Exhibit 10.5


 


SKYWARD SPECIALTY INSURANCE GROUP, INC.


 


2022 EMPLOYEE STOCK PURCHASE PLAN


 






     


     


    

 


Table
of Contents


 


Page


 


		1.	Establishment, Purpose and Term of Plan	1 





 


		1.1	Establishment	1



 


		1.2	Purpose	1



 


		1.3	Term of Plan	1



 


		2.	Definitions and Construction	1



 


		2.1	Definitions	1



 


		2.2	Construction	5



 


		3.	Administration	5



 


		3.1	Administration by the Committee	5



 


		3.2	Authority of Officers	6



 


		3.3	Power to Adopt Sub-Plans or Varying Terms with Respect to Non-U.S. Employees	6



 


		3.4	Power to Establish Separate Offerings with Varying Terms	6



 


		3.5	Policies and Procedures Established by the Company	6



 


		3.6	Indemnification	7



 


		4.	Shares Subject to Plan	7



 


		4.1	Maximum Number of Shares Issuable	7



 


		4.2	Annual Increase in Maximum Number of Shares Issuable	7



 


		4.3	Adjustments for Changes in Capital Structure	8



 


		5.	Eligibility	8



 


		5.1	Employees Eligible to Participate	8



 


		5.2	Exclusion of Certain Stockholders	8



 


		5.3	Determination by Company	8



 


		6.	Offerings	9



 


		7.	Participation in the Plan	9



 


		7.1	Initial Participation	9



 


		7.2	Continued Participation	9



 


		8.	Right to Purchase Shares	10



 


		8.1	Grant of Purchase Right	10



 


		8.2	Calendar Year Purchase Limitation	10



 






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		9.	Purchase Price	10



 


		10.	Accumulation of Purchase Price through Payroll Deduction	11



 


		10.1	Amount of Payroll Deductions	11



 


		10.2	Commencement of Payroll Deductions	11



 


		10.3	Election to Decrease or Stop Payroll Deductions	11



 


		10.4	Administrative Suspension of Payroll Deductions	11



 


		10.5	Participant Accounts	12



 


		10.6	No Interest Paid	12



 


		11.	Purchase of Shares	12



 


		11.1	Exercise of Purchase Right	12



 


		11.2	Pro Rata Allocation of Shares	13



 


		11.3	Delivery of Title to Shares	13



 


		11.4	Return of Plan Account Balance	13



 


		11.5	Tax Withholding	13



 


		11.6	Expiration of Purchase Right	13



 


		11.7	Provision of Reports and Stockholder Information to Participants	13



 


		12.	Withdrawal from Plan	14



 


		12.1	Voluntary Withdrawal from the Plan	14



 


		12.2	Return of Plan Account Balance	14



 


		13.	Termination of Employment or Eligibility	14



 


		14.	Effect of Change in Control on Purchase Rights	14



 


		15.	Nontransferability of Purchase Rights	15



 


		16.	Compliance with Securities Law	15



 


		17.	Rights as a Stockholder and Employee	15



 


		18.	Notification of Disposition of Shares	16



 


		19.	Legends	16



 


		20.	Designation of Beneficiary	16



 


		20.1	Designation Procedure	16



 


		20.2	Absence of Beneficiary Designation	17



 


		21.	Notices	17



 


		22.	Amendment or Termination of the Plan	17



 






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SKYWARD SPECIALTY INSURANCE GROUP, INC.


 


2022 EMPLOYEE STOCK PURCHASE PLAN


 


1.             Establishment,
Purpose and Term of Plan.


 


1.1           Establishment. The
Skyward Specialty Insurance Group, Inc. 2022 Employee Stock Purchase Plan (the “Plan”) is hereby
established effective as of  September 23, 2022, the date of its approval by the
stockholders of the Company (the “Effective Date”).


 


1.2           Purpose.
The purpose of the Plan is to advance the interests of the Company and its stockholders by providing an incentive to attract, retain
and reward Eligible Employees of the Participating Company Group and by motivating such persons to contribute to the growth and profitability
of the Participating Company Group. The Plan provides such Eligible Employees with an opportunity to acquire a proprietary interest in
the Company through the purchase of Stock. The Company intends that the Plan qualify as an “employee stock purchase plan”
under Section 423 of the Code (including any amendments or replacements of such section), and the Plan shall be so construed.


 


1.3           Term
of Plan. The Plan shall continue in effect until its termination by the Committee.


 


2.             Definitions
and Construction.


 


2.1           Definitions.
Any term not expressly defined in the Plan but defined for purposes of Section 423 of the Code shall have the same definition
herein. Whenever used herein, the following terms shall have their respective meanings set forth below:


 


(a)           “Board”
means the Board of Directors of the Company.


 


(b)           “Change
in Control” means the occurrence of any one or a combination of the following:


 


(i)             any
 “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial
owner” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of
the Company representing more than fifty percent (50%) of the total Fair Market Value or total combined voting power of the Company’s
then-outstanding securities entitled to vote generally in the election of Directors; provided, however, that a Change in Control shall
not be deemed to have occurred if such degree of beneficial ownership results from any of the following: (A) an acquisition by any
person who on the Effective Date is the beneficial owner of more than fifty percent (50%) of such voting power, (B) any acquisition
directly from the Company, including, without limitation, pursuant to or in connection with a public offering of securities, (C) any
acquisition by the Company, (D) any acquisition by a trustee or other fiduciary under an employee benefit plan of a Participating
Company or (E) any acquisition by an entity owned directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of the voting securities of the Company; or


 






     


     


    

 


(ii)            an
Ownership Change Event or series of related Ownership Change Events (collectively, a “Transaction”) in which
the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction direct or indirect
beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote
generally in the election of Directors or, in the case of an Ownership Change Event described in Section 2.1(p)(iii), the entity
to which the assets of the Company were transferred (the “Transferee”), as the case may be; or


 


(iii)           approval
by the stockholders of a plan of complete liquidation or dissolution of the Company;


 


provided, however, that a Change in Control shall be deemed not to
include a transaction described in subsections (i) or (ii) of this Section 2.1(b) in which a majority of the members
of the board of directors of the continuing, surviving or successor entity, or parent thereof, immediately after such transaction is
comprised of Incumbent Directors.


