SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Universal Insurance Holdings, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11:
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement Number:
3) Filing Party:
4) Date Filed:
November 14, 2005
Dear Shareholder:
On behalf of the Board of Directors, I invite you to attend the 2005
Annual Meeting of Shareholders ("Annual Meeting") of Universal Insurance
Holdings, Inc. ("Company"). The Annual Meeting will be held at 10:00 a.m.,
Eastern Standard Time, on Wednesday, December 7, 2005 at the executive offices
of the Company, 1110 West Commercial Boulevard, Suite 100, Fort Lauderdale,
Florida 33309.
The shareholders will be asked (i) to elect five directors to hold office
until the 2006 annual meeting or until their successors have been elected and
qualified; (ii) to approve an amendment to the Company's Certificate of
Incorporation, as amended and restated, to increase the number of authorized
shares of common stock of the Company from 40,000,000 shares to 50,000,000
shares; and (iii) to ratify the appointment of Blackman Kallick Bartelstein LLP
as the independent registered public accounting firm of the Company for the year
ending December 31, 2005. The Board of Directors has unanimously approved these
proposals and we urge you to vote in favor of these proposals and in accordance
with the Board's recommendation on such other matters as may be submitted to you
for a vote at the meeting.
Your vote is very important, regardless of the number of shares you own.
Please sign and return each proxy card that you receive in the enclosed
postage-paid envelope, which is provided for your convenience. The return of
your proxy card will not prevent you from voting in person but will assure that
your vote is counted if you are unable to attend the Annual Meeting. We look
forward to seeing you on December 7, 2005.
Sincerely,
/s/ Bradley I. Meier
--------------------
President
1110 West Commercial Boulevard, Suite 100, Fort Lauderdale, Florida 33309, (954)
958-1200
UNIVERSAL INSURANCE HOLDINGS, INC.
1110 WEST COMMERCIAL BOULEVARD, SUITE 100
FORT LAUDERDALE, FLORIDA 33309
NOTICE
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 7, 2005
NOTICE IS HEREBY GIVEN that the 2005 Annual Meeting of Shareholders
("Annual Meeting") of Universal Insurance Holdings, Inc., a Delaware corporation
("Company"), will be held at 10:00 a.m., Eastern Standard Time, on Wednesday,
December 7, 2005, at the executive offices of the Company, 1110 West Commercial
Boulevard, Suite 100, Fort Lauderdale, Florida 33309, for the following
purposes:
1. To elect five directors, each to hold office until the 2006 annual
meeting or until their successors have been elected and qualified;
2. To approve an amendment to the Company's Certificate of
Incorporation, as amended and restated, to increase the number of
authorized shares of common stock of the Company from 40,000,000
shares to 50,000,000 shares;
3. To ratify the appointment of Blackman Kallick Bartelstein LLP as the
independent registered public accounting firm of the Company for the
year ending December 31, 2005; and
4. To transact any other business as may properly come before the
Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on November 9,
2005 as the record date for the determination of shareholders entitled to notice
of, and to vote at, the Annual Meeting and at any adjournment thereof. A
complete list of shareholders of record of the Company on the record date will
be available for examination by any shareholder, for any purpose germane to the
Annual Meeting, during ordinary business hours, for the ten-day period prior to
the Annual Meeting, at the executive offices of the Company, 1110 West
Commercial Boulevard, Suite 100, Fort Lauderdale, Florida 33309.
It is important that your shares be represented at the Annual Meeting.
Whether or not you expect to be present, please fill in, date, sign and return
the enclosed proxy form in the accompanying addressed, postage-prepaid envelope.
If you attend the meeting, you may revoke your proxy and vote in person.
In the event that there are not sufficient votes to approve any one of
the foregoing proposals at the time of the Annual Meeting, the Annual Meeting
may be adjourned to permit further solicitation of proxies by the Company.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Norman M. Meier
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Secretary
Fort Lauderdale, Florida
November 14, 2005
WHETHER OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING,
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT AS PROMPTLY AS
POSSIBLE IN THE ACCOMPANYING POSTAGE-PREPAID ENVELOPE. SHAREHOLDERS WHO ATTEND
THE MEETING MAY REVOKE THEIR PROXIES AT THE MEETING AND VOTE IN PERSON.
UNIVERSAL INSURANCE HOLDINGS, INC.
1110 WEST COMMERCIAL BOULEVARD, SUITE 100
FORT LAUDERDALE, FLORIDA 33309
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors ("Board") of Universal Insurance Holdings, Inc., a
Delaware corporation ("Company"), of proxies to be voted at the Annual Meeting
of Shareholders of the Company ("Annual Meeting"), to be held at the executive
offices of the Company, 1110 West Commercial Boulevard, Suite 100, Fort
Lauderdale, Florida 33309, on Wednesday, December 7, 2005 at 10:00 a.m., Eastern
Standard Time, and at any and all postponements or adjournments thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting.
A copy of the Annual Report of the Company for its fiscal year ended
December 31, 2004 is included. This Proxy Statement, Notice of Annual Meeting,
accompanying proxy card, and Annual Report are first expected to be mailed to
shareholders on or about November 14, 2005.
