common Stock is listed or admitted for trading,
any available shares under a stockholder-approved plan of an acquired company (as appropriately adjusted to reflect the transaction) may
be used for Awards granted pursuant to this Section 12 and, upon such grant, shall not reduce the Share Pool.


 



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13.           Compliance
with Securities Laws; Listing and Registration.


 


(a)            The
obligation of Skyward Specialty to sell or deliver Common Stock with respect to any Award granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal, state securities laws, and the obtaining of all such approvals
by governmental agencies as may be deemed necessary or appropriate by the Administrator. If at any time the Administrator determines that
the delivery of Common Stock under the Plan is or may be unlawful under the laws of any applicable jurisdiction, or Federal, state or
foreign (non-United States) securities laws, the right to exercise an Award or receive shares of Common Stock pursuant to an Award shall
be suspended until the Administrator determines that such delivery is lawful. If at any time the Administrator determines that the delivery
of Common Stock under the Plan would or may violate the rules of any exchange on which Skyward Specialty’s securities are then
listed for trade, the right to exercise an Award or receive shares of Common Stock pursuant to an Award shall be suspended until the Administrator
determines that such delivery would not violate such rules. If the Administrator determines that the exercise or nonforfeitability of,
or delivery of benefits pursuant to, any Award would violate any applicable provision of securities laws or the listing requirements of
any stock exchange upon which any of Skyward Specialty’s equity securities are listed, then the Administrator may postpone any such
exercise, nonforfeitability or delivery, as applicable, but Skyward Specialty shall use all reasonable efforts to cause such exercise,
nonforfeitability or delivery to comply with all such provisions at the earliest practicable date.


 


(b)           Each
Award is subject to the requirement that, if at any time the Administrator determines, in its absolute discretion, that the listing, registration
or qualification of Common Stock issuable pursuant to the Plan is required by any securities exchange or under any state, federal or foreign
(non-United States) law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or
in connection with, the grant of an Award or the issuance of Common Stock, no such Award shall be granted or payment made or Common Stock
issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any
conditions not acceptable to the Administrator.


 


(c)           In
the event that the disposition of Common Stock acquired pursuant to the Plan is not covered by a then current registration statement under
the Securities Act of 1933, as amended (the “Securities Act”), and is not otherwise exempt from such registration,
such Common Stock shall be restricted against transfer to the extent required by the Securities Act or regulations thereunder, and the
Administrator may require a person receiving Common Stock pursuant to the Plan, as a condition precedent to receipt of such Common Stock,
to represent to Skyward Specialty in writing that the Common Stock acquired by such person is acquired for investment only and not with
a view to distribution and that such person will not dispose of the Common Stock so acquired in violation of Federal, state or foreign
securities laws and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company to
issue the Common Stock in compliance with applicable Federal, state or foreign securities laws.


 


14.           Section 409A
Compliance.


 


