EMPLOYMENT AGREEMENT
This employment agreement ("Agreement") dated as of the 1st day of January,
2005, between Universal Insurance Holdings, Inc., a corporation organized and
existing under and by virtue of the laws of the State of Delaware, having its
principal place of business at 0000 X.X. 000xx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx
00000 (the "Company"), and Xxxx Xxxxxx, who resides at 00000 Xxxxxxxx Xxxxx,
Xxxx Xxxxx, Xxxxxxx 00000 ("Employee").
W I T N E S S E T H:
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WHEREAS, the Company is engaged in the insurance and financial services
industry; and
WHEREAS, the Company is desirous of continuing to employ Employee to assist in
the development and management of the activities of the Company, and the
Employee is desirous of continuing in such capacity; and
WHEREAS, the Company and Employee desire to enter into this Agreement so that
the rights, duties, benefits and obligations of each in respect of the
employment of Employee for and by the Company will be fully set forth under the
terms and conditions stated herein upon the execution hereof; and
WHEREAS, the Board of Directors of the Company have approved the employment of
Employee upon the terms and conditions set forth herein by a resolution issued
by it, and have authorized the execution and delivery of this Agreement.
NOW, therefore, in consideration of the mutual promises contained
herein, including the continuation of the Employee's employment, and for other
good and valuable consideration, the Company and Employee agree as follows:
1. EMPLOYMENT
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The Company hereby employs Employee in a senior management position,
specifically as "Senior Vice President" and as the Company's "Chief Operating
Officer." Employee hereby accepts such employment and agrees to perform the
services and duties specified herein. The Company reserves its rights throughout
the term of this Agreement to change the officership and title held by the
Employee, which change if it occurs will be at the sole discretion of the
Company.
2. TERM
----
Subject to the terms and conditions herein, the term of the employment of
Employee under this Agreement ("Term") is effective as of January 1, 2005 (the
"Effective Date") and shall terminate on December 31, 2008, unless extended in
accordance with this section or by written instrument executed by the Company
after review and approval of such extension by the Board of Directors of the
Company ("Expiration Date"), so that at the Expiration Date of this Agreement
there shall be no automatic extension of the Term of this Agreement, or of the
Agreement itself.
3. DISABILITY
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If, during the Term, Employee shall become unable to perform his duties as
provided for herein by reason of illness or injury, for a consecutive period of
ninety (90) days, then the Company after that Ninety (90) day period may, on
thirty (30) days written notice to Employee, terminate the officership held by
Employee. In the event of such termination, Employee shall remain an employee of
the Company and receive fifty (50%) percent of his compensation and all of his
fringe benefits as set forth below in Articles 6 and 8, respectively, for a
period ending on the next December 31st or two hundred seventy (270) day,
whichever is longer.
4. TERMINATION FOR CAUSE
---------------------
This Agreement may be immediately terminated by the Company for "cause" at any
time, upon written notice to Employee, after which all obligations of the
Company to Employee shall thereupon cease. And any accrued but not paid benefits
hereunder shall then no longer be an obligation of the Company. For the purposes
of this Agreement, the term "cause" when used with reference to the termination
of this Agreement, shall mean only any or all of the following:
(a) Employee's absence from his employment for any reason other than sickness or
injury, at substantially all times during a period of ninety (90) consecutive
days;
(b) Failure on the part of Employee to (i) follow material instructions or
policy of the Board of Directors given or adopted in good faith, or (ii) carry
out an agreed policy or course of action as determined by (a) the Board of
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Directors or (b) a committee of the Board of Directors, or (c) carry out the
directions of the Chief Executive Officer, any or all of which is or may be to
the detriment of the Company; or
(c) Willful misconduct or gross negligence of Employee in connection with the
performance of his duties.
(d) Employee has committed an indictable offense in any jurisdiction in the
United States, either State or Federal, or has plead guilty to a misdemeanor or
been found guilty of a misdemeanor charge in any jurisdiction either State or
Federal.
5. DUTIES
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(a) Employee shall perform the following duties in connection with his
employment, all of which shall be subject to the paramount directions of the
Board of Directors:
(i) To serve as "Senior Vice President" and to be the "Chief Operating Officer"
of the Company; and
(ii) To assist the Company in its business affairs, as well as in the Company's
dealings with other companies, its regulatory affairs, banking and other
financial institutions and other groups and institutions; and
(iii) To undertake such specific assignments, consistent with his office and
position, as may be given to him from time to time by the Board of Directors or
the Chief Executive Officer; and
(iv) To continue to serve as a director of the Company, and then as, if and when
re-elected, to continue to serve as a director of the Company, and also if so
elected, to serve as a director of any subsidiary or affiliate of the Company.
