Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”), dated as of February 27, 2019, is
between Universal Insurance Holdings, Inc., a Delaware corporation
(the “Company”), and Sean P. Downes (the “Executive”).

WHEREAS, the Company and Executive are parties to an Employment Agreement, dated
as of January 12, 2016 (the “Prior Agreement”), pursuant to which Executive was
employed as President and Chief Executive Officer of the Company;

WHEREAS, the Prior Agreement expired on December 31, 2018; and

WHEREAS, Executive and the Company now desire to enter into this Agreement in
connection with Executive’s continuing employment for the Term (as defined
below) as the President and Chief Executive Officer of the Company;

NOW, THEREFORE, in consideration of the covenants and promises contained herein
and for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

1. Employment and Acceptance. During the Term, the Company agrees to employ
Executive, and Executive agrees to continue his employment with the Company,
subject to the provisions of this Agreement. As of the Effective Date (as
defined below), this Agreement supersedes and replaces in all respects the Prior
Agreement.

2. Term.

(a) Duration. The period of Executive’s employment with the Company under this
Agreement commenced on January 1, 2019 (the “Effective Date”) and will continue
until the earlier of: (i) December 31, 2019 and (ii) the termination of such
employment in accordance with Section 5 (the “Term”). Except as provided in
Section 6(a), the Term will not be subject to any automatic renewal or extension
unless this Agreement is amended by the parties after the Effective Date to so
provide.

(b) Expiration of Employment Term. If Executive’s employment with the Company
continues following the expiration of the Term, Executive shall be an
employee-at-will whose employment may be terminated by the Company for any
reason or for no stated reason at any time, subject only to the severance
protections contemplated by Section 5 for the one-year period following the
expiration of the Term.

3. Duties and Title.

(a) Title and Reporting. During the Term, the Company will employ Executive as
the President and Chief Executive Officer of the Company, reporting directly and
exclusively to the Board of Directors of the Company (the “Board”) or one or
more committees of the Board. Executive shall, at all times during the Term, be
the senior-most executive officer of the Company. During the Term, Executive
shall, subject to his election by the Company’s stockholders, serve for no
additional consideration as a member of the Board.

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(b) Duties. Executive shall render on a full-time basis all of his business time
and attention to the business of the Company and its subsidiaries (collectively,
the “Company Group”). Executive will have such authority and responsibilities
and will perform such duties assigned to the President and Chief Executive
Officer by the by-laws of the Company and as may be assigned to him from time to
time by the Board, commensurate with his position as the senior-most executive
officer of the Company. If requested by the Board, Executive will also serve as
an officer or director of another member of the Company Group for no additional
consideration. During the Term, Executive’s principal place of employment will
be the Company’s headquarters in Florida, except that Executive acknowledges and
agrees that he will be required to travel for business purposes.

(c) Other Business and Other Activities. Executive may not engage in any
activity that conflicts with the interests of any member of the Company Group or
that would interfere with the performance of Executive’s duties to any member of
the Company Group, as determined by the Board. During the Term, Executive may
not hold, directly or indirectly, an ownership interest of more than 2% in any
entity other than the Company. During the Term, with the prior written consent
of the Board (which consent will not be unreasonably withheld), Executive may
serve on the board of directors of one other public company. Nothing in this
Agreement shall preclude Executive from dedicating reasonable amounts of time
during the Term to charitable or civic activities or from managing his personal
finances, as long as such activities do not interfere in any material way with
his duties and responsibilities to any member of the Company Group.

4. Compensation and Benefits by the Company. As compensation for all services
rendered pursuant to this Agreement, the Company will provide Executive with the
following pay and benefits during the Term:

(a) Base Salary. The Company will pay Executive an annual base salary of
$1,000,000, payable in accordance with the Company’s customary payroll practices
(“Base Salary”). The annual rate of Executive’s Base Salary shall not be
increased or decreased during the Term.

(b) Annual Bonus. For each calendar year ending during the Term, Executive shall
be eligible to earn a cash incentive award (the “Annual Bonus”), which shall be
calculated based upon achievement of the applicable financial and operational
performance objective or objectives, as determined by the Committee. The
calculation of the Annual Bonus shall be made promptly after the completion of
the annual audit for the fiscal year ending December 31, 2019, subject to
approval by the Compensation Committee (the “Committee”); provided, however,
that in no event shall any Annual Bonus be paid to Executive later than
March 15, 2020. Except as provided in Section 5, Executive shall not be eligible
to earn or receive an Annual Bonus unless he is employed by the Company on
December 31, 2019.

(c) Participation in Executive Benefit Plans; Private Office and Secretary.
Executive is entitled, if and to the extent eligible, to participate in the
Company’s benefit plans generally available to Company employees in similar
positions. For each full month during the Term, the Company shall provide
Executive with a car allowance in the amount of $625 per month.

 

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Executive shall be given a private office with secretarial help at Executive’s
principal place of employment as specified in Section 3(b) above and any and all
reasonable facilities and services so as to be suitable with his position as
President and Chief Executive Officer, and so as to assist in the performance of
his duties and activities.

(d) PSU Grants and Vesting.

(i) Grant of PSUs. On the Effective Date, Executive shall be eligible to receive
a grant of 50,000 (the “Specified Number”) performance share units (“PSUs”). The
grant shall be made pursuant to the Universal Insurance Holdings, Inc. 2009
Omnibus Incentive Plan, as it may be amended from time to time, and any
successor plan thereto (the “Omnibus Plan”), shall be subject to the terms and
conditions of the applicable equity award agreement that evidences such award
under the Omnibus Plan, and shall be governed by the Omnibus Plan, the
applicable equity award agreement, and any other applicable award documentation,
except that, in the event of any inconsistency between the terms of the award
documentation and this Agreement, the provisions of this Agreement shall
control. The PSUs will be subject to the performance-vesting and time-vesting
requirements described in this Agreement.

(ii) Performance-Vesting Requirements. The earn out with respect to the PSUs
will be determined by reference to the attainment of the pre-established
performance objective set forth in attached Schedule A measured over the fiscal
year ending December 31, 2019 (the “Performance Period”). Depending upon the
level of attainment of the performance objective, Executive shall be eligible to
earn 100% of the Specified Number. No portion of the PSU award shall be earned
(and the entire award will be forfeited) if the performance objective is not
achieved. It is intended by the parties that no minimum earn out is guaranteed
with respect to such PSU award and that payout will be challenging but
attainable.

(iii) Time-Vesting Requirements and Payment. For purposes of the PSU award,
“Earn Out Number” means the number of PSUs earned for the Performance Period
based upon achievement of the applicable performance objective, as determined by
the Committee. Subject to Executive’s continuous employment with the Company
through the applicable vesting date, Executive shall be fully vested in 34% of
the Earn Out Number on March 1, 2020 (the “First Tranche”); in 34% of the Earn
Out Number on March 1, 2021 (the “Second Tranche”); and in the remaining 32% of
the Earn Out Number on March 1, 2022 (the “Third Tranche”). Payment with respect
to the vested portion of the Earn Out Number shall be made only through delivery
and settlement of the appropriate number of shares of the Company’s common stock
within 60 days following the applicable date of vesting; provided, however, that
payment with respect to the First Tranche shall not be made until the Committee
has determined that the applicable performance objective for the Performance
Period have been attained. Except as otherwise provided in Section 5 or 6,
Executive shall forfeit, and have no rights with respect to, any portion of the
Earn Out Number that has not vested prior to the date Executive’s employment
with the Company ends.