It is the intention of Skyward Specialty that any
Award that constitutes a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code shall
comply in all respects with the requirements of Section 409A of the Code to avoid the imposition of any tax or interest or the inclusion
of any amount in income pursuant to Section 409A of the Code, and the terms of each such Award shall be construed, administered and
deemed amended, if applicable, in a manner consistent with this intention. Notwithstanding the foregoing, neither Skyward Specialty nor
any of its Affiliates nor any of its or their directors, officers, employees, agents or other service providers will be liable for any
taxes, penalties or interest imposed on any Participant or other person with respect to any amounts paid or payable (whether in cash,
shares of Common Stock or other property) under any Award, including any taxes, penalties or interest imposed under or as a result of
Section 409A of the Code. Any payments described in an Award that are due within the “short term deferral period” as
defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. For purposes
of any Award, each amount to be paid or benefit to be provided to a Participant that constitutes deferred compensation subject to Section 409A
of the Code shall be construed as a separate identified payment for purposes of Section 409A of the Code. For purposes of Section 409A
of the Code, the payment of Dividend Equivalents under any Award shall be construed as earnings and the time and form of payment of such
Dividend Equivalents shall be treated separately from the time and form of payment of the underlying Award. Notwithstanding any other
provision of the Plan to the contrary, with respect to any Award that constitutes a “nonqualified deferred compensation plan”
within the meaning of Section 409A of the Code, any payments (whether in cash, shares of Common Stock or other property) to be made
with respect to the Award that become payable on account of the Participant’s separation from service, within the meaning of Section 409A
of the Code, while the Participant is a “specified employee” (as determined in accordance with the uniform policy adopted
by the Administrator with respect to all of the arrangements subject to Section 409A of the Code maintained by Skyward Specialty
and its Affiliates) and which would otherwise be paid within six months after the Participant’s separation from service, to the
extent necessary to avoid the imposition of taxes under Section 409A, shall be accumulated (without interest) and paid on the first
day of the seventh month following the Participant’s separation from service or, if earlier, within 15 days after the appointment
of the personal representative or executor of the Participant’s estate following the Participant’s death. Notwithstanding
anything in the Plan or an Award Agreement to the contrary, in no event shall the Administrator exercise its discretion to accelerate
the payment or settlement of an Award where such payment or settlement constitutes deferred compensation within the meaning of Code section
409A unless, and solely to the extent that, such accelerated payment or settlement is permissible under Treasury Regulation section 1.409A-3(j)(4).


 



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15.           Plan
Duration; Amendment and Discontinuance.


 


(a)           Plan
Duration. The Plan shall remain in effect, subject to the right of the Board or the Compensation Committee to amend or terminate the
Plan at any time, until the earlier of (a) the earliest date as of which all Awards granted under the Plan have been satisfied in
full or terminated and no shares of Common Stock approved for issuance under the Plan remain available to be granted under new Awards
or (b) September 22, 2032. No Awards shall be granted under the Plan after such termination date. Subject to other applicable
provisions of the Plan, all Awards made under the Plan on or before September 22, 2032 or such earlier termination of the Plan, shall
remain in effect until such Awards have been satisfied or terminated in accordance with the Plan and the terms of such Awards.


 


(b)           Amendment
and Discontinuance of the Plan. The Board or the Compensation Committee may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would materially impair the rights of a Participant with respect to a previously granted
Award without such Participant’s consent, except such an amendment made to comply with applicable law or rule of any securities
exchange or market on which the Common Stock is listed or admitted for trading or to prevent adverse tax or accounting consequences to
Skyward Specialty or the Participant. Notwithstanding the foregoing, no such amendment shall be made without the approval of Skyward Specialty’s
stockholders to the extent such amendment would (A) materially increase the benefits accruing to Participants under the Plan, (B) materially
increase the number of shares of Common Stock which may be issued under the Plan or to a Participant, (C) materially expand the eligibility
for participation in the Plan, (D) eliminate or modify the prohibition set forth in Section 7(e) on repricing of stock
options and stock appreciation rights, (E) lengthen the maximum term or lower the minimum exercise price or base price permitted
for stock options and stock appreciation rights, or (F) modify the prohibition on the issuance of reload or replenishment options.
Except as otherwise determined by the Board or Compensation Committee, termination of the Plan shall not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.


 


(c)            Amendment
of Awards. Subject to Section 7(e), the Administrator may unilaterally amend the terms of any Award theretofore granted, but
no such amendment shall materially impair the rights of any Participant with respect to an Award without the Participant’s consent,
except such an amendment made to cause the Plan or Award to comply with applicable law, applicable rule of any securities exchange
on which the Common Stock is listed or admitted for trading, or to prevent adverse tax or accounting consequences for the Participant
or the Company or any of its Affiliates. For purposes of the foregoing sentence, an amendment to an Award that results in a change in
the tax consequences of the Award to the Participant shall not be considered to be a material impairment of the rights of the Participant
and shall not require the Participant’s consent.


 



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16.          General
Provisions.


