UNIVERSAL INSURANCE HOLDINGS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT ("Agreement") dated July 12, 2007, by and between Universal
Insurance Holdings, Inc., a Delaware corporation ("Corporation"), and Xxxxxxx X.
Xxxxx, an employee of the Corporation ("Optionee").
WHEREAS, the Corporation desires to compensate, motivate and retain
Optionee and to provide Optionee an opportunity to share in the success of the
Corporation by granting a stock option; and
WHEREAS, the option granted hereby is not intended to qualify as an
"incentive stock option" within the meaning of Section 422 or any successor
provision of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the mutual covenants and
representations herein contained and intending to be legally bound, the parties
hereto agree as follows:
1. NUMBER OF SHARES AND PRICE. The Corporation hereby grants to
Optionee an option ("Option") to purchase the number of shares of common stock
of the Corporation ("Common Stock") set forth on the attached Face Sheet of this
Agreement. The exercise price per share of Common Stock of the Option shall be
as is set forth on the attached Face Sheet of this Agreement.
2. TERM AND EXERCISE. The Option shall expire five (5) years from the
date hereof, subject to earlier termination as set forth in Section 3. Subject
to the provisions of Section 3, the Option shall become exercisable as set forth
on the attached Face Sheet of this Agreement.
3. EXERCISE OF OPTION UPON TERMINATION OF EMPLOYMENT.
(a) TERMINATION. Upon Optionee's termination of employment for
any reason, other than by reason of death, the right of the Optionee to exercise
the Option shall terminate.
(b) DEATH. In the event of the death of Optionee while employed
by the Corporation, the right of any individual, trust or estate to, by will or
the laws of descent and distribution, succeed to the rights and obligations of
Optionee under this Agreement ("Beneficiary") to exercise the Option in full
(only to the extent not previously exercised) shall expire upon the expiration
of six (6) months from the date of Optionee's death or, if earlier, on the date
of expiration of the Option determined pursuant to Section 2.
4. EXERCISE PROCEDURES.
(a) NOTICE OF EXERCISE. The Option shall be exercisable by written
notice to the Corporation, which must be received by the Corporation not later
than 5:00 P.M. local time at the principal executive office of the Corporation
on the expiration date of the Option. Such written notice shall set forth (i)
the number of shares of Common Stock being purchased, (ii) the total exercise
price for the shares of Common Stock being purchased, (iii) the exact name as it
should appear on the stock certificate(s) to be issued for the shares of Common
Stock being purchased, and (iv) the address to which the stock certificate(s)
should be sent.
(b) PAYMENT OF EXERCISE PRICE. Payment of the exercise price may
be made, at Optionee's election, (i) in cash or by certified or official bank
check, (ii) by delivery to the Company of a number of shares of Common Stock
having a Fair Market Value (as defined below) as of the date of exercise equal
to the exercise price, or (iii) by net issue exercise, pursuant to which the
Company will issue to you a number of shares of Common Stock as to which the
Option is exercised, less a number of shares with a Fair Market Value as of the
date of exercise equal to the exercise price.
(c) FAIR MARKET VALUE. As is used herein, the "Fair Market Value"
of a share of Common Stock on any day means: (i) if the principal market for the
Common Stock is The American Stock Exchange, The New York Stock Exchange, or any
other national securities exchange, the closing sales price of the Common Stock
on such day as reported by such exchange or market, or on a consolidated tape
reflecting transactions on such exchange or market, or (ii) if the principal
market for the Common Stock is not a national securities exchange and the Common
Stock is quoted on an automated quotations system, the mean between the closing
bid and the closing asked prices for the Common Stock on such day as quoted on
such system, or (iii) if the Common Stock is not quoted on an automated
quotations system, the mean between the highest bid and lowest asked prices for
the Common Stock on such day as reported by the National Quotation Bureau, Inc.;
provided, that if none of (i), (ii) or (iii) above is applicable, or if no
trades have been made or no quotes are available for such day, the Fair Market
Value of the Common Stock shall be determined, in good faith, by the Board of
Directors of the Corporation.
5. AGREEMENT PROVISIONS CONTROL OPTION TERMS; MODIFICATIONS. The
Option is granted pursuant and subject to the terms and conditions of this
Agreement. The Option shall not be modified after the date of grant except by
express written agreement between the Corporation and Optionee; PROVIDED,
HOWEVER, that any such modification shall be approved by the Board of Directors.
6. LIMITATIONS ON TRANSFER. The Option may not be assigned or
transferred other than by will, by the laws of descent and distribution, or
pursuant to a qualified domestic relations order as defined by the Code, Title I
of ERISA or the rules thereunder.