 

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(iv) Dividend Equivalents. With respect to the Second Tranche and Third Tranche
(but not the First Tranche) of the Earn Out Number, Executive shall be credited
with a cash amount equal to the cash dividends paid on the corresponding number
of shares of Company’s common stock during the period beginning after the
Performance Period and ending on the vesting date of the applicable tranche.
Such cash amount shall be subject to the same time-vesting conditions as the
related PSUs and shall be paid to Executive in cash at the time that the shares
of the Company’s common stock are delivered to Executive in settlement of such
tranche.

(e) RSU Grant and Vesting.

(i) Grant of RSUs. On the Effective Date, Executive shall be eligible to receive
a grant of 25,000 restricted share units (“RSUs”). The grant shall be made
pursuant to the Omnibus Plan, shall be subject to the terms and conditions of
the applicable equity award agreement that evidences such award under the
Omnibus Plan, and shall be governed by the Omnibus Plan, the applicable equity
award agreement, and any other applicable award documentation, except that, in
the event of any inconsistency between the terms of the award documentation and
this Agreement, the provisions of this Agreement shall control.

(ii) Time-Vesting Requirements. Subject to Executive’s continuous employment
with the Company through the applicable vesting date, Executive shall be fully
vested in 12,500 RSUs on the Effective Date; in 6,250 RSUs on June 1, 2019; and
in the remaining 6,250 RSUs on December 1, 2019. Except as otherwise provided in
Section 5 or 6, Executive shall forfeit, and have no rights with respect to, any
portion of the RSUs that has not vested prior to the date Executive’s employment
with the Company ends.

(iii) Dividend Equivalents. Executive shall be credited with a cash amount equal
to the ordinary cash dividends declared and paid on the corresponding number of
shares of Company’s common stock during the period beginning on the date of
grant of the RSUs and ending on the applicable vesting date. Such cash amount
shall be subject to the same time-vesting conditions as the related RSUs and
shall be paid to Executive in cash at the time that the shares of the Company’s
common stock are delivered to Executive in settlement of the RSUs.

(f) Stock Option Grant and Vesting.

(i) Grant of Options. On the Effective Date, Executive shall be eligible to
receive a grant of options to purchase shares of the Company’s common stock (the
“Options”), which grant of Options shall have a grant date value of $1 million
using the Black-Scholes pricing or other model used by the Company for financial
accounting and proxy disclosure purposes. Each Option shall be a “nonqualified
stock option” as such term is defined for purposes of Section 83 of the Code.
The exercise price of the Options will be the Fair Market Value of the common
stock of the Company at the time of grant. Each grant shall be made pursuant to
the Omnibus Plan, shall be subject to the terms and

 

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conditions of the applicable equity award agreement that evidences such award
under the Omnibus Plan, and shall be governed by the Omnibus Plan, the
applicable equity award agreement, and any other applicable award documentation,
except that, in the event of any inconsistency between the terms of the award
documentation and this Agreement, the provisions of this Agreement shall
control.

(ii) Time-Vesting Requirements. Subject to Executive’s continued employment
through the applicable vesting date (except as otherwise provided in Section 5
or 6), one-third of the grant of Options shall vest and become fully exercisable
on the first anniversary of the date of grant; one-third of the grant of Options
shall vest and become fully exercisable on the second anniversary of the date of
grant; and one-third of the grant of Options shall vest and become fully
exercisable on the third anniversary of the date of grant. Except as otherwise
provided in Section 5 or 6, Executive shall forfeit, and have no rights with
respect to, any Options that have not vested prior to the date his employment
with the Company ends.

(g) Condition to Grants of PSUs, RSUs and Options; Effect of Change in Control.
Anything in this Agreement to the contrary notwithstanding: (i) the Company
shall have no obligation to grant PSUs, RSUs or Options to Executive if
Executive’s employment with the Company ends for any reason prior to the
applicable grant date; and (ii) the Company shall have no obligation to grant
PSUs, RSUs or Options to Executive or to deliver any shares of the Company’s
common stock to Executive in settlement of any previously granted PSUs, RSUs or
Options if the stockholders of the Company have not previously approved in
accordance with applicable law an equity incentive plan of the Company with
sufficient share reserves to permit such grants and settlements. It shall not be
a breach of this Agreement if the Company does not grant the PSUs, RSUs or
Options described in Sections 4(d), 4(e) or 4(f) or fails to settle previously
granted PSUs, RSUs or Options through the delivery of shares of Common Stock, in
each case, because the Company’s stockholders have not approved an equity
incentive plan with sufficient share reserves to permit the grant and settlement
of PSUs, RSUs or Options described above. The Company shall have no obligation
to make any substitute cash or replacement grants or awards of any type to
Executive if the stockholders of the Company fail to approve an equity incentive
plan with sufficient share reserves to permit or settle the grants contemplated
by this Agreement. Moreover, nothing in this Agreement shall preclude the
Committee from making grants of equity awards during the Term or thereafter to
other officers, employees or consultants of any member of the Company Group. In
addition, nothing in this Agreement shall preclude the Committee from granting
additional awards to Executive in recognition of exceptional performance. The
Company will use reasonable efforts to maintain a registration statement in
effect on Form S-8 covering the grants and awards pursuant to this Agreement.
Subject to Section 6, (i) any substitute, amended or replacement awards granted
to Executive in connection with a Change in Control (as defined below) shall
contain vesting, payment-timing and exercisability terms that are no less
favorable to Executive than the comparable terms in the PSUs, RSUs and Options
to which they relate and (ii) the exercise price of any substitute options
granted to replace outstanding Options shall be determined in a manner that
complies with Treas. Reg. Section 1.409A-1(b)(5)(v)(D) and that preserves the
aggregate intrinsic value in the Option immediately prior to the CIC Date (as
defined below).

 

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(h) Vacation. Executive will be entitled to 40 days (8 weeks) of paid vacation
per calendar year (earned pro rata over the course of the year), subject to the
Company’s standard vacation policies. Any unused vacation for a given calendar
year shall accrue, and the aggregate value of any unused accrued vacation shall
be paid to Executive upon the termination of Executive’s employment with the
Company, provided that Executive has submitted a report to the Committee within
30 days following the end of each calendar year reporting on the number of
accrued and unused vacation days for such year and the total number of accrued
but unused vacation days for all prior years commencing after 2016.