 


(a)            Non-Guarantee
of Employment or Service. Nothing in the Plan or in any Award Agreement thereunder shall confer any right on an individual to continue
in the service of Skyward Specialty or any Affiliate or shall interfere in any way with the right of Skyward Specialty or any Affiliate
to terminate such service at any time with or without cause or notice and whether or not such termination results in (i) the failure
of any Award to vest or become payable; (ii) the forfeiture of any unvested or vested portion of any Award; and/or (iii) any
other adverse effect on the individual’s interests under any Award or the Plan. No person, even though deemed an Eligible Individual,
shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant. To the extent
that an Eligible Individual who is an employee of a Subsidiary receives an Award under the Plan, that Award shall in no event be understood
or interpreted to mean that Skyward Specialty is the Participant’s employer or that the Participant has an employment relationship
with Skyward Specialty.


 


(b)            No
Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind
or a fiduciary relationship between Skyward Specialty and a Participant or any other person. To the extent that any Participant or other
person acquires a right to receive payments from Skyward Specialty pursuant to an Award, such right shall be no greater than the right
of any unsecured general creditor of Skyward Specialty.


 


(c)            Status
of Awards. Awards shall be special incentive payments to the Participant and shall not be taken into account in computing the amount
of salary or compensation of the Participant for purposes of determining any pension, retirement, death, severance or other benefit under
(a) any pension, retirement, profit-sharing, bonus, insurance, severance or other employee benefit plan of Skyward Specialty or any
Affiliate now or hereafter in effect under which the availability or amount of benefits is related to the level of compensation or (b) any
agreement between (i) Skyward Specialty or any Affiliate and (ii) the Participant, except as such plan or agreement shall otherwise
expressly provide.


 


(d)            Subsidiary
Employees. In the case of a grant of an Award to an Eligible Individual who provides services to any Subsidiary, Skyward Specialty
may, if the Administrator so directs, issue or transfer the shares of Common Stock, if any, covered by the Award to the Subsidiary, for
such lawful consideration as the Administrator may specify, upon the condition or understanding that the Subsidiary will transfer the
shares of Common Stock to the Eligible Individual in accordance with the terms of the Award specified by the Administrator pursuant to
the provisions of the Plan. All shares of Common Stock underlying Awards that are forfeited or canceled after such issue or transfer of
shares to the Subsidiary shall revert to Skyward Specialty.


 


(e)            Governing
Law and Interpretation. The validity, construction and effect of the Plan, of Award Agreements entered into pursuant to the Plan,
and of any rules, regulations, determinations or decisions made by the Administrator relating to the Plan or such Award Agreements, and
the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance
with applicable United States federal laws and the laws of the State of Delaware, without regard to its conflict of laws principles. The
captions of the Plan are not part of the provisions hereof and shall have no force or effect. Except where the context otherwise requires:
(i) the singular includes the plural and vice versa; (ii) a reference to one gender includes other genders; (iii) a reference
to a person includes a natural person, partnership, corporation, association, governmental or local authority or agency or other entity;
and (iv) a reference to a statute, ordinance, code or other law includes regulations and other instruments under it and consolidations,
amendments, re-enactments or replacements of any of them.


 


(f)            Use
of English Language. The Plan, each Award Agreement, and all other documents, notices and legal proceedings entered into, given or
instituted pursuant to an Award shall be written in English, unless otherwise determined by the Administrator. If a Participant receives
an Award Agreement, a copy of the Plan or any other documents related to an Award translated into a language other than English, and if
the meaning of the translated version is different from the English version, the English version shall control.


 


(g)            Recovery
of Amounts Paid. Except as otherwise provided by the Administrator, Awards granted under the Plan shall be subject to any and all
policies, guidelines, codes of conduct, or other agreement or arrangement adopted by the Board or Compensation Committee with respect
to the recoupment, recovery or clawback of compensation (collectively, the “Recoupment Policy”) and/or to any provisions set
forth in the applicable Award Agreement under which Skyward Specialty may recover from current and former Participants any amounts paid
or shares of Common Stock issued under an Award and any proceeds therefrom under such circumstances as the Administrator determines appropriate.
The Administrator may apply the Recoupment Policy to Awards granted before the policy is adopted to the extent required by applicable
law or rule of any securities exchange or market on which shares of Common Stock are listed or admitted for trading, as determined
by the Administrator in its sole discretion.