(b) Employee shall devote his best efforts and skills to the affairs of the
Company, and to the performance of the duties set forth in this Article 5 on a
full-time basis. Employee shall not participate in any "outside business"
activity that will either (i) interfere with, or (ii) be a conflict of interest
with the performance of Employee's duties, activities and employment pursuant to
this Agreement. The foregoing notwithstanding, Employee has disclosed to the
Company his other outside business interests ("Outside Business Interests")
which are listed on Schedule "1" hereto and the Company with this full knowledge
has consented to Employee's continuance thereof. Moreover, the Company agrees to
permit Employee to involve himself in other similar Outside Business Interests,
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on condition that they similarly be disclosed and are added to Schedule "1"
prior to their being commenced. The failure to disclose and list any Outside
Business activity on Schedule "1" shall be prima facie a breach of this
provision. Employee may also invest his assets and manage, protect and support
the profitability of such assets, as well as devote such reasonable time as is
required by such Outside Business Interests, subject to the limitations set
forth in this Section 5(b).
6. COMPENSATION
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(a) BASE SALARY
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Employee shall receive from the Company, or in the aggregate from any of its
subsidiaries, for the discharge of Employee's duties and activities on behalf of
the Company as provided for herein, an annual salary ("Base Salary") of Three
Hundred Fifty Thousand Dollars ($350,000.00), which shall be paid by the Company
to Employee in equal and regular installments not less frequently than monthly,
in accordance with the Company's policy for payment of Employee salaries and
which shall be increased by twenty (20%) percent each year beginning with the
first anniversary of the Effective Date.
(b) ANNUAL BONUS
------------
Employee shall receive an annual bonus of three (3%) percent of the pre-tax
profits of the company as determined as at the year end of each year of the Term
of this Agreement.
7. OPTIONS AND WARRANTS
--------------------
From time to time, the Company may grant to Employee options or warrants to
purchase the Company's common stock. The Company shall enter into an option or
warrant agreement for the issuance of such options or warrants in such event.
8. FRINGE BENEFITS
---------------
In addition to the base compensation set forth in Articles 6 and 7 above,
Employee shall be entitled to receive the following benefits:
(a) Any benefits under group hospitalization, health, dental care or sick leave
plan, life or other insurance or death benefit plan, travel or accident
insurance, or contingent compensation plan, or any other present or future plan,
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including any qualified retirement plan, for which any Employees are or shall
become eligible. If Employee is not eligible for health benefits as described
above, by reason of age, location or otherwise, then Employee shall be provided
equivalent benefits determined at the election of the Company. Employee shall be
eligible to receive the foregoing benefits during the six (6) months period
following the termination of his employment under this Agreement, except if this
Agreement is terminated for cause, and after that six (6) months period, the
employee shall be entitled to COBRA benefits; and
(b) An annual vacation of up to thirty (30) days, whether taken individually or
consecutively ("Vacation Period"), at such time or times as shall be approved by
the Company, and which approval shall not be unreasonably withheld. Full
compensation shall be paid during any Vacation Period. Any portion of any
Vacation Period not used within any year shall be accrued and will accumulate,
and may be used by Employee at any time during his employment in accordance with
the provisions of this Article 8. Employee at any time during the Term of this
agreement or its renewal, may elect to convert to annual Base Salary
("Conversion") all or any portion of any accrued Vacation Period days(s),
whether it accrued under the Term of this Agreement, or any renewal hereof. In
the event Employee elects to effect a conversion, then the Conversion shall be
pro rata based upon the number of days of Vacation Period as that bears to the
then prevailing annual Base Salary, regardless of when the unused Vacation
Period day(s) accrued. If Employee has not used all of his accrued and
accumulated vacation time at the termination of his employment, then Employee
may then elect to have his accrued and accumulated Vacation Period time
converted to annual Base Salary, pro rata at the then prevailing Base Salary,
regardless of when the unused vacation time accrued; and
(c) Employee may incur and shall be reimbursed for reasonable expenses that are
related to the Company's business, including expenses for entertainment, travel
and similar items ("Approved Reimbursable Expenses"). All such reimbursement of
Approved Reimbursable Expenses shall be made within thirty (30) days of receipt
by the Company from Employee of an itemized account and if necessary proper
substantiation of Approved Reimbursable Expenses. In order to facilitate the
payment of the Approved Reimbursable Expenses, the Company may at its option
furnish Employee with Company acquired credit cards as may be available to all
other Employee officers of the Company; and
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(d) Employee shall be given a private office with secretarial help and any and
all reasonable facilities and services so as to be suitable with his position as
Senior Vice President and Chief Operating Officer, and so as to assist in the
performance of his duties and activities; and
(e) Employee shall be given an automobile allowance or automobile lease plan to
the extent of six thousand ($6,000.00) per annum, paid in twelve (12) equal
monthly installments, to be used to defray acquisition expense for an
automobile, as well as insurance and maintenance expenses for the automobile.