(i) Expense Reimbursement. The Company will pay or reimburse Executive for all
appropriate business expenses Executive incurs in connection with Executive’s
duties under this Agreement, in accordance with the Company’s policies as in
effect from time to time, subject to the timely submission by Executive of
written documentation of such expenses in accordance with the applicable
policies of the Company.

5. Termination of Employment.

(a) Notice. Subject to the provisions of this Section 5, the Company may
terminate Executive’s employment, and Executive may resign his employment, for
any reason or for no stated reason, at any time during the Term. The Company
shall give Executive 90 days’ prior written notice of its intention to terminate
his employment other than for Cause (as defined below), and Executive shall give
the Company 90 days’ prior written notice of his intention to resign for any
reason. Any such notice shall specify the applicable termination or resignation
date. In the event of a termination or resignation notice, the Company will have
the right to restrict Executive’s access to its premises, clients and employees
during the notice period.

(b) Accrued Obligations. If Executive’s employment ends for any reason,
Executive (or in the event of his death, Executive’s estate) will receive,
within 30 days following the Termination Date (as defined below), a lump sum
cash payment equal to: (i) his accrued but unpaid Base Salary through the
Termination Date and any earned but unpaid Annual Bonus for any year prior to
the year in which the Termination Date occurs, and any undelivered shares of
Company common stock in respect of a tranche of PSUs or RSUs for which the
vesting and payment date has occurred on or prior to the Termination Date,
(ii) any employee benefits Executive may be entitled to pursuant to the
Company’s employee benefit plans through the Termination Date, (iii) any accrued
and unused vacation as set forth in Section 4(h) above through the Termination
Date, and (iv) any expenses reimbursable under Section 4(i) incurred but not yet
reimbursed to Executive through the Termination Date (collectively, the “Accrued
Obligations”).

(c) Termination with Cause; Resignation without Good Reason.

(i) In General; Payments. The Company has the right at any time to terminate
Executive’s employment with the Company for Cause and, subject to Section 5(a)
above, Executive has the right to resign without Good Reason (as defined below).
If the Company terminates Executive for an event of Cause described in
clause (B), (C), or (D) of Section 5(c)(ii), the Company shall provide Executive
30 days

 

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prior to the date on which it intends to terminate Executive’s employment for
Cause with a written notice from the Company identifying the reasons that are
alleged to constitute Cause and shall afford Executive a reasonable opportunity
to meet once with the Board within the 30-day notice period to discuss and
present evidence relevant to the Board’s conclusions. If the Company terminates
Executive’s employment for an event of Cause not described in the previous
sentence, such termination shall be effective immediately upon the Company’s
written notice to Executive. If the Company terminates Executive’s employment
for Cause or Executive resigns without Good Reason, the Company’s obligation to
Executive shall be limited solely to the Accrued Obligations. If Executive’s
employment is terminated for Cause, (i) no Annual Bonus shall be payable for the
calendar year in which such termination occurs, (ii) any then outstanding
unvested PSUs and RSUs shall be immediately forfeited as of the Termination Date
(as defined in Section 5(g)(i) below) and (iii) any vested and unvested Options
shall terminate as of the Termination Date. If Executive resigns his employment
without Good Reason, (i) no Annual Bonus shall be payable for the calendar year
in which such resignation occurs, (ii) any then outstanding unvested PSUs and
RSUs shall be immediately forfeited as of the Termination Date (as defined in
Section 5(g)(ii) below) and (iii) any vested and unvested Options shall
terminate 90 days following the Termination Date (or, if earlier, on the
expiration date of the term of the Options).

(ii) For purposes of this Agreement, “Cause” means, as determined by a majority
of the non-employee members of the Board and documented in a resolution of the
Board approved by such majority of non-employee members of the Board, any of the
following: (A) Executive’s abuse of alcohol or any controlled substance; (B) a
willful act of fraud, dishonesty or breach of fiduciary duty on the part of
Executive with respect to the business or affairs of the Company; (C) a knowing
and material failure by Executive to comply with applicable laws and regulations
or professional standards relating to the business of the Company;
(D) Executive’s willful and continuing failure to perform his duties to the
Company (after notice from the Board of such failure) or any material breach by
Executive of a provision of this Agreement except, in each case, where such
failure or breach is caused by the illness or other similar medical incapacity
(other than for a reason described in clause (A) of this Section 5(c)(ii)) of
Executive or any willful act or omission by Executive that results in material
harm to the Company’s financial condition, business or reputation; (E) Executive
being subject to an inquiry or investigation by a governmental authority or
self-regulatory organization such that the existence of such inquiry or
investigation will, in the judgment of the Board, result in material damage to
the Company’s business interests, licenses, reputation or prospects; or
(F) Executive’s conviction of, or plea of guilty or no contest to: (i) any
felony or (ii) any misdemeanor involving moral turpitude. For purposes of this
definition, no act or omission shall be deemed willful unless done intentionally
and without a good faith belief by Executive that such act or omission was in
the best interest of the Company.

 

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(d) Termination without Cause; Resignation for Good Reason.

(i) Subject to the further provisions of this Section 5(d) and Section 6, if
during the Term or, if the Term expires without renewal or extension and prior
to a Change in Control, during the one-year period following the expiration of
the Term, the Company terminates Executive’s employment without Cause or
Executive resigns for Good Reason, the Company will pay Executive on the 60th
day following the Termination Date, in addition to the Accrued Obligations, a
lump-sum cash payment equal to the following (the “Severance Amount”):

 

  •  

One times the amount of Executive’s then-current annual rate of Base Salary
(based on the rate in effect immediately prior to the Termination Date); and

 

  •  

The cost of 12 months of COBRA coverage for Executive and his dependents (based
on the COBRA rates in effect on the Termination Date).

In addition, by no later than March 15th of the year following the year in which
the Termination Date occurs, Executive shall receive a pro rata portion of the
Annual Bonus (the “Pro Rata Bonus”) for the year of termination calculated on
the basis of the Company’s actual performance for such year and prorated based
on the numbers of days elapsed in such year through the Termination Date.

(ii) Subject to the further provisions of this Section 5(d) and Section 6, in
the event of Executive’s termination without Cause or resignation for Good
Reason, the portion of then outstanding PSUs and Options that would have vested
had Executive remained continuously employed by the Company through the end of
the one-year period following the Termination Date, and any outstanding unvested
RSUs, shall fully vest immediately as of the Termination Date (the “Additional
Equity Vesting”). The PSUs and RSUs entitled to Additional Equity Vesting
pursuant to this Section 5(d)(ii) shall become payable within 30 days following
their originally scheduled vesting dates contemplated by Sections 4(d)(iii) and
4(e)(iii), respectively. The Earn Out Number for any PSUs entitled to Additional
Equity Vesting pursuant to this Section 5(d)(ii) for which the Performance
Period has not been completed shall be determined after the end of the
Performance Period based on actual performance for the full Performance Period.
Any then vested Options (including Options that vested in accordance with this
paragraph) held by Executive shall remain exercisable for a period of one year
following the Termination Date (but not beyond the original term of the Options)
(“Extended Exercisability”).