 



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17.           Glossary.


 


Under this Plan, except where the context otherwise
indicates, the following definitions apply:


 


“Administrator”
means the Compensation Committee, or such other committee(s) of director(s) duly appointed by the Board or the Compensation
Committee to administer the Plan or delegated limited authority to perform administrative actions under the Plan, and having such powers
as shall be specified by the Board or the Compensation Committee; provided, however, that at any time the Board may serve as the Administrator
in lieu of or in addition to the Compensation Committee or such other committee(s) of director(s) to whom administrative authority
has been delegated. With respect to any Award to which Section 16 of the Exchange Act applies, the Administrator shall consist of
either the Board or a committee of the Board, which committee shall consist of three or more directors, each of whom is intended to be,
to the extent required by Rule 16b-3 of the Exchange Act, a “non-employee director” as defined in Rule 16b-3 of
the Exchange Act and an “independent director” to the extent required by the rules of the national securities exchange
that is the principal trading market for the Common Stock, provided that, with respect to Awards made to a member of the Board who is
not an employee of the Company, Administrator means the Board. Any member of the Administrator who does not meet the foregoing requirements
shall abstain from any decision regarding an Award and shall not be considered a member of the Administrator to the extent required to
comply with Rule 16b-3 of the Exchange Act.


 


“Affiliate” means any entity,
whether now or hereafter existing, which controls, is controlled by, or is under common control with, Skyward Specialty or any successor
to Skyward Specialty. For this purpose, “control” (including the correlative meanings of the terms “controlled by”
and “under common control with”) shall mean ownership, directly or indirectly, of 50% or more of the total combined voting
power of all classes of voting securities issued by such entity, or the possession, directly or indirectly, of the power to direct the
management and policies of such entity, by contract or otherwise.


 


“Award” means any stock option,
stock appreciation right, stock award, stock unit, Performance Share, Performance Unit, and/or Other Stock-Based Award, whether granted
under this Plan.


 


“Award
Agreement” means the written document(s), including an electronic writing acceptable to the Administrator, and any notice,
addendum or supplement thereto, memorializing the terms and conditions of an Award granted pursuant to the Plan and which shall incorporate
the terms of the Plan.


 


“Board” means the Board of Directors
of Skyward Specialty.


 


“Cause” means, unless otherwise
defined in an employment agreement or Award Agreement, a termination of the Participant's service because of: (1) any act or omission
that constitutes a material breach by the Participant of any of his or her obligations under the Plan or an Award Agreement; (2) the
Participant's conviction of, or plea of nolo contendere to, (A) any felony or (B) another crime involving dishonesty or moral
turpitude or which could reflect negatively upon the Skyward Specialty or any of its Affiliates or otherwise impair or impede their operations;
(3) the Participant's engaging in any misconduct, negligence, act of dishonesty, violence or threat of violence (including any violation
of federal securities laws) that is injurious to the Skyward Specialty or any of its Affiliates; (4) the Participant's material breach
of a written policy of the Skyward Specialty or the rules of any governmental or regulatory body applicable to the Skyward Specialty;
(5) the Participant's refusal to follow the directions of the Board; or (6) any other willful misconduct by the Participant
that is materially injurious to the financial condition or business reputation of the Skyward Specialty or any of its Affiliates. Notwithstanding
anything to the contrary, Cause shall be determined in the sole discretion of the Chief Executive Officer of Skyward Specialty and such
Chief Executive Officer shall have the sole discretion to use after-acquired evidence to retroactively recharacterize the prior termination
as a termination for Cause if such after-acquired evidence supports such an action; provided that if the Participant in question is the
Chief Executive Officer, then such determination shall be made in the sole discretion of the Board, which may also use after-acquired
evidence in making such determination.


 


“Change in Control” means, unless
otherwise defined in an Award Agreement, the first of the following to occur: (i) a Change in Ownership of Skyward Specialty, (ii) a
Change in Effective Control of Skyward Specialty, or (iii) a Change in the Ownership of Assets of Skyward Specialty, as described
herein and construed in accordance with Code section 409A.


