UNIVERSAL INSURANCE HOLDINGS, INC. STOCK OPTION AGREEMENT FOR DIRECTORS
Exhibit 10.9
AGREEMENT (“Agreement”) dated this 21st day of December, 2001 by
and between Universal Insurance Holdings, Inc., a Delaware corporation (“Corporation”),
and Xxxxxxx X. Xxxxx, a director of the Corporation (“Optionee”).
WHEREAS, the Corporation desires to have Optionee continue to serve on its Board of
Directors or the Board of Directors of one or more of its wholly-owned subsidiaries and
to provide Optionee with an incentive by sharing in the success of the Corporation;
WHEREAS, the Corporation desires to grant stock options to Optionee;
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 the
Optionee an option (“Option”) to purchase the number of shares of Common Stock set forth
on the last page
of this Agreement. The exercise price per share of Common Stock of the Option shall be as is set
forth on the last page of this Agreement, such price being the Fair Market Value per
share of Common Stock on the date of grant of the Option. The Option is not intended to
be an Incentive Stock Option and shall be deemed a Non-Qualified Stock Option.
2. Term and Exercise. The Option shall expire on the date set forth on the
last page of this Agreement, subject to earlier termination as set forth in Section 3.
Subject to the provisions of Section 3, the Option shall become exercisable in
installments as set forth on the last page of this Agreement.
3. Exercise of Option Upon Termination of Service.
(a) Termination of Vested Option Upon Termination of Service as a
Board Member.
(i) In General. Upon the Optionee’s termination of service as a
Board member other than by reason of death or permanent disability, the Optionee
may, within 30 days from the date of such termination of service, exercise all or
any part of the Option as was exercisable on the date of termination of service
if such termination of service is not for cause. If such termination of service
is for cause, the right of the Optionee to exercise the Option shall terminate on
the date of termination of service. In no event, however, may the Option be
exercised later than the date determined pursuant to Section 2.
(ii) Disability. Upon the Optionee’s permanent disability, the Optionee may,
within 90 days, exercise all or a part of the Option, whether or not the Option
was then exercisable, but only to the extent not previously exercised. In no
event, however, may the Option be exercised later than the date determined
pursuant to Section 2.
(iii) Death. In the event of the death of the Optionee while serving
as a Board member, the right of the Optionee’s designated beneficiary to exercise
the Option in full (whether or not all or any part of the Option was exercisable
as of the date of death of the Optionee, but only to the extent not previously
exercised) shall expire upon the expiration of 90 days from the date of the
Optionee’s death or on the date of expiration of the Option determined pursuant
to Section 2, whichever is earlier.
(b) Termination of Unvested Option Upon Termination of Service. Except as
specified in Section 3(a), to the extent all or any part of the Option was not
exercisable as of the date of termination of service, the unexercisable portion of the
Option shall expire at the date of such termination.
4. Exercise Procedures. The Option shall be exercisable by written notice
to the Corporation, which must be received by the Secretary of 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 (a) the number of
shares of Common Stock being purchased, (b) the total exercise price for the shares of
Common Stock being purchased, (c) the exact name as it should appear on the stock
certificate(s) to be issued for the shares of Common
Stock being purchased, and (d) the address to which the stock certificate(s) should be
sent. The exercise price of shares of Common Stock purchased upon exercise of the Option
shall be paid in full (a) in cash, (b) by delivery to the Corporation of already owned
shares of Common Stock that have been held by the Optionee for at least six months, (c)
in any combination of cash and already owned shares of Common Stock that have been held
by the Optionee for at least six months, or (d) by delivery of such other consideration
as the Committee deems appropriate and in compliance with applicable law (including
payment in accordance with a cashless exercise program approved by the Committee). If
any shares of Common Stock shall be transferred to the Corporation to satisfy all or any
part of the exercise price, the part of the exercise price deemed to have been satisfied
by such transfer of shares of Common Stock shall be equal to the product derived by
multiplying the Fair Market Value as of the date of exercise times the number of shares
of Common Stock transferred to the Corporation. The Optionee may not transfer to the
Corporation in satisfaction of the exercise price any fraction of a share of Common
Stock, and any portion of the exercise price that would represent less than a full share
of Common Stock must be paid in cash by the Optionee. Subject to Sections 6, 7 and 8
hereof, certificates for the purchased shares of Common Stock will be issued and
delivered to the Optionee as soon as practicable after the receipt of such payment of
the exercise price; provided, however, that delivery of any such shares
of Common Stock shall be deemed effected for all purposes when a stock transfer agent of
the Corporation shall have deposited such certificates in the United States
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mail, addressed to Optionee, at the address set forth on the last page of this Agreement or to
such other address as Optionee may from time to time designate in a written notice to the
Corporation. The Optionee shall not be deemed for any purpose to be a shareholder of the
Corporation in respect of any shares of Common Stock as to which the Option shall not have been
exercised, as herein provided, until such shares of Common Stock have been issued to Optionee by
the Corporation hereunder.