(iii) The Company’s obligation to pay Executive the Severance Amount and the Pro
Rata Bonus and to provide the Additional Equity Vesting and the Extended
Exercisability are each expressly conditioned upon Executive’s execution and
timely delivery to the Company of a valid and irrevocable release agreement in
substantially the form of attached Schedule B by no later than 45 days following
the Termination Date.

 

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(iv) As used in this Section 5(d), “Good Reason” means any of the following acts
or omissions by the Company occurring without Executive’s prior written consent:
(A) any action by the Board which results in Executive ceasing to be the
senior-most executive officer of the Company or any other material adverse
change in Executive’s title, duties or reporting responsibilities; (B) the
assignment to Executive of duties materially inconsistent with Executive’s
position as the senior-most executive officer of the Company; (C) a reduction in
Executive’s rate of Base Salary or Annual Bonus opportunity or the failure by
the Company (other than by reason of bankruptcy, insolvency or receivership) to
pay Executive’s Base Salary or any earned Annual Bonus or, subject to
Section 4(g), to make the PSU, RSU or Option grant contemplated by this
Agreement; (D) the requirement by the Board that Executive move his principal
place of employment more than 50 miles from the location of his principal place
of employment on the Effective Date; or (E) any material breach by the Company
of this Agreement. Notwithstanding the above, an act or omission by the Company
shall not constitute an event of Good Reason unless Executive gives the Company
written notice within 60 days following the date Executive first knows, or
reasonably should have known, of the event constituting Good Reason of his
intention to resign for Good Reason if such Good Reason event is not cured by
the Company, and the Company does not cure such event (retroactively with
respect to any monetary matter) to the reasonable satisfaction of Executive
within 30 days following the date the Company receives such written notice from
Executive.

(e) Termination Due to Death or Disability.

(i) If, during the Term, Executive shall become unable to perform his duties as
provided for herein by reason of Disability (as defined below), then the Company
may, on 30 days’ prior written notice to Executive, temporarily suspend his
status as President and Chief Executive Officer of the Company. In the event of
such suspension, Executive shall remain an employee of the Company and receive
his compensation and benefits as set forth above in Section 4 for the lesser of:
(i) one year from the date of such suspension or (ii) the date on which
Executive is first eligible for long-term disability payments under the
Company’s long-term disability plan then applicable to him (the “Suspension
Period”). If during the Suspension Period, Executive returns to perform his
duties as provided for herein, and there is no physical or mental inability to
perform such duties, then Executive shall resume his status as President and
Chief Executive Officer, and the Company shall continue payment of his full
compensation and benefits as set forth in Section 4. Executive’s employment with
the Company shall terminate at the end of the Suspension Period if Executive has
not returned by the end of the Suspension Period to the full-time performance of
his duties hereunder.

(ii) If Executive’s employment terminates because of Executive’s death or
Disability, within 30 days of such termination, the Company will pay to
Executive (or Executive’s estate, in the case of Executive’s death) the Accrued
Obligations and any employee benefits to which Executive may be entitled to
pursuant to the Company’s employee benefit plans through such period; provided,
however, that, in the case of

 

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Executive’s death, benefit payments under any employee benefit plan shall be
paid to Executive’s beneficiary or beneficiaries designated pursuant to such
employee benefit plans in lieu of to his estate. In addition, by no later than
March 15th of the year following the year in which the Termination Date (as
defined in Section 5(g)(iv) or Section 5(g)(v) below, as applicable) occurs,
Executive (or Executive’s estate in the case of Executive’s death) shall also be
paid a Pro Rata Bonus for the year in which the termination occurs. Solely for
purposes of this Section 5(e), the date of Executive’s termination of employment
due to Disability or death shall be treated as the date of a termination without
Cause under Section 5(d) (but not Section 6) for purposes of the vesting,
payment and exercisability of then outstanding PSUs, RSUs and Options.

(iii) “Disability” means a determination by the Board after review of written
information provided by Executive’s healthcare provider that, as a result of a
physical or mental injury or illness, Executive has been unable to perform the
essential functions of Executive’s job for a period of 90 consecutive days.

(f) Unvested Options, PSUs and RSUs. Anything in this Agreement to the contrary
notwithstanding, any Options, PSU and RSU awards outstanding on the Termination
Date that have not vested prior to such Termination Date or that do not
expressly vest or remain outstanding by operation of this Section 5 or Section 6
below shall be forfeited on the Termination Date.

(g) Termination Date. For purposes of this Agreement, “Termination Date” shall
have the following meanings:

(i) in the event of Executive’s termination for Cause, subject to the applicable
notice provisions, the date specified in the written notice of termination
delivered to Executive by the Company in accordance with Section 5(c);

(ii) in the event of Executive’s resignation with or without Good Reason, the
90th day following the date the written notice of intention to resign is
received by the Company;

(iii) in the event of Executive’s termination without Cause, the 90th day
following the date the written notice of termination is received by Executive;

(iv) in the event of Executive’s termination due to death, the date of
Executive’s death; and

(v) in the event of Executive’s termination due to Disability, the last day of
the Suspension Period, if Executive has not returned to the full-time
performance of his duties as specified in Section 5(e) by such date.

6. Change in Control.

(a) Termination in Connection with a Change in Control.

 

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(i) In the event of a Change in Control occurring during the then existing Term,
the Term shall automatically continue until the second anniversary of the CIC
Date. In the event that the Company terminates Executive’s employment without
Cause or Executive resigns his employment with the Company for Good Reason, in
each case, upon or within 24 months following the date on which a Change in
Control occurs (such date of occurrence, the “CIC Date”), then: (A) in lieu of
the Severance Amount, the Company or its successor shall pay Executive no later
than the 60th day following the Termination Date a cash lump sum amount equal to
the sum of (1) four times Executive’s then annual rate of Base Salary plus
(2) two times the amount of the Annual Bonus paid or payable to Executive for
the calendar year prior to the calendar year in which the CIC Date occurs;
(B) all Options held by Executive shall immediately vest and become exercisable
for the period of Extended Exercisability; and (C) all PSUs and RSUs held by
Executive shall immediately vest and become payable within 30 days following
their regularly scheduled vesting dates contemplated by Sections 3(d)(iii) and
4(e)(iii), respectively; provided, however, the Earn Out Number for the PSU
grant contemplated by this Agreement for which the Performance Period has not
been completed shall be based on extrapolated performance for the Performance
Period (based on actual performance through the Termination Date), adjusted in
an equitable manner determined by the Committee to take into account the Change
in Control; and further provided that in no event shall the Earn Out Number as
determined hereunder exceed that which would be payable in connection with
target performance. Notwithstanding anything herein to the contrary, Executive’s
entitlements under clauses (A), (B) and (C) of this Section 6(a)(i) are each
expressly conditioned upon the timely satisfaction of the release delivery
requirements of Section 5(d)(iii).