INFORMATION RELATING TO VOTING AT THE ANNUAL MEETING
The close of business on November 9, 2005 has been fixed by the Board as
the record date ("Record Date") for determination of shareholders entitled to
notice of, and to vote at, the Annual Meeting. Therefore, only shareholders of
record as of the close of business on November 9, 2005 are entitled to notice
of, and to vote at, the Annual Meeting or any postponements or adjournments
thereof. The securities to be voted at the Annual Meeting consist of (i) shares
of Common Stock of the Company, $0.01 par value per share ("Common Stock"), with
each share entitling its record owner to one vote, (ii) shares of Series M
Preferred Stock of the Company, $0.01 par value per share ("Series M Preferred
Stock"), with each share entitling its record owner to one vote and (iii) shares
of Series A Preferred Stock of the Company, $0.01 par value per share ("Series A
Preferred Stock"), with each share entitling its record owner to one vote. The
holders of Series M Preferred Stock, voting separately as a series, are entitled
to elect two directors. The holders of Common Stock, Series M Preferred Stock
and Series A Preferred Stock, voting together as one class, are entitled to
elect the remaining directors.
If the accompanying proxy card is properly signed, returned to the
Company in time to be voted at the Annual Meeting, and not revoked, the shares
represented by such card will be voted in accordance with the instructions
contained on such card. Unless contrary instructions are given, the persons
designated as proxy holders in the proxy card will vote FOR Proposals 1, 2 and
3. If any other matters properly come before the Annual Meeting, the persons
named as proxy holders will vote upon such matters as determined by a majority
of the Board.
Each shareholder may revoke a previously granted proxy at any time before
it is exercised by filing with the Secretary of the Company a revoking
instrument or a duly executed proxy bearing a later date. The powers of the
proxy holders will be suspended if the person executing the proxy attends the
Annual Meeting in person and so requests. Attendance at the Annual Meeting will
not, in itself, constitute revocation of a previously granted proxy.
CLASS OF VOTING NUMBER OF RECORD NUMBER OF SHARES AMOUNT OF VOTES
STOCK HOLDERS OUTSTANDING ENTITLED TO BE
----- AS OF THE RECORD DATE AS OF THE RECORD CAST
--------------------- DATE AS OF THE RECORD
---- DATE
----
Common Stock 41 36,463,219 36,463,219
Series M Preferred Stock 4 88,690 88,690
Series A Preferred Stock 3 49,950 49,950
The Company had no other class of voting securities outstanding on the
Record Date.
The presence, in person or by proxy of at least a majority of the total
number of outstanding shares of the Series M Preferred Stock entitled vote at
the Annual Meeting for those matters where a separate vote of the Series M
Preferred Stock is required, and of at least a majority of the total number of
outstanding shares of the Common Stock, Series M Preferred Stock and Series A
Preferred Stock entitled to vote at the Annual Meeting for those matters where
the Common Stock, Series M Preferred Stock and Series A Preferred Stock, voting
together as a class, is required, is necessary to constitute a quorum at the
Annual Meeting. If a quorum is not present at the Annual Meeting, a majority of
the shares so represented may vote to adjourn the Annual Meeting from time to
time without further notice. If a quorum is present, the affirmative vote of a
majority of the votes actually cast at the meeting, whether in person or by
proxy, is necessary to elect the nominees for directors. With respect to the
amendment of the Company's Certificate of Incorporation, the vote required for
approval shall be the affirmative vote of the holders of at least a majority of
the issued and outstanding shares of capital stock entitled to vote at the
Annual Meeting. There is no cumulative voting in the election of directors. With
respect to any other matter properly brought before the Annual Meeting, or any
adjournment of the Annual Meeting, the vote required for approval shall be the
affirmative vote of a majority of the total number of votes that those present
at the Annual Meeting, in person or by proxy, are entitled to cast.
Under Delaware law, shares represented at the Annual Meeting (either by
properly executed proxies or in person) that reflect abstentions or "broker
non-votes" (I.E., shares held by a broker or nominee that are represented at the
Annual Meeting, but with respect to which such broker or nominee is not
empowered to vote on a particular proposal) will be counted as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. Abstentions as to any proposal will have the same effect as votes
against the proposal. With respect to Proposals 1 and 3, broker non-votes will
be treated as unvoted for purposes of determining approval of such proposals
(and therefore will reduce the absolute number - although not the percentage -
of votes needed for approval) and will not be counted as votes for or against
the proposals. With respect to Proposal 2, however, broker non-votes will have
the same effect as votes against the proposal.
A shareholder may revoke his or her proxy at any time prior to its
exercise by (i) filing with Norman M. Meier, Secretary, Universal Insurance
Holdings, Inc., 1110 West Commercial Boulevard, Suite 100, Fort Lauderdale,
Florida 33309, written notice thereof, (ii) submitting a duly executed proxy
bearing a later date, or (iii) appearing at the Annual Meeting and giving the
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Secretary notice of his or her intention to vote in person. Unless previously
revoked or otherwise instructed thereon, proxies will be voted at the Annual
Meeting on the proposals as described above.
