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8-K - FORM 8-K - UNIVERSAL INSURANCE HOLDINGS, INC. | g27167e8vk.htm |
Exhibit 10.1
NOTICE OF GRANT OF PERFORMANCE-BASED RESTRICTED STOCK AWARD
UNIVERSAL INSURANCE HOLDINGS, INC.
2009 OMNIBUS INCENTIVE PLAN
FOR GOOD AND VALUABLE CONSIDERATION, Universal Insurance Holdings, Inc. (the Company)
hereby grants, pursuant to the provisions of the Companys 2009 Omnibus Incentive Plan (the
Plan), to the Participant designated in this Notice of Grant of Performance-Based
Restricted Stock Award (the Notice) the number of shares of common stock of the Company
set forth in the Notice (the Restricted Shares), subject to certain restrictions as
outlined below in this Notice and the additional provisions set forth in the attached Terms and
Conditions of Performance-Based Restricted Stock Award (collectively, the Agreement).
The Participant acknowledges receipt of the information statement describing important provisions
of the Plan.
1.
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Participant: | Sean P. Downes | |||||
2.
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Grant Date: | March 28, 2011 | |||||
3.
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Number of Restricted Shares: | 600,000 | |||||
4.
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Vesting Schedule: |
(i) Subject to the provisions contained in Paragraphs 4, 5 and 6 of the Terms and Conditions, this
Performance-Based Restricted Stock Award shall vest, and the applicable Restrictions set forth in
the Terms and Conditions shall lapse in accordance with the following schedule, in the event the
Participant does not have a Termination of Service prior to the applicable vesting date:
Amount that Vests on the | ||
Vesting Date | Vesting Date | |
1st Anniversary of Grant Date |
200,000 shares | |
2nd Anniversary of Grant Date |
200,000 shares | |
3rd Anniversary of Grant Date |
200,000 shares |
Each anniversary of the Grant Date is hereinafter referred to as a Vesting Date).
(ii) Notwithstanding the vesting schedule above, Restricted Shares scheduled to vest on a Vesting
Date will not vest and instead will be forfeited if the Company does not realize for the fiscal
year ending immediately prior to the applicable Vesting Date, Income Before Taxes
equal to at least 2% of the amount of Direct Premiums Written, in each case as reported
in the Companys Consolidated Statement of Operations included in its audited financial statements
for the relevant year (the Performance Goal); provided, however, that for purposes of
determining whether the Performance Goal has been satisfied, the amount of Income Before Taxes will
be adjusted to exclude the effect of losses and loss adjustment expenses, net of reinsurance,
arising out of any event that has been assigned a PCS catastrophe serial number by the Property
Claims Service office occurring during the year in which performance is measured for purposes of
satisfying the relevant Performance Goal (the Performance Year), and further adjusted to
exclude any losses realized or reversed during the Performance Year in respect of any such event
that occurred during a prior year. Vesting of Restricted Shares as of each Vesting Date is
conditioned on the Committees certification in writing that the Performance Goal for the relevant
year has been achieved, as required for qualified performance-based compensation under Section
162(m) of the Internal Revenue Code of 1986, as amended (the Code). Any Restricted
Shares that fail to vest because of any of the conditions to vesting are not satisfied will be
forfeited.
5. Acceleration of Vesting on Termination of Service Without Cause or a Change in Control:
Notwithstanding the foregoing vesting schedule:
(i) in the event of the Participants Termination of Service by the Company without Cause
(as defined in the Participants employment agreement, dated January 1, 2005, with the Company),
then upon certification by the Committee that the Performance Goal for the year in which the
Participants Termination of Service has been satisfied, the Participant will vest in a pro rata
portion of the Restricted Shares that would have vested had he continued to be employed through the
applicable Vesting Date of the year following the year in which his Termination of Service occurs.
Such pro rata portion shall be determined by multiplying 200,000 by a fraction the numerator of
which is the number of days that the Participant was employed by the Company from the Grant Date
or, if later, the last Vesting Date to occur prior to his Termination of Service through and
including the date of his Termination of Service, and the denominator of which is 365. All other
Restricted Shares as to which the Restrictions have not previously lapsed pursuant to the vesting
schedule provisions above will be forfeited; and
(ii) the Performance-Based Restricted Stock Award will be deemed fully vested and no longer subject
to forfeiture in the event of a Change in Control of the Company.