(ii) Notwithstanding Section 6(a)(i) above, in the event of a consolidation or
merger of the Company described in clause (A)(I) of the definition of Change in
Control in Section 6(a)(iii) in which the consideration received by the
stockholders of the Company in the Change in Control consists exclusively of
cash, securities not listed for trading on a national securities exchange or
automated quotation system, or a combination of cash and such unlisted
securities, then the following shall apply: (A) all then outstanding Options
shall immediately vest in full upon the CIC Date and the Company or its
successor shall cause Executive to receive in cancellation of such Options a
lump sum cash payment equal to the product of the number of shares of common
stock underlying such Options multiplied by the fair market value of the
consideration per share paid to the Company’s stockholders in the merger or
consolidation less the aggregate exercise price of such Options; and (B) all
outstanding PSUs and RSUs shall vest in full immediately prior to the CIC Date
and shall be settled through the delivery of shares of the Company’s common
stock to Executive. For purposes of the previous sentence, the Earn Out Number
for any previously granted PSUs for which the Performance Period has not been
completed on the CIC Date shall be based on target performance. Notwithstanding
anything herein to the contrary, no acceleration of the settlement or delivery
of any PSUs or RSUs pursuant to this Section 6(a)(ii)(B) shall occur unless the
Change in Control constitutes a “change in ownership,” “change in effective
control” or “change in the ownership of a substantial portion of the assets” of
the Company, as such terms are described in Treas. Reg. Section 1.409A-3(i)(5).

 

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(iii) For purposes of this Agreement, and notwithstanding any contrary
definition in the Omnibus Plan as to the treatment of the PSUs and RSUs under
this Agreement, a “Change in Control” shall be deemed to have occurred if:
(A) there shall be consummated (I) any consolidation or merger in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of the Company’s common stock would be converted into cash, securities or
other property, other than a consolidation or a merger having the same
proportionate ownership of common stock of the surviving corporation immediately
after the consolidation or merger or (II) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions other than in
the ordinary course of business of the Company) of all, or substantially all, of
the assets of the Company to any corporation, person or other entity which is
not a direct or indirect wholly-owned subsidiary of the Company, (B) any person,
group, corporation or other entity (collectively, “Persons”) shall acquire
beneficial ownership (as determined pursuant to Section 13(d) of the Securities
Exchange Act of 1934, as amended, and rules and regulations promulgated
hereunder) of more than 50% of the Company’s outstanding common stock or voting
securities or (C) individuals who, as of the Effective Date, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the Effective Date whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest or
other actual or threatened solicitation of proxies or consents by or on behalf
of a person other than the Board.

(iv) For purposes of this Agreement, the “CIC Date” shall mean: (A) with respect
to a transaction contemplated under clause (A)(I) of Section 6(a)(iii), the
closing date of such consolidation or merger; (B) with respect to a transaction
contemplated under clause A(II) of Section 6(a)(iii), the date on which such
sale, lease, exchange or other transfer is completed (which shall be the
completion date of the final transaction if a series of transactions is
contemplated); (C) with respect to an acquisition contemplated under clause
(B) of Section 6(a)(iii), the date of the closing of the tender offer or other
acquisition pursuant to which the requisite beneficial ownership percentage is
acquired by such Person or Persons; and (D) with respect to a change in Board
composition contemplated under clause (C) of Section 6(a)(iii), the date of
appointment of the director or group of directors that would cause the Incumbent
Board to cease to constitute a majority for purposes of such clause (C).

 

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(b) Limitation on Change in Control Payments. Notwithstanding anything in this
Agreement to the contrary, in the event that it is determined by an independent
accounting firm chosen by mutual agreement of the parties (the “Accounting
Firm”) that any economic benefit, payment or distribution by the Company to or
for the benefit of Executive, whether paid, payable, distributed or
distributable pursuant to the terms of this Agreement or otherwise
(a “Payment”), would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (and the applicable regulations
thereunder) (the “Code”) (such excise tax referred to in this Agreement as
the “Excise Tax”), then the value of any such Payments payable under this
Agreement (the “Agreement Payments”) which constitute “parachute payments” under
Section 280G(b)(2) of the Code, as determined by the Accounting Firm, will be
reduced so that the present value of all Payments (calculated in accordance with
Section 280G of the Code and the regulations thereunder), in the aggregate, is
equal to 2.99 times Executive’s “base amount,” within the meaning of
Section 280G(b)(3) of the Code (the “Reduced Amount”). Notwithstanding the
foregoing, the Agreement Payments shall be reduced to the Reduced Amount only if
the Accounting Firm determines that Executive would have a greater “Net
After-Tax Receipt” (as defined below) of aggregate Payments if Executive’s
Agreement Payments were reduced to the Reduced Amount. “Net After Tax-Receipt”
shall mean the present value (as determined in accordance with
Section 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a Payment net of all
taxes imposed on Executive with respect thereto under Sections 1 and 4999 of the
Code and under applicable state and local laws (and including any employment,
social security or Medicare taxes, and other taxes (including any other excise
taxes)), determined by applying the highest marginal rate under Section 1 of the
Code and under state and local laws which applied to Executive’s taxable income
for the tax year in which the CIC Date occurs, or such other rate(s) as the
Accounting Firm determines to be likely to apply to Executive in the relevant
tax year(s) in which any Payment is expected to be made.

7. Restrictions and Obligations of Executive.

(a) Non-Disparagement. Executive will not at any time (whether during or after
the Term) publish or communicate to any person or entity any Disparaging
remarks, comments or statements concerning the Company or any member of the
Company Group and any of its or their respective present and former members,
partners, directors, officers, stockholders, employees, agents, attorneys,
successors, assigns, clients and agents. The Company will not at any time
(whether during or after the Term) cause or assist the then-current Chief
Executive Officer (if not Executive) or any of its then-current directors to
publish or communicate, to any person or entity any Disparaging remarks,
comments or statements concerning Executive. “Disparaging” remarks, comments or
statements are those that impugn the character, honesty, integrity, morality,
business acumen or abilities in connection with any aspect of the operation of
business of the individual or entity being disparaged.

(b) Confidentiality.

(i) During the course of Executive’s employment, Executive has had and will have
access to certain trade secrets and confidential information relating to the
Company and the members of the Company Group which is not readily available from
sources outside the Company. The parties agree that the business in which the
Company and the Company Group engages is highly sales-oriented and the goodwill
established between Executive and the Company’s customers and potential
customers is a valuable and legitimate business interest worthy of protection
under this Agreement. Executive

 

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recognizes that, by virtue of Executive’s employment by the Company, Executive
is granted otherwise prohibited access to the Company Group’s confidential and
proprietary data which is not known to its competitors and which has independent
economic value to the Company and that Executive will gain an intimate knowledge
of each member of the Company Group’s reinsurance business and its policies,
customers, employees and trade secrets, and of other confidential, proprietary,
privileged or secret information of the Company and its clients (collectively,
all such nonpublic information is referred to as “Confidential Information”).
This Confidential Information includes, but is not limited to, data relating to
each member of the Company Group’s marketing and servicing programs, procedures
and techniques, business, management and personnel strategies, analytic tools
and processes, the criteria and formulae used by the Company and other members
of the Company Group in pricing its insurance products and claims management,
loss control and information management services, the Company’s and each Company
Group member’s computer system, reinsurance marketing program and the skill of
marketing and selling products, the structure and pricing of special reinsurance
products or packages that each member of the Company Group has negotiated with
various underwriters, lists of prospects, customer lists and renewals, the
identity, authority and responsibilities of key contacts at clients’ accounts,
the composition and organization of clients’ business, the peculiar risks
inherent in a client’s operations, highly sensitive details concerning the
structure, conditions and extent of a client’s existing insurance and
reinsurance coverages, policy expiration dates and premium amounts, commission
rates, risk management service arrangements, loss histories and other data
showing clients’ particularized insurance requirements and preferences.