The Company will bear the cost of soliciting proxies in the enclosed
form. Officers and regular employees of the Company may solicit proxies by a
further mailing or personal conversations or via telephone or facsimile,
provided that they do not receive compensation for doing so. The Company will,
upon request, reimburse brokerage firms and others for their reasonable expenses
in forwarding solicitation material to the beneficial owners of stock.
STOCK OWNED BY MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The close of business on November 9, 2005 has been fixed by the Board as
the Record Date for determination of shareholders entitled to notice of, and to
vote at, the Annual Meeting The number of shares of voting stock held as of
November 9, 2005 by each holder of more than 5% of the outstanding voting stock
of the Company, each director of the Company, each nominee for reelection as a
director, each executive officer named in the Summary Compensation Table on page
13 of this Proxy Statement and all directors and executive officers of the
Company as a group is set forth below.
SERIES M PREFERRED STOCK
As of November 9, 2005, directors and named executive officers,
individually and as a group, beneficially owned Series M Preferred Stock as
follows:
NAME AND ADDRESS OF BENEFICIAL AMOUNT AND NATURE OF BENEFICIAL PERCENT OF CLASS
OWNER (1) OWNERSHIP ----------------
----- ---------
Bradley I. Meier*(2) 48,890 48.0%
Norman M. Meier* (3) 53,000 52.0%
Officers and directors as a group
(2 persons) (4) 86,890 98.0%
* Director and Nominee
(1) Unless otherwise indicated, the Company believes that each person has
sole voting and investment rights with respect to the shares of Series M
Preferred Stock of the Company specified opposite his name. Unless
otherwise indicated, the mailing address of each shareholder is c/o
Universal Insurance Holdings, Inc., 1110 West Commercial Boulevard, Suite
100, Fort Lauderdale, Florida 33309.
(2) Consists of (i) 33,890 shares of Series M Preferred Stock and (ii) 15,000
shares of Series M Preferred Stock beneficially owned by Belmer Partners,
a Florida General Partnership ("Belmer"), of which Mr. Meier is a general
partner. Excludes all shares of Series M Preferred Stock owned by Norman
M. Meier and Phyllis R. Meier, Mr. Meier's father and mother,
respectively, as to which Mr. Meier disclaims beneficial ownership.
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(3) Consists of (i) 38,000 shares of Series M Preferred Stock and (ii) 15,000
shares of Series M Preferred Stock beneficially owned by Belmer, of which
Mr. Meier is a general partner. Excludes all shares of Series M Preferred
Stock owned by Bradley I. Meier and Phyllis R. Meier, Mr. Meier's son and
former spouse, respectively, as to which Mr. Meier disclaims beneficial
ownership.
(4) See footnotes (1) - (3) above.
SERIES A PREFERRED STOCK
As of November 9, 2005, directors and named executive officers,
individually and as a group, beneficially owned Series A Preferred Stock as
follows:
NAME AND ADDRESS OF BENEFICIAL AMOUNT AND NATURE OF BENEFICIAL PERCENT OF CLASS
OWNER (1) OWNERSHIP ----------------
----- ---------
Norman M. Meier* (2) 9,975 20%
Officers and directors as a group 9,975 20%
(1 person) (3)
* Director and Nominee
(1) Unless otherwise indicated, the Company believes that each person has
sole voting and investment rights with respect to the shares of Series A
Preferred Stock of the Company specified opposite his name. Unless
otherwise indicated, the mailing address of each shareholder is c/o
Universal Insurance Holdings, Inc., 1110 West Commercial Boulevard, Suite
100, Fort Lauderdale, Florida 33309.
(2) Consists of 9,975 shares of Series A Preferred Stock beneficially owned
by Belmer, of which Mr. Meier is a general partner. Excludes all shares
of Series A Preferred Stock owned by Phyllis R. Meier, Mr. Meier's former
spouse, as to which Mr. Meier disclaims beneficial ownership.
(3) See footnotes (1) - (2) above.
COMMON STOCK
As of November 9, 2005, directors and named executive officers,
individually and as a group, beneficially owned Common Stock as follows:
NAME AND ADDRESS OF BENEFICIAL AMOUNT AND NATURE OF BENEFICIAL PERCENT OF CLASS
OWNER (1) OWNERSHIP(2) ----------------
----- ---------
Bradley I. Meier* (3) 21,911,110 60.1%
Sean P. Downes* (4) 3,359,444 9.2%
Norman M. Meier* (5) 2,667,529 7.3%
Reed J. Slogoff* (6) 255,000 .7%
Joel M. Wilentz* (7) 255,000 .7%
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James M. Lynch (8) 225,000 .7%
Officers and directors as a group 28,673,083 78.7%
(6 people) (9)
* Director and Nominee
(1) Unless otherwise indicated, the Company believes that each person has
sole voting and investment rights with respect to the shares of Common
Stock of the Company specified opposite his name. Unless otherwise
indicated, the mailing address of each shareholder is c/o Universal
Insurance Holdings, Inc., 1110 West Commercial Boulevard, Suite 100, Fort
Lauderdale, Florida 33309.