9. CHANGE IN CONTROL
-----------------
Notwithstanding any other provision to the contrary, the following provisions
will govern in the event of a change in control as defined herein.
(a) A change in control shall be deemed to have occurred if, at any time,
substantially all the assets of the Company shall have been sold or transferred
by sale, merger or otherwise, or if any "person" (as such term is used in
Sections 13(d) or 14(d) of the Exchange Act) becomes the beneficial owner,
directly or indirectly, of securities of the company representing fifty percent
(50%) or more of the combined voting power of the then-existing outstanding
securities of the Company.
(b) If a change in control occurs as defined in subsection 9(a) above, then the
Company shall pay to Employee an amount equal to (i) one times the salary then
in effect at the time of the Change of Control and (ii) an amount equal to one
times any bonuses paid in respect of the preceding fiscal year.
(c) If a change in control occurs as defined in subsection 9(a) above, then all
options or warrants granted to Employee shall immediately vest and become
exercisable. Such acceleration of the vesting of options or warrants shall be in
addition to, and shall have no affect on, any payments accrued pursuant to
subsection 9(b).
10. DISCLOSURE OF INFORMATION AND NON-COMPETITION
---------------------------------------------
(a) Employee recognizes and acknowledges that during the course of his
employment he will have access to certain confidential information of the
Company and that such information constitutes valuable, special and unique
property of the Company. During the Term of this Agreement and following
termination of his employment hereunder and for a term of two (2) years,
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Employee will not disclose information, including any trade secrets or
confidential information of the Company obtained during the course of his
employment with the Company, except such information as may have become part of
the public domain through no fault of Employee, which public domain
determination shall only be made by the Company in a written acknowledgment made
at the request of Employee, before Employee may be free to disclose any such
claimed public domain information.
(b) During the Term of this Agreement, and for two (2) years thereafter,
Employee will not, directly or indirectly, engage in any business enterprise or
activity competitive with the business of the Company either as an employee,
consultant, partner, shareholder, or in any other capacity. For the purposes of
this covenant not to compete, a competing business enterprise will be deemed
competitive only if such business enterprise conducts activities in the
development of investments and financial services similar to the activities of
the Company. Further, Employee agrees that he will not either during or within
two (2) years subsequent to the termination of his employment, disturb, entice,
hire or in any other manner attempt to persuade any employee, dealer, supplier
or customer of the Company to discontinue its business relationship with the
Company.
(c) The Employee and the Company acknowledge that it would be very difficult or
impossible to measure the damages resulting from a breach of this Article 10,
and that any such breach would cause immediate and irreparable harm. Therefore,
in consequence of the foregoing, Employee hereby agrees that any breach or
threatened breach by him of any provision of this Article 10 shall entitle the
Company, in addition to any other legal remedies available to it, to obtain from
any Court of competent jurisdiction a temporary and permanent injunction in
order to enjoin such breach or threatened breach, without the necessity on the
part of the Company, in any application for such injunctive relief (a) to show
immediate and irreparable harm, (B) likelihood of success on the merits, and (c)
to post any bond or undertaking, all of which would be a requirement of such an
application absent this covenant waiving those requirements. Employee also
covenants that the service of any papers to commence any legal proceedings,
including proceedings to obtain injunctive relief, may be done by utilizing
Federal Express in lieu of any other form of personal delivery of the process or
orders of the Court and upon doing so the service and notice provisions for the
commencement of legal proceedings shall be satisfied.