5. 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 domestic relations order. The
Optionee’s beneficiary may exercise the Optionee’s rights hereunder only to the extent they were
exercisable under this Agreement at the date of the death of the Optionee and are otherwise
currently exercisable.
6. Taxes. The Corporation shall be entitled, if the Corporation deems it necessary or
desirable, to withhold (or secure payment from the 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 the Option. The Corporation may defer issuance of Common Stock under the Option unless
indemnified to its satisfaction against any liability for any such tax. The amount of such
withholding or tax payment shall be determined by the Corporation and shall be payable by the
Optionee at such time as the Corporation determines. The Optionee shall be permitted to satisfy
his or her tax or withholding obligation by (a) having cash withheld from the Optionee’s salary or
other compensation payable by the Corporation or a Subsidiary, (b) the payment of cash by the
Optionee to the Corporation, (c) the payment in shares of Common Stock already owned by the
Optionee valued at Fair Market Value, 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 Common Stock, to satisfy such tax or withholding requirements.
7. No Exercise in Violation of Law. Notwithstanding any of the provisions of this
Agreement, the Optionee hereby agrees that he or she will not exercise the Option granted hereby,
and that the Corporation will not be obligated to issue any shares of Common Stock to the Optionee
hereunder, if the exercise thereof or the issuance of such shares of Common Stock shall constitute
a violation by the Optionee or the Corporation of any provision of any law or regulation of any
governmental authority. Any determination in this connection by the Committee shall be final,
binding and conclusive.
8. Securities Law Compliance. The Optionee acknowledges that the shares of Common Stock
issuable on exercise of the Option have not been registered under the Securities Act of 1993, as
amended (“Act”). The Optionee represents and acknowledges that such shares of Common Stock, when
purchased, shall be held for investment and not with a view to the sale or distribution of any
part thereof, and that the Optionee may be required to bear the economic risk of his or her
investment for an indefinite period of time. The Optionee further represents and warrants that the
Optionee and his or her Beneficiaries will not sell or otherwise dispose of these shares of Common
Stock except pursuant to an effective registration statement under the Act or
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in a transaction that, in the opinion of counsel for the Corporation, is exempt from registration
under the Act.
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, the Optionee agrees,
for the Optionee and his or her beneficiaries, that any dispute or disagreement that may arise
under or as a result of or pursuant to the Option shall be determined by the Board of Directors of
the Corporation in its sole and absolute discretion, and any such interpretation of the terms of
the Option shall be final, binding and conclusive.
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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/ Xxxxxxx X. Xxxxx | ||
| |
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| Xxxxxxx X. Xxxxx, President | ||||
| WITNESS: | OPTIONEE | |||
/s/ Xxxxx Xxxxx
|
By: | /s/ Xxxxxxx X. Xxxxx | ||
| Xxxxxxx X. Xxxxx | ||||
Number of shares of Common Stock subject to the Option: |
150,000 shares of Common Stock |
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Exercise Price per share of Common Stock: |
$.60 |
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| Expiration Date of the Option | December 21, 2011 | |||
Installment Exercise Schedule, if Any |
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Vesting
Schedule |
Cumulative Number of
Shares of Common Stock in Respect of which Option is Exercisable |
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Immediate-Upon
Grant |
150,000 | |||
Notice Addresses: |
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| If to the Corporation: | If to the Optionee: | |||
| Universal Insurance Holdings, Inc. 0000 X.X. 000 Xxxxxx Xxxxx, Xxxxxxx 00000 Attention: Xxxxxxx X. Xxxxx |
Xxxxxxx X. Xxxxx 0000 Xxxxxx Xxxx. #000 Xxxxxxxx, XX 00000 |
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