(2) A person is deemed to be the beneficial owner of Common Stock that can be
acquired by such person within 60 days of the date hereof upon the
exercise of warrants or stock options or conversion of Series A Preferred
Stock, Series M Preferred Stock or convertible debt. Except as otherwise
specified, each beneficial owner's percentage ownership is determined by
assuming that warrants, stock options, Series A Preferred Stock, Series M
Preferred Stock and convertible debt that is held by such person (but not
those held by any other person) and that are exercisable or convertible
within 60 days from the date hereof, have been exercised or converted.
(3) Consists of (i) (a) 16,190,170 shares of Common Stock, (b) options to
purchase 1,875 shares of Common Stock at an exercise price of $9.00 per
share, options to purchase 1,875 shares of Common Stock at an exercise
price of $12.50 per share, ten-year options to purchase 90,000 shares at
an exercise price of $2.88 as to 45,000 shares and $3.88 as to the
remaining 45,000 shares granted pursuant to Mr. Meier's employment
agreement, options to purchase 90,000 shares of Common Stock at an
exercise price of $1.13 per share and options to purchase 500,000 shares
of Common Stock at an exercise price of $1.25 per share, (c) warrants to
purchase 15,429 shares of Common Stock at an exercise price of $1.75 per
share, warrants to purchase 339,959 shares of Common Stock at an exercise
price of $3.00 per share, warrants to purchase 82,000 shares of Common
Stock at an exercise price of $1.00 per share and warrants to purchase
131,700 shares of Common Stock at an exercise price of $.75 per share,
(d) 169,450 shares of Common Stock issuable upon conversion of Series M
Preferred Stock, (e) options to purchase 250,000 shares of Common Stock
at an exercise price of $1.06 per share which vested on November 2, 1997,
(f) options to purchase 500,000 shares of Common Stock at an exercise
price of $1.06 per share which vested on May 1, 1997 granted pursuant to
Mr. Meier's employment agreement, options to purchase 500,000 shares of
Common Stock at $1.06 per share which vested on May 1, 1998 granted
pursuant to Mr. Meier's employment agreement and options to purchase
500,000 shares of Common Stock at an exercise price of $1.06 per share
which vested on May 1, 1999 granted pursuant to Mr. Meier's employment
agreement, (g) options to purchase 250,000 shares of Common Stock at an
exercise price of $1.63 per share, (h) options to purchase 150,000 shares
of Common Stock at an exercise price of $1.10 per share which vested on
December 23, 1999, (i) options to purchase 150,000 shares of Common Stock
at an exercise price of $0.60 per share which vested on December 21,
2001, (j) options to purchase 1,000,000 shares of Common Stock at an
exercise price of $0.056 per share
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which vested on March 4, 2004 and (ii) an aggregate of 331,761 shares of
Common Stock (including shares of Common Stock issuable upon exercise of
warrants and conversion of Series A and Series M Preferred Stock)
beneficially owned by Belmer Partners, of which Mr. Meier is a general
partner. Excludes options to purchase 625,000 shares of Common Stock of
Tigerquote.com at an exercise price of $.50 per share. Also excludes all
securities owned by Norman M. Meier and Phyllis R. Meier, Mr. Meier's
father and mother, respectively, as to which Mr. Meier disclaims
beneficial ownership. Includes 416,666 and 250,225 shares of Common Stock
owned by Lynda Meier and Eric Meier, respectively, who are the sister and
brother, respectively, of Bradley I. Meier, which shares are subject to
proxies granting voting rights for such shares to Bradley I. Meier.
(4) Consists of (i) 3,044,444 shares of Common Stock (ii) options to purchase
15,000 shares of Common Stock at an exercise price of $1.10 per share,
(iii) options to purchase 100,000 shares of Common Stock at an exercise
price of $0.50 per share and (iv) options to purchase 200,000 shares of
Common Stock at an exercise price of $0.04 per share.
(5) Consists of (i) (a) 479,246 shares of Common Stock, (b) options to
purchase 3,750 shares of Common Stock at an exercise price of $12.50 per
share, options to purchase 3,750 shares of Common Stock at an exercise
price of $9.00 per share and options to purchase 250,000 shares of Common
Stock at an exercise price of $1.25 per share, (c) warrants to purchase
3,082 shares of Common Stock at an exercise price of $22.00 per share,
warrants to purchase 2,494 shares of Common Stock at an exercise price of
$4.25 per share, warrants to purchase 28,538 shares of Common Stock at an
exercise price of $1.50 per share, warrants to purchase 120,000 shares of
Common Stock at an exercise price of $3.00 per share and warrants to
purchase 129,970 shares of Common Stock at an exercise price of $1.00 per
share, (d) 214,938 shares of Common Stock issuable upon conversion of
Series A and Series M Preferred Stock, (e) options to purchase 500,000
shares of Common Stock at an exercise price of $1.06 per share which
vested on November 2, 1997, (f) options to purchase 500,000 shares of
Common Stock at an exercise price of $1.63 per share, (g) options to
purchase 75,000 shares of Common Stock at an exercise price of $1.10 per
share, (h) options to purchase 25,000 shares of Common Stock at an
exercise price of $0.60 per share and (ii) an aggregate of 331,761 shares
of Common Stock (including shares of Common Stock issuable upon exercise
of warrants and conversion of Series A and Series M Preferred Stock)
beneficially owned by Belmer, of which Mr. Meier is a general partner.