 


For purposes of the preceding sentence, indirect
beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more
corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or
more subsidiary corporations or other business entities. The Committee shall determine whether multiple acquisitions of the voting securities
of the Company and/or multiple Ownership Change Events are related and to be treated in the aggregate as a single Change in Control,
and its determination shall be final, binding and conclusive.


 


(c)           “Code”
means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.


 


(d)           “Committee”
means the Compensation Committee and such other committee or subcommittee of the Board, if any, duly appointed to administer the
Plan and having such powers in each instance as shall be specified by the Board. If, at any time, there is no committee of the Board
then authorized or properly constituted to administer the Plan, the Board shall exercise all of the powers of the Committee granted herein,
and, in any event, the Board may in its discretion exercise any or all of such powers.


 


(e)           “Company”
means Skyward Specialty Insurance Group, Inc., a Delaware corporation, or any successor corporation thereto.


 


(f)            “Compensation”
means, with respect to any Offering Period, regular base wages or salary, overtime payments, shift premiums and payments for paid
time off, calculated before deduction of (i) any income or employment tax withholdings or (ii) any amounts deferred pursuant
to Section 401(k) or Section 125 of the Code. Compensation shall be limited to such amounts actually payable in cash or
deferred during the Offering Period. Compensation shall not include (i) sign-on bonuses, annual or other incentive bonuses, commissions,
profit-sharing distributions or other incentive-type payments, (ii) any contributions made by a Participating Company on the Participant’s
behalf to any employee benefit or welfare plan now or hereafter established (other than amounts deferred pursuant to Section 401(k) or
Section 125 of the Code), (iii) payments in lieu of notice, payments pursuant to a severance agreement, termination pay, moving
allowances, relocation payments, or (iv) any amounts directly or indirectly paid pursuant to the Plan or any other stock purchase,
stock option or other stock-based compensation plan, or any other compensation not expressly included by this Section.


 






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(g)           “Eligible
Employee” means an Employee who meets the requirements set forth in Section 5 for eligibility to participate in the
Plan.


 


(h)           “Employee”
means a person treated as an employee of a Participating Company for purposes of Section 423 of the Code. A Participant shall
be deemed to have ceased to be an Employee either upon an actual termination of employment or upon the corporation employing the Participant
ceasing to be a Participating Company. For purposes of the Plan, an individual shall not be deemed to have ceased to be an Employee while
on any military leave, sick leave, or other bona fide leave of absence approved by the Company of ninety (90) days or less. If an individual’s
leave of absence exceeds ninety (90) days, the individual shall be deemed to have ceased to be an Employee on the ninety-first (91st)
day of such leave unless the individual’s right to reemployment with the Participating Company Group is guaranteed either by statute
or by contract.


 


(i)            “Fair
Market Value” means, as of any date:


 


(i)             If,
on such date, the Stock is listed or quoted on a national or regional securities exchange or quotation system, the closing price of a
share of Stock as quoted on the national or regional securities exchange or quotation system constituting the primary market for the
Stock, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not
fall on a day on which the Stock has traded on such securities exchange or quotation system, the date on which the Fair Market Value
is established shall be the last day on which the Stock was so traded or quoted prior to the relevant date, or such other appropriate
day as determined by the Committee, in its discretion.


 


(ii)            If,
on the relevant date, the Stock is not then listed on a national or regional securities exchange or quotation system, the Fair Market
Value of a share of Stock shall be as determined in good faith by the Committee.


 


(j)            “Incumbent
Director” means a director who either (i) is a member of the Board as of the Effective Date or (ii) is elected,
or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such
election or nomination (but excluding a director who was elected or nominated in connection with an actual or threatened proxy contest
relating to the election of directors of the Company).


 


(k)           “Non-United
States Offering” means a separate Offering covering Eligible Employees of one or more Participating Companies whose Eligible
Employees are subject to a prohibition under applicable law on payroll deductions, as described in Section 11.1(b).


 


(l)            “Offering”
means an offering of Stock pursuant to the Plan, as provided in Section 6.


 






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(m)          “Offering
Date” means, for any Offering Period, the first day of such Offering Period.


 


(n)           “Offering
Period” means a period, established by the Committee in accordance with Section 6, during which an Offering is outstanding.


 


(o)           “Officer”
means any person designated by the Board as an officer of the Company.


 


(p)           “Ownership
Change Event” means the occurrence of any of the following with respect to the Company: (i) the direct or indirect
sale or exchange in a single or series of related transactions by the stockholders of the Company of securities of the Company representing
more than fifty percent (50%) of the total combined voting power of the Company’s then outstanding securities entitled to vote
generally in the election of Directors; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale,
exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more
subsidiaries of the Company).


 


(q)           “Parent
Corporation” means any present or future “parent corporation” of the Company, as defined in Section 424(e) of
the Code.


 


(r)            “Participant”
means an Eligible Employee who has become a participant in an Offering Period in accordance with Section 7 and remains a participant
in accordance with the Plan.


 


(s)           “Participating
Company” means the Company and any Parent Corporation or Subsidiary Corporation designated by the Committee as a corporation
the Employees of which may, if Eligible Employees, participate in the Plan. The Committee shall have the discretion to determine from
time to time which Parent Corporations or Subsidiary Corporations shall be Participating Companies. The Committee shall designate from
time to time and set forth in Appendix A to this Plan those Participating Companies whose Eligible Employees may participate in the Plan.