 



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(i)             A
 “Change in Ownership of Skyward Specialty” shall occur on the date that any one Person acquires, or Persons Acting as a Group
acquire, ownership of the capital stock of Skyward Specialty that, together with the stock held by such Person or Group, constitutes more
than 50% of the total fair market value or total voting power of the capital stock of Skyward Specialty. However, if any one Person is,
or Persons Acting as a Group are, considered to own more than 50%, on a fully diluted basis, of the total fair market value or total voting
power of the capital stock of Skyward Specialty, the acquisition of additional stock by the same Person or Persons Acting as a Group is
not considered to cause a Change in Ownership of Skyward Specialty or to cause a Change in Effective Control of Skyward Specialty (as
described below). An increase in the percentage of capital stock owned by any one Person, or Persons Acting as a Group, as a result of
a transaction in which Skyward Specialty acquires its stock in exchange for property will be treated as an acquisition of stock.


 


(ii)            A
 “Change in Effective Control of Skyward Specialty” shall occur on the date either (A) a majority of members of Skyward
Specialty’s Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority
of the members of Skyward Specialty’s Board before the date of the appointment or election, or (B) any one Person, or Persons
Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person
or Persons) ownership of stock of Skyward Specialty possessing 50% or more of the total voting power of the stock of Skyward Specialty.


 


(iii)           A
 “Change in the Ownership of Assets of Skyward Specialty” shall occur on the date that any one Person acquires, or Persons
Acting as a Group acquire (or has or have acquired during the 12-month period ending on the date of the most recent acquisition by such
Person or Persons), assets from Skyward Specialty that have a total gross fair market value equal to or more than 50% of the total gross
fair market value of all of the assets of Skyward Specialty immediately before such acquisition or acquisitions. For this purpose, gross
fair market value means the value of the assets of Skyward Specialty, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.


 


The following rules of construction apply
in interpreting the definition of Change in Control:


 


(A)          A
 “Person” means any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended, other than employee benefit plans sponsored or maintained by Skyward Specialty and by
entities controlled by Skyward Specialty or an underwriter, initial purchaser or placement agent temporarily holding the capital stock
of Skyward Specialty pursuant to a registered public offering.


 


(B)           Persons
will be considered to be Persons Acting as a Group (or Group) if they are owners of a corporation that enters into a merger, consolidation,
purchase or acquisition of stock, or similar business transaction with the corporation. If a Person owns stock in both corporations that
enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting
as a Group with other shareholders only with respect to the ownership in that corporation before the transaction giving rise to the change
and not with respect to the ownership interest in the other corporation. Persons will not be considered to be acting as a Group solely
because they purchase assets of the same corporation at the same time or purchase or own stock of the same corporation at the same time,
or as a result of the same public offering.


 


(C)           A
Change in Control shall not include a transfer to a related person as described in Code section 409A or a public offering of capital stock
of Skyward Specialty.


 


(D)           For
purposes of the definition of Change in Control, Section 318(a) of the Code applies to determine stock ownership. Stock underlying
a vested option is considered owned by the individual who holds the vested option (and the stock underlying an unvested option is not
considered owned by the individual who holds the unvested option). For purposes of the preceding sentence, however, if a vested option
is exercisable for stock that is not substantially vested (as defined by Treasury Regulation §1.83-3(b) and (j)), the stock
underlying the option is not treated as owned by the individual who holds the option.


 


“Code”
means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto, the Treasury Regulations
thereunder and other relevant interpretive guidance issued by the Internal Revenue Service or the Treasury Department. Reference to any
specific section of the Code shall be deemed to include such regulations and guidance, as well as any successor section, regulations and
guidance.


 



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“Common
Stock” means shares of common stock of Skyward Specialty Insurance Group, Inc., par value $0.01 per share, and any
capital securities into which they are converted.


 


“Company” means Skyward Specialty
Insurance Group, Inc. and its Subsidiaries, except where the context otherwise requires. For purposes of determining whether a Change
in Control has occurred, Company shall mean only Skyward Specialty Insurance Group, Inc.