(ii) Except as required by law or an order of a court or governmental agency
with jurisdiction, Executive will not, during the Term or any time thereafter,
disclose any Confidential Information, directly or indirectly, to any person or
entity for any reason or purpose whatsoever, nor will Executive use Confidential
Information for any commercial or business purpose. Executive will take all
reasonable steps to safeguard the Confidential Information and to protect it
against disclosure, misuse, espionage, loss and theft. Executive understands and
agrees that Executive will acquire no rights to any such Confidential
Information.

(iii) At the Company’s request from time to time and upon the termination of
Executive’s employment for any reason, Executive will promptly deliver to the
Company all copies and embodiments, in whatever form, of all Confidential
Information in Executive’s possession or within Executive’s control (including,
but not limited to, memoranda, records, notes, plans, photographs, manuals,
notebooks, documentation, program listings, flow charts, magnetic media, disks,
diskettes, tapes and all other materials containing any Confidential
Information) irrespective of the location or form of such material. If requested
by the Company, Executive will provide the Company with written confirmation
that all such materials have been delivered to the Company as provided herein.

 

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(iv) Notwithstanding anything herein to the contrary, Executive shall have the
right under Federal law to certain protections for cooperating with or reporting
legal violations to the Securities and Exchange Commission (the “SEC”) and/or
its Office of the Whistleblower, as well as certain other governmental entities.
No provisions in this Agreement are intended to prohibit Executive from
disclosing this Agreement to, or from cooperating with or reporting violations
to, the SEC or any other such governmental entity, and Executive may do so
without disclosure to the Company. The Company may not retaliate against
Executive for any of these activities, and nothing in this Agreement would
require Executive to waive any monetary award or other payment that Executive
might become entitled to from the SEC or any other governmental entity.

(c) Non-Solicitation or Hire. While employed by the Company and for a period of
36 months following the termination of Executive’s employment for any reason
(whether during or after the Term) (the “Non-Solicit Period”), Executive will
not directly or indirectly solicit or attempt to solicit or induce, directly or
indirectly: (1) any person who is a client, customer or policyholder of any
member of the Company Group, or who was a client, customer or policyholder of
any member of the Company Group at any time during the one-year period
immediately prior to the Termination Date, for the purpose of marketing, selling
or providing to any such party any services or products offered by or available
from any member of the Company Group and (2) any employee of, or independent
contractor or consultant to, any member of the Company Group or any person who
was an employee of, or independent contractor or consultant to, any member of
the Company Group during the one-year period immediately prior to the
Termination Date to terminate such employee’s employment relationship or such
independent contractor’s or consultant’s relationship with such member of the
Company Group, in either case, to enter into a similar relationship with
Executive or any other person or any entity in competition with any member of
the Company Group. During the Non-Solicit Period, Executive will not enter into
an employment, consulting or independent contractor relationship, directly or
indirectly, with any employee of, or independent contractor or consultant to,
any member of a Company Group or any person who was an employee of, or
independent contractor or consultant to, any member of a Company Group during
the one-year period immediately prior to the date Executive’s employment
terminates. Notwithstanding the foregoing, solicitations incidental to general
advertising or other general solicitations in the ordinary course not
specifically targeted at such employees, independent contractors or consultants
and employment of (or entry into an independent contractor or consultancy
relationship with) any person not otherwise solicited in violation hereof shall
not be considered a violation of this Section 7(c). Executive shall not be in
violation of this Section 7(c) solely by providing a reference for a former
employee of, or independent contractor or consultant to, the Company.

(d) Non-Competition. While employed by the Company and for a period of 36 months
following Executive’s termination of employment for any reason (whether during
or after the Term) (the “Non-Compete Period”), Executive will not, whether
individually, as a director, manager, member, stockholder, partner, owner,
employee, consultant or agent of any business, or in any other capacity, other
than on behalf of a member of the Company Group,

 

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organize, establish, own, operate, manage, control, engage in, participate in,
invest in, permit Executive’s name to be used by, act as a consultant or advisor
to, render services for (alone or in association with any person, firm,
corporation or business organization) or otherwise assist any person or entity
that engages in or owns, invests in, operates, manages or controls any venture
or enterprise which engages or proposes to engage in any business conducted by
any member of the Company Group during the one-year period immediately prior to
the date Executive’s employment terminates. In the event that the Term expires
on December 31, 2019 and Executive and Company have not entered into a new
employment agreement or renewed this Agreement on or prior to such date, the
Non-Compete Period shall expire on December 31, 2021.

(e) Company Policies. During the Term and all periods thereafter, Executive will
remain in material compliance with the Company’s policies and guidelines,
including the Company’s code of business conduct or code of ethics.

8. Remedies; Specific Performance. The parties acknowledge and agree that
Executive’s breach or threatened breach of any of the restrictions set forth in
Section 7 will result in irreparable and continuing damage to the Company and
the Company Group for which there may be no adequate remedy at law and that the
Company and the Company Group are entitled to equitable relief, including
specific performance and injunctive relief as remedies for any such breach or
threatened or attempted breach. Executive consents to the grant of an injunction
(temporary or otherwise) against Executive or the entry of any other court order
against Executive prohibiting and enjoining Executive from violating, or
directing Executive to comply with, any provision of Section 7. Executive also
agrees that such remedies are in addition to any and all remedies, including
damages, available to the Company and the Company Group against Executive for
such breaches or threatened or attempted breaches. In addition, without limiting
the Company’s and the Company Group’s remedies for any breach of any restriction
on Executive set forth in Section 7, except as required by law, Executive is not
entitled to any payments set forth in Sections 5(d) or 6(a) if Executive has
materially breached the covenants contained in Section 7. Executive will
immediately return to the Company any such payments previously received under
Sections 5(d) or 6(a) upon such a material breach and, in the event of such
breach, the Company will have no obligation to pay any of the amounts that
remain payable by the Company under Sections 5(d) or 6(a).