 


(t)            “Participating
Company Group” means, at any point in time, the Company and all other corporations collectively which are then Participating
Companies.


 


(u)           “Purchase
Date” means, for any Offering Period, the last day of such Offering Period, or, if so determined by the Committee, the
last day of each Purchase Period occurring within such Offering Period.


 


(v)           “Purchase
Period” means a period, established by the Committee in accordance with Section 6, included within an Offering Period
and on the final date of which outstanding Purchase Rights are exercised.


 


(w)          “Purchase
Price” means the price at which a share of Stock may be purchased under the Plan, as determined in accordance with Section 9.


 






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(x)           “Purchase
Right” means an option granted to a Participant pursuant to the Plan to purchase such shares of Stock as provided in Section 8,
which the Participant may or may not exercise during the Offering Period in which such option is outstanding. Such option arises from
the right of a Participant to withdraw any payroll deductions or other funds accumulated on behalf of the Participant and not previously
applied to the purchase of Stock under the Plan, and to terminate participation in the Plan at any time during an Offering Period.


 


(y)           “Securities
Act” means the Securities Act of 1933, as amended.


 


(z)            “Stock”
means the common stock of Skyward Specialty Insurance Group, Inc., as adjusted from time to time in accordance with Section 4.3.


 


(aa)         “Subscription
Agreement” means a written or electronic agreement, in such form as specified by the Company, stating an Employee’s
election to participate in the Plan and authorizing payroll deductions under the Plan from the Employee’s Compensation or other
method of payment authorized by the Committee pursuant to Section 11.1(b).


 


(bb)        “Subscription
Date” means the last business day prior to the Offering Date of an Offering Period or such earlier date as the Company
shall establish.


 


(cc)         “Subsidiary
Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of
the Code.


 


2.2           Construction.
Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision
of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.
Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.


 


3.             Administration.


 


3.1           Administration
by the Committee. The Plan shall be administered by the Committee. All questions of interpretation of the Plan, of any form of agreement
or other document employed by the Company in the administration of the Plan, or of any Purchase Right shall be determined by the Committee,
and such determinations shall be final, binding and conclusive upon all persons having an interest in the Plan or the Purchase Right,
unless fraudulent or made in bad faith. Subject to the provisions of the Plan, the Committee shall determine all of the relevant terms
and conditions of Purchase Rights; provided, however, that all Participants granted Purchase Rights pursuant to an Offering shall have
the same rights and privileges within the meaning of Section 423(b)(5) of the Code. Any and all actions, decisions and determinations
taken or made by the Committee in the exercise of its discretion pursuant to the Plan or any agreement thereunder (other than determining
questions of interpretation pursuant to the second sentence of this Section 3.1) shall be final, binding and conclusive upon all
persons having an interest therein. All expenses incurred in connection with the administration of the Plan shall be paid by the Company.


 






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3.2           Authority
of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation,
determination or election that is the responsibility of or that is allocated to the Company herein, provided that the Officer has apparent
authority with respect to such matter, right, obligation, determination or election.


 


3.3           Power
to Adopt Sub-Plans or Varying Terms with Respect to Non-U.S. Employees. The Committee shall have the power, in its discretion, to
adopt one or more sub-plans of the Plan as the Committee deems necessary or desirable to comply with the laws or regulations, tax policy,
accounting principles or custom of foreign jurisdictions applicable to employees of a subsidiary business entity of the Company, provided
that any such sub-plan shall not be within the scope of an “employee stock purchase plan” within the meaning of Section 423
of the Code. Any of the provisions of any such sub-plan may supersede the provisions of this Plan, other than Section 4. Except
as superseded by the provisions of a sub-plan, the provisions of this Plan shall govern such sub-plan. Alternatively and in order to
comply with the laws of a foreign jurisdiction, the Committee shall have the power, in its discretion, to grant Purchase Rights in an
Offering to citizens or residents of a non-U.S. jurisdiction (without regard to whether they are also citizens of the United States or
resident aliens) that provide terms which are less favorable than the terms of Purchase Rights granted under the same Offering to Employees
resident in the United States.


 


3.4           Power
to Establish Separate Offerings with Varying Terms. The Committee shall have the power, in its discretion, to establish separate,
simultaneous or overlapping Offerings having different terms and conditions and to designate the Participating Company or Companies that
may participate in a particular Offering, provided that each Offering shall individually comply with the terms of the Plan and the requirements
of Section 423(b)(5) of the Code that all Participants granted Purchase Rights pursuant to such Offering shall have the same
rights and privileges within the meaning of such section.


 


3.5           Policies
and Procedures Established by the Company. Without regard to whether any Participant’s Purchase Right may be considered adversely
affected, the Company may, from time to time, consistent with the Plan and the requirements of Section 423 of the Code, establish,
change or terminate such rules, guidelines, policies, procedures, limitations, or adjustments as deemed advisable by the Company, in
its discretion, for the proper administration of the Plan, including, without limitation, (a) a minimum payroll deduction amount
required for participation in an Offering, (b) a limitation on the frequency or number of changes permitted in the rate of payroll
deduction during an Offering, (c) an exchange ratio applicable to amounts withheld or paid in a currency other than United States
dollars, (d) a payroll deduction greater than or less than the amount designated by a Participant in order to adjust for the Company’s
delay or mistake in processing a Subscription Agreement or in otherwise effecting a Participant’s election under the Plan or as
advisable to comply with the requirements of Section 423 of the Code, and (e) determination of the date and manner by which
the Fair Market Value of a share of Stock is determined for purposes of administration of the Plan. All such actions by the Company shall
be taken consistent with the requirements under Section 423(b)(5) of the Code that all Participants granted Purchase Rights
pursuant to an Offering shall have the same rights and privileges within the meaning of such section, except as otherwise permitted by
Section 3.3 and the regulations under Section 423 of the Code.