Excludes options to purchase 100,000 shares of Common Stock of
Tigerquote.com at an exercise price of $.50 per share. Excludes all
securities owned by Bradley I. Meier or Phyllis Meier, Mr. Meier's son
and former spouse, respectively, as to which Mr. Meier disclaims
beneficial ownership.
(6) Consists of (i) 25,000 shares of Common Stock, (ii) options to purchase
100,000 shares of Common Stock at an exercise price of $1.06 per share,
(iii) options to purchase 100,000 shares of Common Stock at an exercise
price of $1.63 per share, of which 50,000 are held in a custodial account
for Mr. Slogoff's minor son, (iv) options to purchase 20,000 shares of
Common Stock at an exercise price of $1.10 per share and (v) options to
purchase 10,000 shares of Common Stock at an exercise price of $0.60 per
share. Excludes options to purchase 20,000 shares of Common Stock of
Tigerquote.com at an exercise price of $.50 per share.
- 6 -
(7) Consists of (i) 25,000 shares of Common Stock, (ii) options to purchase
100,000 shares of Common Stock at an exercise price of $1.06 per share,
(iii) options to purchase 100,000 shares of Common Stock at an exercise
price of $1.63 per share, (iv) options to purchase 20,000 shares of
Common Stock at an exercise price of $1.10 per share and (v) options to
purchase 10,000 shares of Common Stock at an exercise price of $0.60 per
share. Excludes options to purchase 20,000 shares of Common Stock of
Tigerquote.com at an exercise price of $.50 per share.
(8) Consists of (i) 50,000 shares of Common Stock, (ii) options to purchase
50,000 shares of Common Stock at an exercise price of $1.87 per share,
(iii) options to purchase 25,000 shares of Common Stock at an exercise
price of $1.10 per share, (iv) options to purchase 15,000 shares of
Common Stock at exercise price of $0.70 per share and (v) options to
purchase 100,000 shares of Common Stock at an exercise price of $0.50 per
share. Excludes options to purchase 20,000 shares of Common Stock of
Tigerquote.com at an exercise price of $.50 per share.
(9) See footnotes (1) - (8) above.
SERIES M PREFERRED STOCK
As of November 9, 2005, the following table sets forth information
regarding the number and percentage of Series M Preferred Stock held by all
persons, other than those persons listed immediately above, who are known by the
Company to beneficially own or exercise voting or dispositive control over 5% or
more of the Company's outstanding Series M Preferred Stock:
AMOUNT AND NATURE OF
NAME AND ADDRESS (1) BENEFICIAL OWNERSHIP PERCENT OF CLASS
---------------- -------------------- ----------------
Phyllis R. Meier (2) 16,800 18.9%
Universal Insurance Holdings, Inc.
1110 West Commercial Boulevard
Suite 100
Fort Lauderdale, Florida 33309
Belmer Partners (3) 15,000 16.9%
c/o Phyllis R. Meier
Managing General Partner
Universal Insurance Holdings, Inc.
1110 West Commercial Boulevard
Suite 100
Fort. Lauderdale, Florida 33309
(1) Unless otherwise indicated, the Company believes that each person has
sole voting and investment rights with respect to the shares of Series M
Preferred Stock specified opposite her or its name.
(2) Consists of (i) 1,800 shares of Series M Preferred Stock and (ii) 15,000
shares of Series M Preferred Stock beneficially owned by Belmer, of which
Ms. Meier is the managing general partner. Excludes all securities owned
by Bradley I. Meier and Norman M. Meier, the son and former spouse,
respectively, as to which Ms. Meier disclaims beneficial ownership.
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(3) Belmer Partners is a Florida general partnership in which Phyllis R.
Meier is managing general partner and Bradley I. Meier and Norman M.
Meier are general partners.
SERIES A PREFERRED STOCK
As of November 9, 2005, the following table sets forth information
regarding the number and percentage of Series A Preferred Stock held by all
persons, other than those persons listed immediately above, who are known by the
Company to beneficially own or exercise voting or dispositive control over 5% or
more of the Company's outstanding Series A Preferred Stock:
AMOUNT AND NATURE OF
NAME AND ADDRESS (1) BENEFICIAL OWNERSHIP PERCENT OF CLASS
---------------- -------------------- ----------------
Phyllis R. Meier (2) 9,975 20.0%
Universal Insurance Holdings, Inc.