9. Code Section 409A. The provisions of this Section 9 shall apply
notwithstanding any provision of this Agreement.

(a) Delay of Payments. If, at the time of Executive’s termination or resignation
with the Company, Executive is a Specified Employee (as defined below), then any
amounts payable to Executive that the Company determines constitute deferred
compensation within the meaning of Section 409A of the Code and which are
subject to the six-month delay required by Treas. Reg.
Section 1.409A-1(c)(3)(v), shall be delayed and not paid to Executive until the
first business day following the six-month anniversary of Executive’s date of
termination or resignation (the “Deferral Date”), at which time such delayed
amounts will be paid to Executive in a cash lump sum (the “Catch-Up Amount”). If
payment of an amount is delayed as a result of this Section 9(a), such amount
shall be increased with interest from the date on which such amount would
otherwise have been paid to Executive but for this Section 9(a) to the day prior
to

 

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the date the Catch-Up Amount is paid. The rate of interest shall be the
applicable short-term federal rate applicable under Section 7872(f)(2)(A) of the
Code for the month in which the date of Executive’s termination or resignation
occurs. Such interest shall be paid at the same time that the Catch-Up Amount is
paid. If Executive dies on or after the date of Executive’s termination or
resignation of employment and prior to the Deferral Date, any amount delayed
pursuant to this Section 9(a) shall be paid to Executive’s estate or
beneficiary, as applicable, together with interest, within 30 days following the
date of Executive’s death.

(b) “Specified Employee” has the meaning set forth in
Section 409A(a)(2)(B)(i) of the Code. The determination of whether Executive
constitutes a Specified Employee on the date of his termination or resignation
shall be made in accordance with the Company’s established methodology for
determining Specified Employees.

(c) “Separation from Service” means a “separation from service” from the Company
within the meaning of the default rules under the final regulations issued
pursuant to Section 409A of the Code. For purposes of compliance with
Section 409A of the Code, when used in this Agreement, the terms “terminate,”
“terminated,” “termination,” “resign,” “resigned” and “resignation” mean a
termination of Executive’s employment that constitutes a Separation from
Service.

(d) Separate Payments and Reimbursements. For purposes of applying the
provisions of Section 409A of the Code to this Agreement, each separately
identifiable amount to which Executive is entitled under this Agreement shall be
treated as a separate payment. To the extent any reimbursements or in-kind
benefit payments under this Agreement are subject to Section 409A, such
reimbursements and in-kind benefit payments shall be made in accordance with
Section 409A, and payments of such reimbursements or in-kind benefits shall be
made on or before the last day of the calendar year following the calendar year
in which the relevant expense is incurred.

10. Stock Ownership Guidelines. Executive will comply with all stock ownership
and stock retention guidelines or policies established by the Board and the
Committee, as in effect from time to time.

11. Claw Back Policy. All compensation granted to Executive hereunder shall be
subject to any and all claw back policies of the Company, as in effect from time
to time.

12. Notice. For purposes of this Agreement, all notices and other communications
will be in writing and will be deemed to have been duly given when delivered or
if sent either by Federal Express, hand-delivery, e-mail, or postage prepaid, by
certified mail, return receipt requested, with a copy by ordinary mail, to the
addresses below:

 

If to Executive:

   If to the Company:

Sean P. Downes

At Executive’s most recent address

on file with the Company

  

Universal Insurance Holdings, Inc.

1110 West Commercial Boulevard

Fort Lauderdale, Florida 33309

Attn: Beth Wallace

 

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or to such other address as any party may have furnished to the other in writing
in accordance with this Section 12, except that notices of any change of address
is effective only upon actual receipt.

13. Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto, including, without
limitation, the Prior Agreement; provided, however, that the terms of this
Agreement shall not supersede or replace any equity award made prior to the
Effective Date. No severance or other termination payments are payable to
Executive under the Prior Agreement or under any other plan or arrangement of
the Company in connection with the execution of this Agreement or the
termination of the Prior Agreement.

14. Waiver and Amendments. This Agreement may be amended, modified, superseded,
canceled, renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by the parties or, in the case of a
waiver, by the party waiving compliance. Except as provided in Section 5(d)(iv),
no delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any right, power or privilege hereunder, nor any single or partial exercise of
any right, power or privilege hereunder, preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.

15. Governing Law. This Agreement and the implementation of it shall be subject
to and governed by the laws of the State of Florida applicable to contracts
fully executed and performed in such State.

16. Venue. The parties agree that the exclusive venue for any litigation
relating to this Agreement will be the state courts located in Broward County,
Florida and the United States District Court, Southern District of Florida, Fort
Lauderdale Division in Broward County, Florida. The parties waive any rights to
object to venue as set forth herein, including any argument of inconvenience for
any reason.

17. Assignability by the Company and Executive. The Company shall have the right
to assign this Agreement to its successors or assigns, and Executive hereby
consents to any such assignment. All covenants or agreements hereunder shall
inure to the benefit of, and be enforceable by or against, the Company’s
successors or assigns. The terms “successors” and “assigns” shall include, but
not be limited to, any successor upon a Change in Control. Executive may not
assign this Agreement or the rights and entitlements hereunder, except that any
payments owed to Executive under this Agreement in the event of his death shall
be payable to his estate. Executive may not delegate his duties and
responsibilities hereunder.

18. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original but all of which will constitute one and the same
instrument.

 

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19. Headings. The headings in this Agreement are for convenience of reference
only and will not limit or otherwise affect the meaning of terms contained
herein.

20. Severability. If any term, provision, covenant or restriction of this
Agreement, or any part thereof, is held by a court of competent jurisdiction of
any foreign, federal, state, county or local government or any other
governmental, regulatory or administrative agency or authority to be invalid,
void, unenforceable or against public policy for any reason, the remainder of
the terms, provisions, covenants and restrictions of this Agreement will remain
in full force and effect and will in no way be affected or impaired or
invalidated. If any court determines that any of such covenants, or any part
thereof, is invalid or unenforceable because of the geographic or temporal scope
of such provision, such court will reduce such scope to the minimum extent
necessary to make such covenants valid and enforceable. Executive acknowledges
that the restrictive covenants contained in Section 7 are a condition of this
Agreement and are reasonable and valid in temporal scope and in all other
respects.

21. Tax Withholding. The Company or other payor is authorized to withhold from
any benefit provided or payment due hereunder, the amount of withholding taxes
due any federal, state or local authority in respect of such benefit or payment
and to take such other action as may be necessary in the Company’s opinion to
satisfy all obligations for the payment of such withholding taxes.

22. Obligations Survive Termination of Employment. The termination of
Executive’s employment for whatever reason will not impair or relieve Executive
of any of Executive’s obligations under this Agreement which, by their express
terms or by implication, extend beyond the term of Executive’s employment.

[remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have executed this Agreement as of the day and year first above mentioned.

 

 

EXECUTIVE:

/s/ SEAN P. DOWNES

Sean P. Downes UNIVERSAL INSURANCE HOLDINGS, INC.

/s/ MICHAEL A. PIETRANGELO

By:   Michael A. Pietrangelo Title:   Chairman   Compensation Committee of the  
Board of Directors

 

 

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Schedule A

2019 PERFORMANCE GOALS APPLICABLE TO PSUs

A. Description of Performance Objective.

For the PSUs granted on the Effective Date under the Agreement, the performance
objective to determine the Earn Out Number shall be policy count as measured by
growth in Non-Florida Premiums for 2019 in comparison to Non-Florida Premiums
for 2018.