 






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3.6           Indemnification.
In addition to such other rights of indemnification as they may have as members of the Board or the Committee or as officers or employees
of the Participating Company Group, to the extent permitted by applicable law, members of the Board or the Committee and any officers
or employees of the Participating Company Group to whom authority to act for the Board, the Committee or the Company is delegated shall
be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them
may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder,
and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected
by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as
to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional
misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person
shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.


 


4.             Shares
Subject to Plan.


 


4.1           Maximum
Number of Shares Issuable. Subject to adjustment as provided in Sections 4.2 and 4.3, the maximum aggregate number of shares
of Stock that may be issued under the Plan shall be [●]1
and shall consist of authorized but unissued or reacquired shares of Stock, or any combination thereof. If an outstanding
Purchase Right for any reason expires or is terminated or canceled, the shares of Stock allocable to the unexercised portion of that
Purchase Right shall again be available for issuance under the Plan.


 


4.2           Annual
Increase in Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.3, the maximum aggregate number
of shares of Stock that may be issued under the Plan as set forth in Section 4.1 shall be cumulatively increased on January 1,
2023 and on each subsequent January 1, through and including January 1, 2032, by a number of shares (the “Annual Increase”)
equal to the smallest of (a) one percent (1%) of the number of shares of Stock issued and outstanding on the immediately preceding
December 31, (b) 214,500 shares, or (c) an amount determined by the Board.


 


 






1
This number shall equal 1% 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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4.3           Adjustments
for Changes in Capital Structure. Subject to any required action by the stockholders of the Company and the requirements of Section 424
of the Code to the extent applicable, in the event of any change in the Stock effected without receipt of consideration by the Company,
whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split,
reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure
of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock
(excepting regular, periodic cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and
proportionate adjustments shall be made in the number and kind of shares subject to the Plan, the Annual Increase, the limit on the shares
which may be purchased by any Participant during an Offering (as described in Sections 8.1 and 8.2) and each Purchase Right, and
in the Purchase Price in order to prevent dilution or enlargement of Participants’ rights under the Plan. For purposes of the foregoing,
conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the
Company.” If a majority of the shares which are of the same class as the shares that are subject to outstanding Purchase Rights
are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation
(the “New Shares”),
the Committee may unilaterally amend the outstanding Purchase Rights to provide that such Purchase Rights are for New Shares. In the
event of any such amendment, the number of shares subject to, and the exercise price per share of, the outstanding Purchase Rights shall
be adjusted in a fair and equitable manner as determined by the Committee, in its discretion. Any fractional share resulting from an
adjustment pursuant to this Section shall be rounded down to the nearest whole number, and in no event may the Purchase Price be
decreased to an amount less than the par value, if any, of the stock subject to the Purchase Right. The adjustments determined by the
Committee pursuant to this Section 4.3 shall be final, binding and conclusive.


 


5.             Eligibility.


 


5.1           Employees
Eligible to Participate. Each Employee of a Participating Company is eligible to participate in the Plan and shall be deemed an Eligible
Employee, except the following:


 


(a)           Any
Employee who is customarily employed by the Participating Company Group for twenty (20) hours or less per week; or


 


(b)           Any
Employee who is customarily employed by the Participating Company Group for not more than five (5) months in any calendar year.


 


5.2           Exclusion
of Certain Stockholders. Notwithstanding any provision of the Plan to the contrary, no Employee shall be treated as an Eligible Employee
and granted a Purchase Right under the Plan if, immediately after such grant, the Employee would own, or hold options to purchase, stock
of the Company or of any Parent Corporation or Subsidiary Corporation possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of such corporation, as determined in accordance with Section 423(b)(3) of the Code.
For purposes of this Section 5.2, the attribution rules of Section 424(d) of the Code shall apply in determining
the stock ownership of such Employee.


 


5.3           Determination
by Company. The Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has
ceased to be an Employee or an Eligible Employee and the effective date of such individual’s attainment or termination of such
status, as the case may be. For purposes of an individual’s participation in or other rights, if any, under the Plan as of the
time of the Company’s determination of whether or not the individual is an Employee, all such determinations by the Company shall
be final, binding and conclusive as to such rights, if any, notwithstanding that the Company or any court of law or governmental agency
subsequently makes a contrary determination as to such individual’s status as an Employee.


 






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6.             Offerings.


 


The Plan shall be implemented by sequential Offerings
of approximately six (6) months’ duration or such other duration as the Committee shall determine. Offering Periods shall
commence on or about the first (1st) days of March and September of each year and end on or about the thirtieth last day of
the next February and August respectively, occurring thereafter. Notwithstanding the foregoing, the Committee may establish
additional or alternative concurrent, sequential or overlapping Offering Periods, a different duration for one or more Offering Periods
or different commencing or ending dates for such Offering Periods; provided, however, that no Offering Period may have a duration exceeding
twenty-seven (27) months. If the Committee shall so determine in its discretion, each Offering Period may consist of two (2) or
more consecutive Purchase Periods having such duration as the Committee shall specify, and the last day of each such Purchase Period
shall be a Purchase Date. If the first or last day of an Offering Period or a Purchase Period is not a day on which the principal stock
exchange or quotation system on which the Stock is then listed is open for trading, the Company shall specify the trading day that will
be deemed the first or last day, as the case may be, of the Offering Period or Purchase Period.