6. Forfeiture: The Participants rights in any Restricted Shares as to which the Restrictions
have not lapsed pursuant to the vesting schedule provisions above, including the acceleration
provisions, shall be forfeited in full in the event of the Participants Termination of Service for
any reason other than the Participants Termination of Service by the Company without Cause.
7. Shareholder Approval: The grant of Restricted Shares shall be contingent upon the Companys
shareholders approving at the 2011 Annual Meeting of Shareholders the performance share goals and
the changes to the individual award limits and the aggregate share limit for the 2009 Plan
submitted at such meeting for approval.
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By signing below, the Participant agrees that this Performance-Based Restricted Stock Award is
granted under and governed by the terms and conditions of the Companys 2009 Omnibus Incentive Plan
and the attached Terms and Conditions.
Participant
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Universal Insurance Holdings, Inc. | |||
/s/ Sean P. Downes
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By: | /s/ Bradley I. Meier | ||
Sean P. Downes
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Title: | Bradley I. Meier, President | ||
Date: April 18, 2011
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Date: | April 18, 2011 |
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TERMS AND CONDITIONS
OF PERFORMANCE-BASED RESTRICTED STOCK AWARD
These Terms and Conditions of Performance-Based Restricted Stock Award relate to the Notice of
Grant of Performance-Based Restricted Stock Award (the Notice) attached hereto, by and
between the Company and the person identified in the Notice (the Participant).
The Board of Directors of the Company has authorized and approved the Plan, and the Plan has been
approved by the stockholders of the Company. The Committee has approved an award to the
Participant of a number of shares of the Companys common stock, conditioned upon the Participants
acceptance of the provisions set forth in the Notice and these Terms and Conditions within 60 days
after the Notice and these Terms and Conditions are presented to the Participant for review. The
Committee intends that the grant of the performance-based Restricted Shares shall constitute an
award of qualified performance-based compensation for purposes of Section 162(m) of the Code.
For purposes of the Notice and these Terms and Conditions, any reference to the Company shall
include a reference to any Affiliate.
1. Grant of Restricted Stock.
(a) Subject to the terms and conditions of the Plan, as of the Grant Date, the Company grants
to the Participant the number of Restricted Shares set forth in the Notice, subject to the
restrictions set forth in Paragraph 2 of these Terms and Conditions, the provisions of the Plan and
the other provisions contained in these Terms and Conditions. If and when the restrictions set
forth in Paragraph 2 expire in accordance with these Terms and Conditions without forfeiture of the
Restricted Shares, and upon the satisfaction of all other applicable conditions as to the
Restricted Shares, such shares shall no longer be considered Restricted Shares for purposes of
these Terms and Conditions.
(b) As soon as practicable after the Grant Date, the Company shall direct that a stock
certificate or certificates representing the applicable Restricted Shares be registered in the name
of and issued to the Participant. Such certificate or certificates shall be held in the custody of
the Company or its designee until the expiration of the applicable Restricted Period (as defined in
Paragraph 3). On or before the date of execution of the Notice, the Participant has delivered to
the Company one or more stock powers endorsed in blank relating to the Restricted Shares.
(c) Except as provided in Paragraph 1(d), in the event that a certificate for the Restricted
Shares is delivered to the Participant, such certificate shall bear the following legend (the
Legend):
The ownership and transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including forfeiture) of
the Universal Insurance Holdings, Inc. 2009 Omnibus Incentive Plan and a
Performance-Based Restricted Stock Award Notice entered into between the registered
owner and Universal Insurance Holdings, Inc. Copies of such Plan and Notice are on
file in the executive offices of Universal Insurance Holdings, Inc.
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In addition, the stock certificate or certificates for the Restricted Shares shall be subject to
such stop-transfer orders and other restrictions as the Company may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Stock is then listed, and any applicable federal or state securities law, and
the Company may cause a legend or legends to be placed on such certificate or certificates to make
appropriate reference to such restrictions.