B. Calculation of the Earn Out Number.

The Earn Out Number will be:

1. Zero, if the Performance Level is less than 125%.

2. 100% of the Specified Number, if the Performance Level is 125% or greater.

C. Definitions and Certification.

“Non-Florida Premiums” for any year shall be the aggregate amount of in-force
rate adequate premiums for such year from states other than Florida as reported
in the Policy Portfolio and Claims Liability Overview Reports (the “Reports”)
presented to the Company’s Board of Directors. The methodology for determining
rate adequate in-force premiums shall be consistently applied in the 2018 and
2019 Reports.

“Performance Level” means a percentage equal to (i) the aggregate amount of
Non-Florida Premiums for 2019 divided by (ii) the aggregate amount of
Non-Florida Premiums for 2018.

All results under this Schedule A shall be objectively determined in accordance
with the methodology used to prepare the reports noted above and consistently
applied from year-to-year and certified in writing by the Company’s Chief
Financial Officer based upon such reports, and the Earn Out Number shall be
subject to the Committee’s approval, and such certification and approval shall
be binding and conclusive on all parties.

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Schedule B

RELEASE AGREEMENT

In consideration of the payments and benefits to be provided to him by Universal
Insurance Holdings, Inc. ( the “Company”) pursuant to the agreement dated as of
February 27, 2019, by and between the Company and himself (the “Employment
Agreement”), Sean P. Downes (“Executive”), agrees to be bound by this Release
Agreement (the “Agreement”).

Accordingly, Executive agrees as follows:

1. Release.

(a) Executive waives any claims he may have for employment by the Company and
agrees not to seek such employment or reemployment by the Company in the future.
Further, in consideration of the payments and benefits to be provided by the
Company pursuant to the Employment Agreement, Executive, on behalf of himself
and his heirs, executors, devisees, successors and assigns, knowingly and
voluntarily releases, remises, and forever discharges the Company and its
parents, subsidiaries or affiliates, together with each of their current and
former principals, officers, directors, stockholders, agents, representatives
and employees, and each of their heirs, executors, successors and assigns
(collectively, the “Releasees”), from any and all debts, demands, actions,
causes of action, accounts, covenants, contracts, agreements, claims, damages,
omissions, promises, and any and all claims and liabilities whatsoever, of every
name and nature, known or unknown, suspected or unsuspected, both in law and
equity (“Claims”), which Executive ever had, now has, or may hereafter claim to
have against the Releasees by reason of any matter or cause whatsoever arising
from the beginning of time to the time he signs this Agreement (the “General
Release”). This General Release of Claims shall apply to any Claim of any type,
including, without limitation, any and all Claims of any type that Executive may
have arising under the common law, under Title VII of the Civil Rights Act of
1964, the Civil Rights Act of 1991, the Older Workers Benefit Protection Act,
the Americans With Disabilities Act of 1967, the Family and Medical Leave Act of
1993, the Employee Retirement Income Security Act of 1974, and the
Sarbanes-Oxley Act of 2002, each as amended, and any other federal, state, local
or foreign statutes, regulations, ordinances or common law, or under any policy,
agreement, contract, understanding or promise, written or oral, formal or
informal, between any of the Releasees and Executive, and shall further apply,
without limitation, to any and all Claims in connection with, related to or
arising out of Executive’s employment relationship, or the termination of his
employment, with the Company.

(b) For the purpose of implementing a full and complete release, Executive
understands and agrees that this Agreement is intended to include all claims, if
any, which Executive or his heirs, executors, devisees, successors and assigns
may have and which Executive does not now know or suspect to exist in his favor
against the Releasees, from the beginning of time until the time he signs this
Agreement, and this Agreement extinguishes those claims.

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(c) In consideration of the promises of the Company set forth in the Employment
Agreement, Executive hereby releases and discharges the Releasees from any and
all Claims that Executive may have against the Releasees arising under the Age
Discrimination Employment Act of 1967, as amended, and the applicable rules and
regulations promulgated thereunder (“ADEA”). Executive acknowledges that he
understands that the ADEA is a federal statute that prohibits discrimination on
the basis of age in employment, benefits and benefit plans. Executive also
understands that, by signing this Agreement, he is waiving all Claims against
any and all of the Releasees.

(d) This General Release shall not apply to (i) any obligation of the Company
pursuant to the Employment Agreement, (ii) any benefit to which Executive is
entitled under any tax qualified pension plan of the Company or its affiliates,
COBRA continuation coverage benefits, vested benefits under other benefit plans
of the Company or its affiliates or any other welfare benefits required to be
provided by statute, (iii) any claim related to acts, omissions or events
occurring after the date this Agreement is signed by Executive and (iv) any
right as a former employee of the Company that Executive may have to
indemnification under the bylaws of the Company or under any directors and
officers liability insurance policy then applicable to him.

Capitalized words not otherwise defined herein have the meanings assigned
thereto in the Employment Agreement.

2. Consultation with Attorney; Voluntary Agreement. The Company advises
Executive to consult with an attorney of his choosing prior to signing this
Agreement. Executive understands and agrees that he has the right and has been
given the opportunity to review this Agreement and, specifically, the General
Release in Section 1 above, with an attorney. Executive also understands and
agrees that he is under no obligation to consent to the General Release set
forth in Section 1 above. Executive acknowledges and agrees that the payments to
be made to Executive pursuant to the Employment Agreement are sufficient
consideration to require him to abide with his obligations under this Agreement,
including but not limited to the General Release set forth in Section 1.
Executive represents that he has read this Agreement, including the General
Release set forth in Section 1, and understands its terms and that he enters
into this Agreement freely, voluntarily, and without coercion.

3. Effective Date; Revocation. Executive acknowledges and represents that he has
been given at least 21 days during which to review and consider the provisions
of this Agreement and, specifically, the General Release set forth in Section 1
above. Executive further acknowledges and represents that he has been advised by
the Company that he has the right to revoke this Agreement for a period of seven
days after signing it. Executive acknowledges and agrees that, if he wishes to
revoke this Agreement, he must do so in a writing, signed by him and received by
the Company no later than 5:00 p.m. Eastern Time on the seventh day of the
revocation period. If no such revocation occurs, the General Release and this
Agreement shall become effective on the eighth day following his execution of
this Agreement.

4. Severability. In the event that any one or more of the provisions of this
Agreement are held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remainder of this Agreement shall not in any
way be affected or impaired thereby.

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5. Waiver. No waiver by either party of any breach by the other party of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of any other provision or condition at the time or at
any prior or subsequent time.

6. Governing Law. This Agreement and the implementation of it shall be subject
to and governed by the laws of the State of Florida applicable to contracts
fully executed and performed in such State.

 

EXECUTIVE:

 

Sean P. Downes