7. NO EXERCISE IN VIOLATION OF LAW. Notwithstanding any of the
provisions of this Agreement, Optionee hereby agrees that Optionee will not
exercise the Option granted hereby, and that the Corporation will not be
obligated to issue any shares of Common Stock to Optionee hereunder, if the
exercise thereof or the issuance of such shares of Common Stock shall constitute
a violation by Optionee or the Corporation of any provision of any law or
regulation of any governmental authority. Any determination in this regard by
the Board of Directors shall be final, binding and conclusive.
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8. SECURITIES LAW COMPLIANCE. Optionee agrees, for Optionee or any
Beneficiary, with respect to all shares of Common Stock acquired pursuant to the
terms and conditions of this Agreement and the Option (or any other shares of
Common Stock issued pursuant to a stock dividend or stock split thereon or any
securities issued in lieu thereof or in substitution or exchange therefor), that
Optionee and any Beneficiary will not sell or otherwise dispose of these shares
except pursuant to an effective registration statement under the Act, or except
in a transaction that, in the opinion of counsel for the Corporation, is exempt
from registration under the Act. Further, the Corporation shall not be required
to sell or issue any shares under the Option if, in the opinion of the
Corporation, (a) the issuance of such shares would constitute a violation by
Optionee or the Corporation of any applicable law or regulation of any
government authority, or (b) the consent or approval of any governmental body is
necessary or desirable as condition of, or in connection with, the issuance of
such shares.
9. ADJUSTMENTS. The existence of the Option shall not affect in any
way the right or power of the Corporation or its directors or shareholders to
make or authorize any or all adjustments, recapitalizations, reorganizations, or
other changes in the Corporation's capital structure or its business, or any
merger or consolidation of the Corporation, or any issuance of bonds,
debentures, preferred stock or prior preference stock ahead of or affecting the
Common Stock or the rights thereof, or dissolution or liquidation of the
Corporation, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
10. DISPUTE RESOLUTION. As a condition of granting the Option, Optionee
agrees, for Optionee and any Beneficiary, that any dispute or disagreement that
may arise under or as a result of or pursuant to this Agreement and the Option
shall be determined by the Board of Directors in its sole discretion, and any
interpretation by the Board of Directors of the terms of this Agreement and the
Option shall be final, binding and conclusive.
11. TAXES. The Corporation shall be entitled to withhold (or secure
payment from Optionee in lieu of withholding) the amount of any withholding or
other tax required by law to be withheld or paid by the Corporation with respect
to any shares of Common Stock issuable under this Agreement, and the Corporation
may defer issuance of shares of Common Stock upon the exercise of the Option
unless the Corporation is indemnified to its satisfaction against any liability
for any such tax. The amount of such withholding or tax payment shall be
determined by the Board of Directors or its delegate and shall be payable by
Optionee at such time as the Board of Directors determines. Optionee may
satisfy his tax withholding obligation by (a) having cash withheld from
Optionee's salary or other compensation payable by the Corporation or a
subsidiary, (b) the payment of cash to the Corporation, (c) the payment in
shares of Common Stock already owned by Optionee valued at the fair market value
per share of Common Stock ("Fair Market Value") on the date of such payment,
and/or (d) the withholding from the Option, at the appropriate time, of a number
of shares of Common Stock sufficient, based upon the Fair Market Value of such
shares of Common Stock, to satisfy such tax withholding requirements. The Board
of Directors shall be authorized, in its sole and absolute discretion, to
establish such rules and procedures relating to any such withholding methods as
it deems necessary or appropriate, including, without limitation, rules and
procedures relating to elections to have shares of Common Stock withheld upon
exercise of the Option to meet such withholding obligations.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ATTEST: UNIVERSAL INSURANCE HOLDINGS, INC.
/s/ Xxxxx Xxxxx
--------------------- By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Xxxx X. Xxxxxx, Chief Operating Officer
WITNESS: OPTIONEE
/s/ Xxxxx Xxxxx /s/ Xxxxxxx X. Xxxxx
-------------------- ----------------------------------------------
Xxxxxxx X. Xxxxx, President
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FACE SHEET
Notice Addresses:
Optionee: Xxxxxxx X. Xxxxx
-------------------------
-------------------------
Corporation: Universal Insurance Holdings, Inc.
0000 X. Xxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Grant Date: July 12, 2007
Total Options Granted: 700,000
Exercise Price per share of Common Stock: $ 6.50
Limitation on Exercise: This option shall only be exercisable on such date or
dates as the Fair Market Value, as defined herein, of
the Common Stock is and has been at least one-hundred
and fifty percent (150%) of the exercise price for the
previous twenty (20) consecutive trading days.
Vesting: All 700,000 options vest on July 12, 2008; provided,
however, that if at any time prior to July 12, 2008 a
"change in control" (as defined in the employment
agreement between the Corporation and Optionee) occurs,
then such options shall vest immediately prior to the
consummation of such change in control.
Expiration Date: Optioned shares must be purchased within five (5) years
from the date of grant, which is July 12, 2007. That
is, all options must be exercised by July 12, 2012.