1110 West Commercial Boulevard
Suite 100
Fort Lauderdale, Florida 33309
Belmer Partners (3) 30,000 60.0%
c/o Phyllis R. Meier
Managing General Partner
Universal Insurance Holdings, Inc.
1110 West Commercial Boulevard
Suite 100
Fort Lauderdale, Florida 33309
(1) Unless otherwise indicated, the Company believes that each person has
sole voting and investment rights with respect to the shares of Series A
Preferred Stock specified opposite her or its name.
(2) Consists of 9,975 shares of Series A Preferred Stock beneficially owned.
Excludes all shares of Series A Preferred Stock owned by Norman M. Meier,
Ms. Meier's former spouse, as to which Ms. Meier disclaims beneficial
ownership.
(3) Belmer Partners is a Florida general partnership in which Phyllis R.
Meier is managing general partner and Bradley I. Meier and Norman M.
Meier are general partners.
COMMON STOCK
As of November 9, 2005, the following table sets forth information
regarding the number and percentage of Common Stock held by all persons, other
than those persons listed immediately above, who are known by the Company to
beneficially own or exercise voting or dispositive control over 5% or more of
the Company's outstanding Common Stock:
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AMOUNT AND NATURE OF
NAME AND ADDRESS (1) BENEFICIAL OWNERSHIP(2) PERCENT OF CLASS
---------------- -------------------- ----------------
Martin Steinberg, Esq., as the 6,518,004 18.6 %
receiver for Lancer Offshore Inc.(3)
c/o David E. Wells, Esq.
Hunton & Williams LLP
1111 Brickell Avenue, Suite 2500
Miami, Florida 33131
(1) Unless otherwise indicated, the Company believes that each person has
sole voting and investment rights with respect to the shares of Common
Stock of the Company specified opposite its name.
(2) A person is deemed to be the beneficial owner of Common Stock that can be
acquired by such person within 60 days of the date hereof upon the
exercise of warrants or stock options or conversion of Series A and
Series M Preferred Stock or convertible debt. Except as otherwise
specified, each beneficial owner's percentage ownership is determined by
assuming that warrants, stock options, Series A and Series M Preferred
Stock and convertible debt that are held by such a person (but not those
held by any other person) and that are exercisable within 60 days from
the date hereof, have been exercised or converted.
(3) Consists of 6,518,004 shares of Common Stock as indicated on Schedule 13D
dated July 10, 2003 filed with the Securities and Exchange Commission on
March 5, 2004.
- 9 -
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Board has the ultimate authority for the management of the Company's
business, objectives, and operations. It selects the Company's executive
officers, delegates responsibilities for the conduct of the Company's day-to-day
operations to those officers, and monitors the performance of the officers.
Meetings of the Board are held regularly each quarter and as required.
The Board held 4 meetings during 2004. Each director attended 75 percent or more
of the aggregate number of Board meetings during 2004.
The Company encourages its Board members to attend the Company's Annual
Meeting of Shareholders.
Outside directors receive annual compensation of $30,000, paid quarterly,
for serving on the Board and periodically receive stock options and the
reimbursement of reasonable expenses incurred in attending meetings. Officers
are elected annually by the Board and serve at the discretion of the Board. The
Company has entered into indemnification agreements with its executive officers
and directors pursuant to which the Company has agreed to indemnify such
individuals, to the fullest extent permitted by law, for claims made against
them in connection with their positions as officers, directors or agents of the
Company.
The Board has nominated Bradley I. Meier, Norman M. Meier, Sean P.
Downes, Reed J. Slogoff and Joel M. Wilentz for reelection to the Board to serve
as directors until the 2006 annual meeting or until their successors are duly
elected and qualified. The nominees have consented to be named and have
indicated their intent to serve if elected. The Board has no reason to believe
that the nominees will be unavailable or that any other vacancy on the Board
will occur. If any nominee becomes unavailable for any reason, or if any other
vacancy in the class of directors to be elected at the Annual Meeting should
occur before the election, the shares represented by the proxy will be voted for
the person, if any, who is designated by the Board to replace the nominee or to
fill such other vacancy on the Board.
The holders of Series M Preferred Stock, voting separately as a series,
are entitled to elect directors to fill the seats currently held by Bradley I.
Meier and Norman M. Meier, both of whom the Board recommends for reelection;
such directors shall be elected by a majority of votes in the affirmative of the
Series M Preferred Stock shares cast at the Annual Meeting. The holders of
Common Stock, the holders of Series M Preferred Stock and the holders of Series
A Preferred Stock voting together as one class, are entitled to elect directors
to fill the seats currently held by Sean P. Downes, Reed J. Slogoff and Joel M.
Wilentz, all of whom the Board recommends for reelection; such directors shall
be elected by a majority of votes in the affirmative of the Common Stock shares,
Series M Preferred Stock shares and Series A Preferred Stock shares, voting
together as a class, cast at the Annual Meeting. If elected, all nominees are
expected to serve until the 2006 annual meeting or until their successors are
duly elected and qualified.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE NOMINEES DESCRIBED ABOVE BE
ELECTED AS DIRECTORS TO SERVE UNTIL THE 2006 ANNUAL MEETING OR UNTIL THEIR
SUCCESSORS ARE DULY ELECTED AND QUALIFIED.