 


7.             Participation
in the Plan.


 


7.1           Initial
Participation. An Eligible Employee may become a Participant in an Offering Period by delivering a properly completed written or
electronic Subscription Agreement to the Company office or representative designated by the Company (including a third-party administrator
designated by the Company) not later than the close of business on the Subscription Date established by the Company for that Offering
Period. An Eligible Employee who does not deliver a properly completed Subscription Agreement in the manner permitted or required on
or before the Subscription Date for an Offering Period shall not participate in the Plan for that Offering Period or for any subsequent
Offering Period unless the Eligible Employee subsequently delivers a properly completed Subscription Agreement to the appropriate Company
office or representative on or before the Subscription Date for such subsequent Offering Period. An Employee who becomes an Eligible
Employee after the Offering Date of an Offering Period shall not be eligible to participate in that Offering Period but may participate
in any subsequent Offering Period provided the Employee is still an Eligible Employee as of the Offering Date of such subsequent Offering
Period.


 


7.2           Continued
Participation. A Participant shall automatically participate in the next Offering Period commencing immediately after the final Purchase
Date of each Offering Period in which the Participant participates provided that the Participant remains an Eligible Employee on the
Offering Date of the new Offering Period and has not either (a) withdrawn from the Plan pursuant to Section 12.1, or (b) terminated
employment or otherwise ceased to be an Eligible Employee as provided in Section 13. A Participant who may automatically participate
in a subsequent Offering Period, as provided in this Section, is not required to deliver any additional Subscription Agreement for the
subsequent Offering Period in order to continue participation in the Plan. However, a Participant may deliver a new Subscription Agreement
for a subsequent Offering Period in accordance with the procedures set forth in Section 7.1 if the Participant desires to change
any of the elections contained in the Participant’s then effective Subscription Agreement.


 






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8.             Right
to Purchase Shares.


 


8.1           Grant
of Purchase Right. Except as otherwise provided below, on the Offering Date of each Offering Period, each Participant in such Offering
Period shall be granted automatically a Purchase Right consisting of an option to purchase the lesser of (a) that number of whole
shares of Stock determined by dividing the Dollar Limit (determined as provided below) by the Fair Market Value of a share of Stock on
such Offering Date or (b) the Share Limit (determined as provided below). The Committee may, in its discretion and prior to the
Offering Date of any Offering Period, (i) change the method of, or any of the foregoing factors in, determining the number of shares
of Stock subject to Purchase Rights to be granted on such Offering Date, or (ii) specify a maximum aggregate number of shares that
may be purchased by all Participants in an Offering or on any Purchase Date within an Offering Period. No Purchase Right shall be granted
on an Offering Date to any person who is not, on such Offering Date, an Eligible Employee. For the purposes of this Section, the “Dollar
Limit” shall be determined by multiplying $2,083.33 by the number of months (rounded to the nearest whole month) in the
Offering Period and rounding to the nearest whole dollar, and the “Share Limit” shall be determined by multiplying
300 shares by the number of months (rounded to the nearest whole month) in the Offering Period and rounding to the nearest whole share.


 


8.2           Calendar
Year Purchase Limitation. Notwithstanding any provision of the Plan to the contrary, no Participant shall be granted a Purchase Right
which permits his or her right to purchase shares of Stock under the Plan to accrue at a rate which, when aggregated with such Participant’s
rights to purchase shares under all other employee stock purchase plans of a Participating Company intended to meet the requirements
of Section 423 of the Code, exceeds Twenty-Five Thousand Dollars ($25,000) in Fair Market Value (or such other limit, if any, as
may be imposed by the Code) for each calendar year in which such Purchase Right is outstanding at any time. For purposes of the preceding
sentence, the Fair Market Value of shares purchased during a given Offering Period shall be determined as of the Offering Date for such
Offering Period. The limitation described in this Section shall be applied in conformance with Section 423(b)(8) of the
Code and the regulations thereunder.


 


9.             Purchase
Price.


 


The Purchase Price at which each share of Stock
may be acquired in an Offering Period upon the exercise of all or any portion of a Purchase Right shall be established by the Committee;
provided, however, that the Purchase Price on each Purchase Date shall not be less than eighty-five percent (85%) of the lesser of (a) the
Fair Market Value of a share of Stock on the Offering Date of the Offering Period or (b) the Fair Market Value of a share of Stock
on the Purchase Date. Subject to adjustment as provided by the Plan and unless otherwise provided by the Committee, the Purchase Price
for each Offering Period shall be eighty-five percent (85%) of the lesser of (a) the Fair Market Value of a share of Stock on the
Offering Date of the Offering Period or (b) the Fair Market Value of a share of Stock on the Purchase Date.


 






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10.           Accumulation
of Purchase Price through Payroll Deduction.


 


Except as provided in Section 11.1(b) with
respect to a Non-United States Offering, shares of Stock acquired pursuant to the exercise of all or any portion of a Purchase Right
may be paid for only by means of payroll deductions from the Participant’s Compensation accumulated during the Offering Period
for which such Purchase Right was granted, subject to the following:


 


10.1         Amount
of Payroll Deductions. Except as otherwise provided herein, the amount to be deducted under the Plan from a Participant’s Compensation
on each pay day during an Offering Period shall be determined by the Participant’s Subscription Agreement. The Subscription Agreement
shall set forth the percentage of the Participant’s Compensation to be deducted on each pay day during an Offering Period in whole
percentages of not less than one percent (1%) (except as a result of an election pursuant to Section 10.3 to stop payroll deductions
effective following the first pay day during an Offering) or more than fifteen percent (15%). The Committee may change the foregoing
limits on payroll deductions effective as of any Offering Date.


 


10.2         Commencement
of Payroll Deductions. Payroll deductions shall commence on the first pay day following the Offering Date and shall continue to the
end of the Offering Period unless sooner altered or terminated as provided herein.