(d) As soon as administratively practicable following the expiration of the Restricted Period
without a forfeiture of the Restricted Shares, and upon the satisfaction of all other applicable
conditions as to the Restricted Shares, including, but not limited to, the payment by the
Participant of all applicable withholding taxes, the Company shall deliver or cause to be delivered
to the Participant a certificate or certificates for the applicable Restricted Shares which shall
not bear the Legend.
2. Restrictions.
(a) The Participant shall have all rights and privileges of a stockholder as to the Restricted
Shares, including the right to vote and receive dividends or other distributions with respect to
the Restricted Shares, except that the following restrictions shall apply:
(i) the Participant shall not be entitled to delivery of the certificate or
certificates for the Restricted Shares until the expiration of the Restricted Period
without a forfeiture of the Restricted Shares and upon the satisfaction of all other
applicable conditions;
(ii) none of the Restricted Shares may be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of during the Restricted Period applicable to such shares, except as provided in Section 7.02(c) of the Plan or as otherwise permitted
by the Committee in its sole discretion or pursuant to rules adopted by the
Committee in accordance with the Plan; and
(iii) all of the Restricted Shares shall be forfeited and returned to the Company
and all rights of the Participant with respect to the Restricted Shares shall
terminate in their entirety on the terms and conditions set forth in Paragraph 4.
(b) Any attempt to dispose of Restricted Shares or any interest in the Restricted Shares in a
manner contrary to the restrictions set forth in these Terms and Conditions shall be void and of no
effect.
3. Restricted Period and Vesting.
The Restricted Period is the period beginning on the Grant Date and ending on the date
the Restricted Shares, or such applicable portion of the Restricted Shares, are deemed vested under
the vesting schedule and related performance vesting conditions set forth in the Notice. The
Restricted Shares shall be deemed vested and no longer subject to forfeiture under Paragraph 4 in
accordance with the vesting schedule set forth in the Notice or earlier in the event of a Change in
Control.
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4. Forfeiture.
(a) Subject to Paragraph 6 below, if during the Restricted Period (i) the Participant incurs a
Termination of Service other than a Termination of Service by the Company without Cause, (ii)
there occurs a material breach of the Notice or these Terms and Conditions by the Participant or
(iii) the Participant fails to meet the tax withholding obligations described in Paragraph 5(b),
all rights of the Participant to the Restricted Shares that have not vested in accordance with
Paragraph 3 as of the date of such Termination of Service or other event or occurrence shall
terminate immediately and be forfeited in their entirety.
(b) The grant of Restricted Shares shall be contingent upon the Companys shareholders
approving at the 2011 Annual Meeting of Shareholders the performance share goals and the changes to
the individual award limits and the aggregate share limit for the 2009 Plan submitted at such
meeting for approval.
(c) In the event of any forfeiture under this Paragraph 4, the certificate or certificates
representing the forfeited Restricted Shares shall be canceled to the extent of any Restricted
Shares that were forfeited.
5. Withholding.
(a) The Committee shall determine the amount of any withholding or other tax required by law
to be withheld or paid by the Company with respect to any income recognized by the Participant with
respect to the Restricted Shares.
(b) The Participant shall be required to meet any applicable tax withholding obligation in
accordance with the provisions of Section 11.05 of the Plan.
(c) Subject to any rules prescribed by the Committee, the Participant shall have the right to
elect to meet any withholding requirement (i) by having withheld from this Award at the appropriate
time that number of whole shares of common stock whose fair market value is equal to the amount of
any taxes required to be withheld with respect to such Award, (ii) by direct payment to the Company
in cash of the amount of any taxes required to be withheld with respect to such Award or (iii) by a
combination of shares and cash.
6. Committee Discretion.
Notwithstanding any provision of the Notice or these Terms and Conditions to the contrary, the
Committee shall have discretion under the Plan to waive any forfeiture of the Restricted Shares as
set forth in Paragraph 4, the Restricted Period and any other conditions set forth in the Notice or
these Terms and Conditions.
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7. Defined Terms.
