| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
On February 27, 2019, Universal Insurance Holdings, Inc. (the “Company”) entered into aone-year employment agreement with Sean P. Downes, the Company’s President and Chief Executive Officer (the “Agreement”), which is effective as of January 1, 2019. Mr. Downes and the Company are parties to an employment agreement dated as of January 12, 2016, which expired on December 31, 2018. The following summary of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference thereto.
Term
Mr. Downes’s Agreement provides that he will continue to serve as President and Chief Executive Officer of the Company for aone-year term beginning on January 1, 2019 and ending on December 31, 2019, unless earlier terminated in accordance with its terms (the “Term”).
Base Salary
Mr. Downes will receive a base salary of $1 million, which will not be increased or decreased during the Term.
Annual Bonus
Mr. Downes is eligible to receive an annual cash bonus upon the Company’s achievement of certain financial and operational objectives determined by the Compensation Committee of the Board of Directors (the “Compensation Committee”).
Performance Share Units
Mr. Downes is eligible to receive a grant of 50,000 performance share units (the “PSU Grant”) payable under and subject to the Company’s 2009 Omnibus Incentive Plan, as may be amended from time to time (the “Omnibus Plan”). The PSU Grant will be subject to time-vesting and performance-vesting conditions set forth in the Agreement.
Restricted Share Units
Mr. Downes is eligible to receive a grant of 25,000 restricted share units (the “RSU Grant”) payable under and subject to the Omnibus Plan. The RSU Grant will be subject to time-vesting conditions set forth in the Agreement.
Options
Mr. Downes is eligible to receive a grant of options to purchase the Company’s common stock with a grant date value of $1 million (the “Option Grant”). The Option Grant will be made pursuant to the Omnibus Plan and will be subject to the terms of the Omnibus Plan and any applicable award agreement evidencing the Option Grant. The Option Grant will be subject to time-vesting conditions set forth in the Agreement
Termination
If Mr. Downes is terminated without cause or resigns for good reason (as such terms are defined in the Agreement), he would be entitled to alump-sum cash amount equal to 12 months’ base salary and 12 months of COBRA coverage, subject to his execution of a general release of claims in favor of the Company. He would also be entitled to receive a pro rata portion of his annual incentive award for the year of termination, calculated on the basis of the Company’s actual performance for such year. Any stock options that would have vested had he been continuously employed through the end of theone-year period following the termination date will fully vest as of the termination date and shall remain exercisable for one year. In addition, any PSUs or RSUs that would have vested had he been continuously employed through the end of theone-year period following the termination date will fully vest as of the termination date and become payable within 30 days following their originally scheduled vesting dates, with the PSUs being paid based on actual performance for the full performance period, determined after the end of the performance period.