 


10.3         Election
to Decrease or Stop Payroll Deductions. During an Offering Period, a Participant may elect to decrease the rate of or to stop deductions
from his or her Compensation by delivering to the Company office or representative designated by the Company (including a third-party
administrator designated by the Company) an amended Subscription Agreement authorizing such change on or before the “Change Notice
Date.” The “Change Notice Date” shall be a date prior to the beginning of the first pay period for which
such election is to be effective as established by the Company from time to time and announced to the Participants. A Participant who
elects, effective following the first pay day of an Offering Period, to decrease the rate of his or her payroll deductions to zero percent
(0%) shall nevertheless remain a Participant in such Offering Period unless the Participant withdraws from the Plan as provided in Section 12.1.


 


10.4         Administrative
Suspension of Payroll Deductions. The Company may, in its discretion, suspend a Participant’s payroll deductions under the
Plan as the Company deems advisable to avoid accumulating payroll deductions in excess of the amount that could reasonably be anticipated
to purchase the maximum number of shares of Stock permitted (a) under the Participant’s Purchase Right or (b) during
a calendar year under the limit set forth in Section 8.2. Unless the Participant has either withdrawn from the Plan as provided
in Section 12.1 or has ceased to be an Eligible Employee, suspended payroll deductions shall be resumed at the rate specified in
the Participant’s then effective Subscription Agreement either (i) at the beginning of the next Offering Period if the reason
for suspension was clause (a) in the preceding sentence, or (ii) at the beginning of the next Offering Period having a first
Purchase Date that falls within the subsequent calendar year if the reason for suspension was clause (b) in the preceding sentence.


 






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10.5         Participant
Accounts. Individual bookkeeping accounts shall be maintained for each Participant. All payroll deductions from a Participant’s
Compensation (and other amounts received from a non-United States Participant pursuant to Section 11.1(b)) shall be credited to
such Participant’s Plan account and shall be deposited with the general funds of the Company. All such amounts received or held
by the Company may be used by the Company for any corporate purpose.


 


10.6         No
Interest Paid. Interest shall not be paid on sums deducted from a Participant’s Compensation pursuant to the Plan or otherwise
credited to the Participant’s Plan account.


 


11.           Purchase
of Shares.


 


11.1         Exercise
of Purchase Right.


 


(a)           Generally.
Except as provided in Section 11.1(b), on each Purchase Date of an Offering Period, each Participant who has not withdrawn from
the Plan and whose participation in the Offering has not otherwise terminated before such Purchase Date shall automatically acquire pursuant
to the exercise of the Participant’s Purchase Right the number of whole shares of Stock determined by dividing (a) the total
amount of the Participant’s payroll deductions accumulated in the Participant’s Plan account during the Offering Period and
not previously applied toward the purchase of Stock by (b) the Purchase Price. However, in no event shall the number of shares purchased
by the Participant during an Offering Period exceed the number of shares subject to the Participant’s Purchase Right. No shares
of Stock shall be purchased on a Purchase Date on behalf of a Participant whose participation in the Offering or the Plan has terminated
before such Purchase Date.


 


(b)           Purchase
by Non-United States Participants for Whom Payroll Deductions Are Prohibited by Applicable Law. Notwithstanding Section 11.1(a),
where payroll deductions on behalf of Participants who are citizens or residents of countries other than the United States (without regard
to whether they are also citizens of the United States or resident aliens) are prohibited by applicable law, the Committee may establish
a separate Offering (a “Non-United States Offering”) covering all Eligible Employees of one or more Participating
Companies subject to such prohibition on payroll deductions. The Non-United States Offering shall provide another method for payment
of the Purchase Price with such terms and conditions as shall be administratively convenient and comply with applicable law. On each
Purchase Date of the Offering Period applicable to a Non-United States Offering, each Participant who has not withdrawn from the Plan
and whose participation in such Offering Period has not otherwise terminated before such Purchase Date shall automatically acquire pursuant
to the exercise of the Participant’s Purchase Right a number of whole shares of Stock determined in accordance with Section 11.1(a) to
the extent of the total amount of the Participant’s Plan account balance accumulated during the Offering Period in accordance with
the method established by the Committee and not previously applied toward the purchase of Stock. However, in no event shall the number
of shares purchased by a Participant during such Offering Period exceed the number of shares subject to the Participant’s Purchase
Right. The Company shall refund to a Participant in a Non-United States Offering in accordance with Section 11.4 any excess Purchase
Price payment received from such Participant.


 






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11.2         Pro
Rata Allocation of Shares. If the number of shares of Stock which might be purchased by all Participants on a Purchase Date exceeds
the number of shares of Stock remaining available for issuance under the Plan or the maximum aggregate number of shares of Stock that
may be purchased on such Purchase Date pursuant to a limit established by the Committee pursuant to Section 8.1, the Company shall
make a pro rata allocation of the shares available in as uniform a manner as practicable and as the Company determines to be equitable.
Any fractional share resulting from such pro rata allocation to any Participant shall be disregarded.


 


11.3         Delivery
of Title to Shares. Subject to any governing rules or regulations, as soon as practicable after each Purchase Date, the Company
shall issue or cause to be issued to or for the benefit of each Participant the shares of Stock acquired by the Participant on such Purchase
Date by means of one or more of the following: (a) by delivering to the Participant evidence of book entry shares of Stock credited
to the account of the Participant, (b) by depositing such shares of Stock for the benefit of the Participant with any broker with
which the Participant has an account relationship, or (c) by delivering such shares of Stock to the Participant in certificate form.