- 10 -
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
The current directors and executive officers of the Company are as follows:
NAME AGE POSITION FIRST YEAR AS
---- --- -------- DIRECTOR
--------
(Term Expires)
Bradley I. Meier 37 President, Chief Executive 1990
(Director Nominee) Officer and Director (2005)
Norman M. Meier 65 Director and Secretary 1992
(Director Nominee) (2005)
Reed J. Slogoff 36 Director 1997
(Director Nominee) (2005)
Joel M. Wilentz, M.D. 70 Director 1997
(Director Nominee) (2005)
Sean P. Downes 34 Chief Operating Officer, 2005
(Director Nominee) Senior Vice President and (2005)
Director
James M. Lynch 51 Executive Vice President and
Chief Financial Officer
Biographical information regarding the directors and executive officers
of the Company is as follows:
Bradley I. Meier has been President, Chief Executive Officer and a
Director of the Company since its inception in November 1990. He has served as
President of Universal Property and Casualty Insurance Company ("UPCIC"), a
wholly owned subsidiary of the Company, since its formation in April 1997. In
1990, Mr. Meier graduated from the Wharton School of Business with a B.S. in
Economics.
Norman M. Meier has been a Director of the Company since July 1992. From
December 1986 until November 1999, Mr. Meier was President, Chief Executive
Officer and a Director of Columbia Laboratories, Inc., a publicly-traded
corporation in the pharmaceuticals business. From 1971 to 1977, Mr. Meier was
Vice President of Sales and Marketing for Key Pharmaceuticals. From 1977 until
1986, Mr. Meier served as a consultant to Key Pharmaceuticals.
Reed J. Slogoff has been a Director of the Company since March 1997. Mr.
Slogoff is currently a principal with Pearl Properties Commercial Management,
LLC, a commercial real estate investment and management firm based in
Philadelphia, Pennsylvania. Mr. Slogoff was formerly with Entercom
Communications Corp., a publicly traded radio broadcasting company and was
- 11 -
previously a member of the corporate and real estate group of the law firm of
Dilworth, Paxson, LLP. Mr. Slogoff received a B.A. with Honors from the
University of Pennsylvania in 1990, and a J.D. from the University of Miami
School of Law in 1993.
Joel M. Wilentz, M.D. has been a Director of the Company since March
1997. Dr. Wilentz is one of the founding members of Dermatology Associates in
Florida, founded in 1970. He is a member of the boards of the Neurological
Injury Compensation Associate for Florida, the Broward County Florida Medical
Association, and the American Arm of the Israeli Emergency Medical Service for
the southeastern United States, of which he is also President. Dr. Wilentz is a
past member of the Board of Overseers of the Nova Southeastern University School
of Pharmacy.
Sean P. Downes has been Senior Vice President and Chief Operating Officer
of the Company since January 2005. He also has been Chief Operating Officer and
a Director of UPCIC since July 2003. Mr. Downes was Chief Operating Officer of
Universal Adjusting Corporation from July 1999 to July 2003. During that time
Mr. Downes created the Company's claims operation. Before joining the Company in
July 1999, Mr. Downes was Vice President of Dennis Downes and Associates, a
multi-line insurance adjustment corporation.
James M. Lynch has been Executive Vice President and Chief Financial
Officer of the Company since August 1998. Before joining the Company in August
1998, Mr. Lynch was Chief Financial Officer of Florida Administrators, Inc., an
organization specializing in property and casualty insurance. Prior to working
at Florida Administrators, Inc., Mr. Lynch held the position of Senior Vice
President of Finance and Comptroller of Trust Group, Inc., which also
specialized in property and casualty insurance. Before his position at Trust
Group, Mr. Lynch was a Manager with the accounting and auditing firm of Coopers
& Lybrand, which later became PricewaterhouseCoopers LLC.
Norman M. Meier and Bradley I. Meier are father and son, respectively.
There are no other family relationships among the Company's executive officers
and directors.
All directors hold office until the next annual meeting of stockholders
or the election and qualification of their successors. Currently, the Company
does not have a procedure by which shareholders may recommend nominees to the
Company's Board of Directors. Officers are elected annually by the Board of
Directors and serve at the discretion of the Board.
The Company has entered into indemnification agreements with its
executive officers and directors pursuant to which the Company has agreed to
indemnify such individuals, to the fullest extent permitted by law, for claims
made against them in connection with their positions as officers, directors or
agents of the Company.