 


“Compensation
Committee” means the Compensation Committee of the Board.


 


“Director Limit” shall have
the meaning ascribed to it in Section 5(e) of the Plan.


 


“Dividend Equivalent” means
a right, granted to a Participant, to receive cash, Common Stock, stock Units or other property equal in value to dividends paid with
respect to a specified number of shares of Common Stock.


 


“Effective
Date” means the date the Plan is adopted by the Board.


 


“Eligible Individuals” means
(i) officers and employees of, and other individuals, including non-employee directors, who are natural persons providing bona fide
services to or for, Skyward Specialty or any of its Subsidiaries, provided that such services are not in connection with the offer
or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for Skyward Specialty’s
securities, and (ii) prospective officers, employees and service providers who have accepted offers of employment or other service
relationship from Skyward Specialty or a Subsidiary.


 


“Exchange Act” means the Securities
Exchange Act of 1934, as amended from time to time, and any successor thereto. Reference to any specific section of the Exchange Act shall
be deemed to include such regulations and guidance issued thereunder, as well as any successor section, regulations and guidance.


 


“Fair
Market Value” means, on a per share basis as of any date, unless otherwise determined by the Administrator:


 


(i)             if
the principal market for the Common Stock (as determined by the Administrator if the Common Stock is listed or admitted to trading on
more than one exchange or market) is a national securities exchange or an established securities market, unless otherwise determined by
the Administrator, the official closing price per share of Common Stock for the regular market session on that date on the principal exchange
or market on which the Common Stock is then listed or admitted to trading or, if no sale is reported for that date, on the last preceding
day on which a sale was reported, all as reported by such source as the Administrator may select;


 


(ii)            if
the principal market for the Common Stock is not a national securities exchange or an established securities market, but the Common Stock
is quoted by a national quotation system, the average of the highest bid and lowest asked prices for the Common Stock on that date as
reported on a national quotation system or, if no prices are reported for that date, on the last preceding day on which prices were reported,
all as reported by such source as the Administrator may select; or


 


(iii)           if
the Common Stock is neither listed or admitted to trading on a national securities exchange or an established securities market, nor quoted
by a national quotation system, the value determined by the Administrator in good faith by the reasonable application of a reasonable
valuation method, which method may, but need not, include taking into account an appraisal of the fair market value of the Common Stock
conducted by a nationally recognized appraisal firm selected by the Administrator.


 


Notwithstanding the preceding, for foreign, federal,
state and local income tax reporting purposes and for such other purposes as the Administrator deems appropriate, the Fair Market Value
shall be determined by the Administrator in accordance with uniform and nondiscriminatory standards adopted by it from time to time.


 


“Full Value Award” means an
Award that results in Skyward Specialty transferring the full value of a share of Common Stock under the Award, whether or not an actual
share of stock is issued. Full Value Awards shall include, but are not limited to, stock awards, stock units, Performance Shares, Performance
Units that are payable in Common Stock, and Other Stock-Based Awards for which Skyward Specialty transfers the full value of a share of
Common Stock under the Award, but shall not include Dividend Equivalents.


 



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“Incentive Stock Option” means
any stock option that is designated, in the applicable Award Agreement or the resolutions of the Administrator under which the stock option
is granted, as an “incentive stock option” within the meaning of Section 422 of the Code and otherwise meets the requirements
to be an “incentive stock option” set forth in Section 422 of the Code.


 


“IPO Date” means the date of
the underwriting agreement between Skyward Specialty and the underwriter(s) managing the initial public offering of the Common Stock,
pursuant to which the Common Stock is priced for the initial public offering.


 


“Non-Employee Director” means
a member of the Board who is not an employee of Skyward Specialty or any of its Affiliates.


 


“Nonqualified Option” means
any stock option that is not an Incentive Stock Option.


 


“Other Stock-Based Award” means
an Award of Common Stock or any other Award that is valued in whole or in part by reference to, or is otherwise based upon, shares of
Common Stock, including without limitation Dividend Equivalents and convertible debentures.