 


11.4         Return
of Plan Account Balance. Any cash balance remaining in a Participant’s Plan account following any Purchase Date shall be refunded
to the Participant as soon as practicable after such Purchase Date. However, if the cash balance to be returned to a Participant pursuant
to the preceding sentence is less than the amount that would have been necessary to purchase an additional whole share of Stock on such
Purchase Date, the Company may retain the cash balance in the Participant’s Plan account to be applied toward the purchase of shares
of Stock in the subsequent Purchase Period or Offering Period.


 


11.5         Tax
Withholding. At the time a Participant’s Purchase Right is exercised, in whole or in part, or at the time a Participant disposes
of some or all of the shares of Stock he or she acquires under the Plan, the Participant shall make adequate provision for the federal,
state, local and foreign taxes (including social insurance), if any, required to be withheld by any Participating Company upon exercise
of the Purchase Right or upon such disposition of shares, respectively. A Participating Company may, but shall not be obligated to, withhold
from the Participant’s compensation the amount necessary to meet such withholding obligations.


 


11.6         Expiration
of Purchase Right. Any portion of a Participant’s Purchase Right remaining unexercised after the end of the Offering Period
to which the Purchase Right relates shall expire immediately upon the end of the Offering Period.


 


11.7         Provision
of Reports and Stockholder Information to Participants. Each Participant who has exercised all or part of his or her Purchase Right
shall receive, as soon as practicable after the Purchase Date, a report of such Participant’s Plan account setting forth the total
amount credited to his or her Plan account prior to such exercise, the number of shares of Stock purchased, the Purchase Price for such
shares, the date of purchase and the cash balance, if any, remaining immediately after such purchase that is to be refunded or retained
in the Participant’s Plan account pursuant to Section 11.4. The report required by this Section may be delivered in such
form and by such means, including by electronic transmission, as the Company may determine. In addition, each Participant shall be provided
information concerning the Company equivalent to that information provided generally to the Company’s common stockholders.


 






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12.           Withdrawal
from Plan .


 


12.1         Voluntary
Withdrawal from the Plan. A Participant may withdraw from the Plan by signing and delivering to the Company office or representative
designated by the Company (including a third-party administrator designated by the Company) a written or electronic notice of withdrawal
on a form provided by the Company for this purpose. Such withdrawal may be elected at any time prior to the end of an Offering Period;
provided, however, that if a Participant withdraws from the Plan after a Purchase Date, the withdrawal shall not affect shares of Stock
acquired by the Participant on such Purchase Date. A Participant who voluntarily withdraws from the Plan is prohibited from resuming
participation in the Plan in the same Offering from which he or she withdrew, but may participate in any subsequent Offering by again
satisfying the requirements of Sections 5 and 7.1. The Company may impose, from time to time, a requirement that the notice of withdrawal
from the Plan be on file with the Company office or representative designated by the Company for a reasonable period prior to the effectiveness
of the Participant’s withdrawal.


 


12.2         Return
of Plan Account Balance. Upon a Participant’s voluntary withdrawal from the Plan pursuant to Section 12.1, the Participant’s
accumulated Plan account balance which has not been applied toward the purchase of shares of Stock shall be refunded to the Participant
as soon as practicable after the withdrawal, without the payment of any interest, and the Participant’s interest in the Plan and
the Offering shall terminate. Such amounts to be refunded in accordance with this Section may not be applied to any other Offering
under the Plan.


 


13.           Termination
of Employment or Eligibility.


 


Upon a Participant’s ceasing, prior to a Purchase
Date, to be an Employee of the Participating Company Group for any reason, including retirement, disability or death, or upon the failure
of a Participant to remain an Eligible Employee, the Participant’s participation in the Plan shall terminate immediately. In such
event, the Participant’s Plan account balance which has not been applied toward the purchase of shares of Stock shall, as soon
as practicable, be returned to the Participant or, in the case of the Participant’s death, to the Participant’s beneficiary
designated in accordance with Section 20, if any, or legal representative, and all of the Participant’s rights under the Plan
shall terminate. Interest shall not be paid on sums returned pursuant to this Section 13. A Participant whose participation has
been so terminated may again become eligible to participate in the Plan by satisfying the requirements of Sections 5 and 7.1.


 


14.           Effect
of Change in Control on Purchase Rights.


 


In the event of a Change in Control, the surviving,
continuing, successor, or purchasing corporation or parent thereof, as the case may be (the “Acquiring Corporation”),
may, without the consent of any Participant, assume or continue the Company’s rights and obligations under outstanding Purchase
Rights or substitute substantially equivalent purchase rights for the Acquiring Corporation’s stock. If the Acquiring Corporation
elects not to assume, continue or substitute for the outstanding Purchase Rights, the Purchase Date of the then current Offering Period
shall be accelerated to a date before the date of the Change in Control specified by the Committee, but the number of shares of Stock
subject to outstanding Purchase Rights shall not be adjusted. All Purchase Rights which are neither assumed or continued by the Acquiring
Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease
to be outstanding effective as of the date of the Change in Control.


 






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15.           Nontransferability
of Purchase Rights.


 


Neither payroll deductions or other amounts credited
to a Participant’s Plan account nor a Participant’s Purchase Right may be assigned, transferred, pledged or otherwise disposed
of in any manner other than as provided by the Plan or by will or the laws of descent and distribution. (A beneficiary designation pursuant
to Section 20 shall not be treated as a disposition for this purpose.) Any such attempted assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat such act as an election to withdraw from the Plan as provided
in Section 12.1. A Purchase Right shall be exercisable during the lifetime of the Participant only by the Participant.