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(d) Notwithstanding any other provision to the contrary, in the event of a
change in control as defined in subsection 9(a) above, this Article 10 will not
apply.
11. DEATH DURING EMPLOYMENT
-----------------------
If Employee dies during the Term of his employment, then the Company shall pay
to his estate compensation which would otherwise be payable to Employee for the
shorter of (i) one (1) year from the date of his death, or (ii) the period
ending on the Expiration Date of this Agreement. Said sums shall be paid in
accordance with written directions given by Employee to the Company, or lacking
any such directions then to the surviving spouse of Employee, or if there is no
surviving spouse, then to his surviving children in equal shares, or if there
are none, then to his estate.
12. PATENTS, COPYRIGHTS AND PROPRIETARY RIGHTS
------------------------------------------
During the Term of his employment, all work product emanating directly and/or
indirectly from Employee's duties and activities effected on behalf of the
Company ("Work Product") shall be exclusively owned by the Company. If any such
Work Product is the subject of an application for patent, copyright, trade xxxx
or similar proprietary protection ("Application"), then regardless of the name
of the person or entity submitting the Application, Employee hereby acknowledges
the Company's exclusive rights in and to the Application for proprietary
protection. If the Application results in the issuance of the requested
proprietary protection, e.g., a patent or copyright, then Employee hereby
acknowledges the Company's exclusive ownership therein, and Employee will
execute any documents necessary to give effect and implement this ownership,
including but not limited to an assignment of the Application and/or the issued
proprietary protection.
13. NOTICES
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Any notice required or permitted to be given under this Agreement shall be
sufficient if in writing and actually delivered, or if sent either by Federal
Express, or postage prepaid, by certified mail, return receipt requested, with a
copy by ordinary mail, to the addresses below:
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As to Company: Universal Heights, Inc.
0000 X.X. 000xx Xxxxxx, Xxxxx 000X
Xxxxx, Xxxxxxx 00000
As to Employee: Xxxx Xxxxxx
00000 Xxxxxxxx Xxxxx,
Xxxx Xxxxx, Xxxxxxx 00000
or to such other address as either party shall designate by written notice to
the other.
14. ASSIGNMENT
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The rights and obligations of the Company under this Agreement shall inure to
the benefit of and shall be binding upon the successors and assigns of the
Company. Employee acknowledges that the services to be rendered by him are
unique and personal, and accordingly, he may not assign any of his rights,
duties, obligations or benefits under this Agreement.
15. ENTIRE AGREEMENT
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This Agreement contains the entire agreement and understanding of the Company
and Employee with respect to the subject matter hereof, and shall incorporate,
merge and supersede all prior agreements and understandings between the Company
and Employee, either oral or written, if any. No modification, change or
amendment to this Agreement, shall be binding upon the Company or Employee
unless the same is in writing, and signed by the party against whom enforcement
of the modification, change or amendment is sought to be enforced.
16. MISCELLANEOUS
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(a) This Agreement and the implementation of it shall be subject to and governed
by the laws of the State of Florida, and any legal proceedings relating to (i)
the interpretation or enforcement of any of the provisions of this Agreement, or
(ii) any dispute relating to the employment relationship created by the
Agreement, shall only be brought in the Circuit Court of the State of Florida,
in and for the County of Dade.
(b) The Article headings contained herein are for reference purposes only and
shall not in any way affect the meaning or the interpretation of this Agreement.
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(c) The failure of any provision of this Agreement shall in no manner affect the
right to enforce the remainder of this Agreement, and the waiver by either the
Company or Employee of any breach of any provision of this Agreement shall not
be construed to be a waiver by the Company or Employee of any succeeding breach
of such provision or a waiver by such party of any breach of any other provision
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
EMPLOYEE:
WITNESS:
/s/ Xxxxx Xxxxx /s/ Xxxx X. Xxxxxx
-------------------------- -------------------------------
Xxxxx Xxxxx XXXX XXXXXX
UNIVERSAL INSURANCE HOLDINGS, INC.
WITNESS:
/s/ Xxxxx Xxxxx /s/ Xxxxxxx X. Xxxxx
------------------------------- --------------------------
Xxxxx Xxxxx BY: XXXXXXX X. XXXXX
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SCHEDULE 1
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OUTSIDE BUSINESS INTERESTS
As of execution date:
UNIVERSAL INSURANCE HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Xxxxxxx X. Xxxxx
Employee
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx Xxxxxx
Dated: July , 2005
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