Capitalized terms not otherwise defined in these Terms and Conditions shall have the meanings set
forth in the Notice to which these Terms and Conditions are attached. Capitalized terms used but
not defined in the Notice and Terms and Conditions shall have the meanings set forth in the Plan,
unless such term is defined in any employment or similar agreement between the Participant and the
Company or an Affiliate. Any terms used in the Notice and Terms and Conditions, but defined in the
Participants employment or similar agreement are incorporated herein by reference and shall be
effective for purposes of the Notice and these Terms and Conditions without regard to the continued
effectiveness of such employment or similar agreement.
8. Nonassignability.
The Restricted Shares may not be sold, assigned, transferred (other than by will or the laws of
descent and distribution, or to an inter vivos trust with respect to which the Participant is
treated as the owner under Sections 671 through 677 of the Code), pledged, hypothecated, or
otherwise encumbered or disposed of until the restrictions on such Shares, as set forth in the
Notice and Agreement, have lapsed or been removed.
9. Participant Representations.
The Participant hereby represents to the Company that the Participant has read and fully
understands the provisions of the Notice, these Terms and Conditions and the Plan and the
Participants decision to participate in the Plan is completely voluntary. Further, the
Participant acknowledges that the Participant is relying solely on his or her own advisors with
respect to the tax consequences of this restricted stock award.
10. Regulatory Restrictions on the Restricted Shares.
Notwithstanding any other provision of the Plan, the obligation of the Company to issue Restricted
Shares under the Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the right to restrict, in
whole or in part, the delivery of the Restricted Shares pursuant to these Terms and Conditions
prior to the satisfaction of all legal requirements relating to the issuance of such shares, to
their registration, qualification or listing or to an exemption from registration, qualification or
listing.
11. Miscellaneous.
(a) Notices. All notices, requests, deliveries, payments, demands and other
communications which are required or permitted to be given under these Terms and Conditions shall
be in writing and shall be either delivered personally or sent by registered or certified mail, or
by private courier, return receipt requested, postage prepaid to the parties at their respective
addresses set forth herein, or to such other address as either shall have specified by notice in
writing to the other. Notice shall be deemed duly given hereunder when delivered or mailed as
provided herein.
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(b) Waiver. The waiver by any party hereto of a breach of any provision of the Notice
or these Terms and Conditions shall not operate or be construed as a waiver of any other or
subsequent breach.
(c) Entire Agreement. These Terms and Conditions, the Notice and the Plan constitute
the entire agreement between the parties with respect to the subject matter hereof.
(d) Binding Effect; Successors. These Terms and Conditions shall inure to the benefit
of and be binding upon the parties hereto and to the extent not prohibited herein, their respective
heirs, successors, assigns and representatives. Nothing in these Terms and Conditions, express or
implied, is intended to confer on any person other than the parties hereto and as provided above,
their respective heirs, successors, assigns and representatives any rights, remedies, obligations
or liabilities.
(e) After-Adopted Company Policies. The terms of this Agreement and the grant of
Restricted Shares shall be subject to any applicable claw-back policy, share ownership or retention
policy or similar policy or arrangement adopted by the Company on or after the Grant Date.
(f) Governing Law. The Notice and these Terms and Conditions shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to contracts performed
and executed entirely in such state.
(g) Headings. The headings contained herein are for the sole purpose of convenience of
reference, and shall not in any way limit or affect the meaning or interpretation of any of the
terms or provisions of these Terms and Conditions.
(h) Conflicts; Amendment. The provisions of the Plan are incorporated in these Terms and
Conditions in their entirety. In the event of any conflict between the provisions of these Terms
and Conditions and the Plan, the provisions of the Plan shall control. The Agreement may be
amended at any time by written agreement of the parties hereto.
(i) No Right to Continued Employment. Nothing in the Notice or these Terms and Conditions
shall confer upon the Participant any right to continue in the employ or service of the Company or
affect the right of the Company to terminate the Participants employment or service at any time.
(j) Further Assurances. The Participant agrees, upon demand of the Company or the
Committee, to do all acts and execute, deliver and perform all additional documents, instruments
and agreements which may be reasonably required by the Company or the Committee, as the case may
be, to implement the provisions and purposes of the Notice and these Terms and Conditions and the
Plan.
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