 


16.           Compliance
with Securities Law.


 


The issuance of shares under the Plan shall be subject
to compliance with all applicable requirements of federal, state and foreign law with respect to such securities. A Purchase Right may
not be exercised if the issuance of shares upon such exercise would constitute a violation of any applicable federal, state or foreign
securities laws or other law or regulations or the requirements of any securities exchange or market system upon which the Stock may
then be listed. In addition, no Purchase Right may be exercised unless (a) a registration statement under the Securities Act shall
at the time of exercise of the Purchase Right be in effect with respect to the shares issuable upon exercise of the Purchase Right, or
(b) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Purchase Right may be issued in accordance
with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain
from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the
lawful issuance and sale of any shares under the Plan shall relieve the Company of any liability in respect of the failure to issue or
sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of a Purchase Right,
the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company.


 


17.           Rights
as a Stockholder and Employee.


 


A Participant shall have no rights as a stockholder
by virtue of the Participant’s participation in the Plan until the date of the issuance of the shares of Stock purchased pursuant
to the exercise of the Participant’s Purchase Right (as evidenced by the appropriate entry on the books of the Company or of a
duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the
record date is prior to the date such shares are issued, except as provided in Section 4.3. Nothing herein shall confer upon a Participant
any right to continue in the employ of the Participating Company Group or interfere in any way with any right of the Participating Company
Group to terminate the Participant’s employment at any time.


 






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18.           Notification
of Disposition of Shares.


 


The Company may require the Participant to give
the Company prompt notice of any disposition of shares of Stock acquired by exercise of a Purchase Right. The Company may require that
until such time as a Participant disposes of shares of Stock acquired upon exercise of a Purchase Right, the Participant shall hold all
such shares in the Participant’s name until the later of two years after the date of grant of such Purchase Right or one year after
the date of exercise of such Purchase Right. The Company may direct that the certificates evidencing shares of Stock acquired by exercise
of a Purchase Right refer to such requirement to give prompt notice of disposition.


 


19.           Legends.


 


The Company may at any time place legends or other
identifying symbols referencing any applicable federal, state or foreign securities law restrictions or any provision convenient in the
administration of the Plan on some or all of the certificates representing shares of Stock issued under the Plan. The Participant shall,
at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to a Purchase
Right in the possession of the Participant in order to carry out the provisions of this Section. Unless otherwise specified by the Company,
legends placed on such certificates may include but shall not be limited to the following:


 


“THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE
CORPORATION TO THE REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE CORPORATION IMMEDIATELY
OF ANY TRANSFER OF THE SHARES BY THE REGISTERED HOLDER HEREOF. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN
THE REGISTERED HOLDER’S NAME (AND NOT IN THE NAME OF ANY NOMINEE).”


 


20.           Designation
of Beneficiary.


 


20.1         Designation
Procedure. Subject to local laws and procedures, a Participant may file a written designation of a beneficiary who is to receive
(a) shares and cash, if any, from the Participant’s Plan account if the Participant dies subsequent to a Purchase Date but
prior to delivery to the Participant of such shares and cash, or (b) cash, if any, from the Participant’s Plan account if
the Participant dies prior to the exercise of the Participant’s Purchase Right. If a married Participant designates a beneficiary
other than the Participant’s spouse, the effectiveness of such designation may be subject to the consent of the Participant’s
spouse. A Participant may change his or her beneficiary designation at any time by written notice to the Company.


 






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20.2         Absence
of Beneficiary Designation. If a Participant dies without an effective designation pursuant to Section 20.1 of a beneficiary
who is living at the time of the Participant’s death, the Company shall deliver any shares or cash credited to the Participant’s
Plan account to the Participant’s legal representative or as otherwise required by applicable law.


 


21.           Notices.


 


All notices or other communications by a Participant
to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the Company for the receipt thereof.


 


22.           Amendment
or Termination of the Plan.


 


The Committee may at any time amend, suspend or
terminate the Plan, except that (a) no such amendment, suspension or termination shall affect Purchase Rights previously granted
under the Plan unless expressly provided by the Committee, and (b) no such amendment, suspension or termination may adversely affect
a Purchase Right previously granted under the Plan without the consent of the Participant, except to the extent permitted by the Plan
or as may be necessary to qualify the Plan as an employee stock purchase plan pursuant to Section 423 of the Code or to comply with
any applicable law, regulation or rule. In addition, an amendment to the Plan must be approved by the stockholders of the Company within
twelve (12) months of the adoption of such amendment if such amendment would authorize the sale of more shares than are then authorized
for issuance under the Plan or would change the definition of the corporations that may be designated by the Committee as Participating
Companies. Notwithstanding the foregoing, in the event that the Committee determines that continuation of the Plan or an Offering would
result in unfavorable financial accounting consequences to the Company, the Committee may, in its discretion and without the consent
of any Participant, including with respect to an Offering Period then in progress: (i) terminate the Plan or any Offering Period,
(ii) accelerate the Purchase Date of any Offering Period, (iii) reduce the discount or the method of determining the Purchase
Price in any Offering Period (e.g., by determining the Purchase Price solely on the basis of the Fair Market Value on the Purchase Date),
(iv) reduce the maximum number of shares of Stock that may be purchased in any Offering Period, or (v) take any combination
of the foregoing actions.


 






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IN WITNESS WHEREOF, the undersigned Secretary of
the Company certifies that the foregoing sets forth the Skyward Specialty Insurance Group, Inc. 2022 Employee Stock Purchase Plan
as duly adopted by the Board on September 23, 2022.


 


	 	SKYWARD
    SPECIALTY INSURANCE GROUP, INC.
	 	 	, Secretary


 






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APPENDIX A


 


Participating Companies


 


Skyward Specialty Insurance Group, Inc.


Skyward Service Company


Skyward Underwriters Agency, Inc.


 






    


     


    

 


APPENDIX B


 


FORMS OF


 


ENROLLMENT/CHANGE NOTICE/WITHDRAWAL FORM


AND


SUBSCRIPTION AGREEMENT


 






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