 


“Participant” means an Eligible
Individual to whom one or more Awards are or have been granted pursuant to the Plan and have not been fully settled or cancelled and,
following the death of any such person, his successors, heirs, executors and administrators, as the case may be.


 


“Performance Award” means a
Full Value Award, the grant, vesting, lapse of restrictions or settlement of which is conditioned upon the achievement of performance
objectives over a specified Performance Period and includes, without limitation, Performance Shares and Performance Units.


 


“Performance Goals” means the
performance goals established by the Administrator in connection with the grant of Awards based on Performance Metrics or other performance
criteria selected by the Administrator.


 


“Performance Period” means that
period established by the Administrator during which any Performance Goals specified by the Administrator with respect to such Award are
to be measured.


 


“Performance Metrics” means
criteria established by the Administrator for purposes of structuring goals under performance-based Awards, which may relate to any of
the following, as it may apply to an individual, one or more business units, divisions, or Affiliates, or on a company-wide basis, and
in absolute terms, relative to a base period, or relative to the performance of one or more comparable companies, peer groups, or an index
covering multiple companies:


 


(i)             Earnings
or Profitability Metrics: any derivative of sales or revenue; earnings/loss (gross, operating, net, or adjusted); book value; risk
management; earnings/loss before interest and taxes (“EBIT”); earnings/loss before interest, taxes, depreciation and amortization
(“EBITDA”); profit margins; operating margins; expense levels or ratios; provided that any of the foregoing metrics
may be adjusted to eliminate the effect of any one or more of the following: interest expense, asset impairments or investment losses,
early extinguishment of debt or stock-based compensation expense;


 


(ii)           Return
Metrics: any derivative of return on investment, assets, equity or capital (total or invested);


 


(iii)           Investment
Metrics: relative risk-adjusted investment performance; investment performance of assets under management;


 


(iv)          Cash
Flow Metrics: any derivative of operating cash flow; cash flow sufficient to achieve financial ratios or a specified cash balance;
free cash flow; cash flow return on capital; net cash provided by operating activities; cash flow per share; working capital;


 


(v)           Liquidity
Metrics: any derivative of debt leverage (including debt to capital, net debt-to-capital, debt-to-EBITDA or other liquidity ratios);


 



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(vi)          Stock
Price and Equity Metrics: any derivative of return on stockholders’ equity; total stockholder return; stock price; stock price
appreciation; market capitalization; earnings/loss per share (basic or diluted) (before or after taxes);


 


(vii)         Insurance
Related Metrics: written or earned premium growth, direct or net; written or earned premium, direct or net; new business premium,
direct or net; policy retention; premium retention; policies in force; pricing; underwriting income; investment income or yield, one or
more operating ratios (including, without limitation, loss and loss adjustment expense ratio, catastrophe loss ratio, combined ratio,
expense ratio, accident or calendar year); borrowing levels, leverage ratios or credit rating; and/or


 


(viii)        Other
Performance Metrics: economic value added; surplus levels or growth; product development; sales of particular products or services;
development of business goals; customer acquisition, satisfaction or retention; service levels or standards; leadership effectiveness;
human capital management; environmental, social and governance (ESG) metrics; business development; or the occurrence of, or participation
in the negotiation or effectuation of, any of: acquisitions and divestitures (in whole or in part), joint ventures and strategic alliances,
spin-offs, split-ups and the like, reorganizations, or recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings.


 


“Performance Shares” means a
grant of stock or stock Units the issuance, vesting or payment of which is contingent on performance as measured against predetermined
objectives over a specified Performance Period.


 


“Performance Units” means a
grant of dollar-denominated Units the value, vesting or payment of which is contingent on performance against predetermined objectives
over a specified Performance Period.


 


“Plan” means this Skyward Specialty
Insurance Group, Inc. 2022 Long-Term Incentive Plan, as set forth herein and as it may be amended from time to time.


 


“Restricted Stock” means an
Award of shares of Common Stock to a Participant that may be subject to certain transferability and other restrictions and to a risk of
forfeiture (including by reason of not satisfying certain Performance Goals).


 


“Restricted Stock Unit” means
a right granted to a Participant to receive shares of Common Stock or cash at the end of a specified deferral period, which right may
be conditioned on the satisfaction of certain requirements (including the satisfaction of certain Performance Goals).


 


“Restriction Period” means,
with respect to Full Value Awards, the period commencing on the date of grant of such Award to which vesting or transferability and other
restrictions and a risk of forfeiture apply and ending upon the expiration of the applicable vesting conditions, transferability and other
restrictions and lapse of risk of forfeiture and/or the achievement of the applicable Performance Goals (it being understood that the
Administrator may provide that vesting shall occur and/or restrictions shall lapse with respect to portions of the applicable Award during
the Restriction Period).


 


“Skyward Specialty” means Skyward
Specialty Insurance Group, Inc., a Delaware corporation.


 


“Subsidiary” means any corporation
or other entity in an unbroken chain of corporations or other entities beginning with Skyward Specialty if each of the corporations or
other entities, or group of commonly controlled corporations or other entities, other than the last corporation or other entity in the
unbroken chain then owns stock or other equity interests possessing 50% or more of the total combined voting power of all classes of stock
or other equity interests in one of the other corporations or other entities in such chain or otherwise has the power to direct the management
and policies of the entity by contract or by means of appointing a majority of the members of the board or other body that controls the
affairs of the entity; provided, however, that solely for purposes of determining whether a Participant has a Termination of Service
that is a “separation from service” within the meaning of Section 409A of the Code or whether an Eligible Individual
is eligible to be granted an Award that in the hands of such Eligible Individual would constitute a “nonqualified deferred compensation
plan” within the meaning of Section 409A of the Code , a “Subsidiary” of a corporation or other entity means all
other entities with which such corporation or other entity would be considered a single employer under Sections 414(b) or 414(c) of
the Code.


 



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“Tax Withholding Obligation”
means any federal, state, local or foreign (non-United States) income, employment or other tax or social insurance contribution required
by applicable law to be withheld in respect of Awards.


 


“Termination of Service” means
the termination of the Participant’s employment, or performance of services for, Skyward Specialty and its Subsidiaries. Temporary
absences from employment because of illness, vacation or leave of absence and transfers among Skyward Specialty and its Subsidiaries shall
not be considered Terminations of Service. With respect to any Award that constitutes a “nonqualified deferred compensation plan”
within the meaning of Section 409A of the Code, “Termination of Service” shall mean a “separation from service”
as defined under Section 409A of the Code to the extent required by Section 409A of the Code to avoid the imposition of any
tax or interest or the inclusion of any amount in income pursuant to Section 409A of the Code. A Participant has a separation from
service within the meaning of Section 409A of the Code if the Participant terminates employment with Skyward Specialty and all Subsidiaries
for any reason. A Participant will generally be treated as having terminated employment with Skyward Specialty and all Subsidiaries as
of a certain date if the Participant and the entity that employs the Participant reasonably anticipate that the Participant will perform
no further services for Skyward Specialty or any Subsidiary after such date or that the level of bona fide services that the Participant
will perform after such date (whether as an employee or an independent contractor) will permanently decrease to no more than 20 percent
(20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately
preceding 36-month period (or the full period of services if the Participant has been providing services for fewer than 36 months); provided,
however, that the employment relationship is treated as continuing while the Participant is on military leave, sick leave or other
bona fide leave of absence if the period of leave does not exceed six months or, if longer, so long as the Participant retains the right
to reemployment with Skyward Specialty or any Subsidiary.


 


“Total and Permanent Disability”
means, with respect to a Participant, except as otherwise provided in the relevant Award Agreement, that a Participant’s inability
to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment as determined by the
Skyward Specialty’s long-term disability insurance carrier.


 


“Unit” means a bookkeeping entry
used by Skyward Specialty to record and account for the grant of the following types of Awards until such time as the Award is paid, cancelled,
forfeited or terminated, as the case may be: stock units, Restricted Stock Units, Performance Units, and Performance Shares that are expressed
in terms of units of Common Stock.


 


{end of document}


 



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