BOARD OF DIRECTORS AND COMMITTEES
The Company has a separately designated Audit Committee, whose members
are Bradley I. Meier and Reed J. Slogoff. The Company's Board of Directors has
determined that the Company does not have an Audit Committee financial expert
serving on its Audit Committee because the Company has not identified an
individual with the required expertise and experience. Only Reed J. Slogoff is
independent as defined under the National Association of Securities Dealers
standards ("NASD"). The Audit Committee recommends the firm to be appointed as
- 12 -
the independent registered public accounting firm of the Company to audit the
Company's financial statements and to perform services related to the audit,
review the scope and results of the audit with the independent registered public
accounting firm, review with management and the independent registered public
accounting firm the Company's year-end operating results and consider the
adequacy of the internal accounting procedures. The Audit Committee met
separately once during 2004, and the full board, including the members of the
Audit Committee, met several times during the year to discuss the financial
position of the Company, provide recommendations and guidance to management and
evaluate strategies and financial opportunities and initiatives.
The Company has not established a Compensation Committee. Given the size
of the Company and its resources, the Board of Directors believes that this is
appropriate.
The Company has not established a Nominating Committee. Given the size of
the Company and its resources, the Board of Directors believes that this is
appropriate. A director can be nominated by a member of the Board.
The Company has not adopted a code of ethics for senior executive and
financial officers because it has not expended the resources necessary for such
adoption.
The Company has not established a set process for shareholders to send
communications to the Board. Given the size of the Company and its resources,
the Board of Directors believes that this is appropriate.
EXECUTIVE COMPENSATION
The tables and descriptive information set forth below are intended to
comply with the Securities and Exchange Commission compensation disclosure
requirements applicable to, among other reports and filings, annual reports on
Form 10-KSB. This information is furnished with respect to the Company's
executive officers who earned in excess of $100,000 during the fiscal year ended
December 31, 2004.
SUMMARY OF COMPENSATION TABLE
ANNUAL COMPENSATION
-------------------
NAME AND YEAR ENDED RESTRICTED LONG-TERM COMPENSATION
PRINCIPAL POSITION DECEMBER 31 SALARY BONUS STOCK AWARD SECURITIES UNDERLYING OPTIONS
------------------- ----------- ------ ----- ----------- -----------------------------
Bradley I. Meier 2004 $ 419,052 $0 0 1,000,000
President and CEO 2003 381,150 0 0 0
2002 346,500 0 0 0
James M. Lynch 2004 $ 172,375 $15,000 0 0
Executive Vice 2003 155,000 0 0 0
President and CFO 2002 149,250 15,000 0 0
Sean P. Downes 2004 $225,000 $29,933 2,000,000 0
- 13 -
ANNUAL COMPENSATION
-------------------
NAME AND YEAR ENDED RESTRICTED LONG-TERM COMPENSATION
PRINCIPAL POSITION DECEMBER 31 SALARY BONUS STOCK AWARD SECURITIES UNDERLYING OPTIONS
------------------- ----------- ------ ----- ----------- -------------------------------
Senior Vice President 2003 109,167 0 0 0
and Chief Operating Officer 2002 81,250 0 0 200,000
OPTION GRANTS IN LAST FISCAL YEAR
NAME NUMBER OF % OF TOTAL EXERCISE OR EXPIRATION DATE
---- SECURITIES OPTIONS GRANTED BASE PRICE ---------------
UNDERLYING TO EMPLOYEES IN ----------
OPTIONS GRANTED FISCAL YEAR
--------------- -----------
Bradley I. Meier 1,000,000 100% $0.056 2014
AGGREGATED OPTION EXERCISES AND OPTION VALUES FOR THE YEAR ENDED DECEMBER 31, 2004
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED ON VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
NAME EXCHANGE REALIZED OPTIONS AT DECEMBER 31, 2004 AT DECEMBER 31, 2004
---- -------- -------- EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ---------- -------------
Bradley I. Meier - - 1,000,000 - $- $-
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
None.
EMPLOYMENT AGREEMENT
As of August 11, 1999, the Company entered into a four-year employment
agreement with Bradley I. Meier, the Company's President and Chief Executive
Officer, amending and restating the previous employment agreement of May 1, 1997
between the Company and Mr. Meier. Under the terms of the employment agreement,
Mr. Meier will devote substantially all of his time to the Company and will be
paid a base salary of $250,000 per year which shall be increased by 5% each year
beginning with the first anniversary of the effective date. Additionally,
pursuant to the employment agreement, and during each year thereof, Mr. Meier
will be entitled to a bonus equal to 3% of pretax profits up to $5 million and
4% of pretax profits in excess of $5 million. On May 4, 2001, Addendum No. 3 to
the employment agreement was approved by the Board of Directors, whereby Mr.
Meier was entitled to receive an additional fifteen percent (15%) increase in
his base compensation in addition to the cumulative base compensation and
increase calculated at the beginning of 2001, retroactive to January 1, 2001 and
under Addendum No. 3, for each successive year of the term of the employment
agreement, the base compensation as adjusted by previous increase(s) will be
- 14 -
increased by ten (10%) percent. The employment agreement with Mr. Meier contains
non-competition and non-disclosure covenants. In addition, the agreement shall
be extended automatically for one year at each anniversary of the date of the
agreement up to the fourth year of the agreement, at the option of Mr. Meier.
Under the terms of Mr. Meier's employment agreement dated May 1, 1997, he was
granted ten-year stock options to purchase 1,500,000 shares of Common Stock at
$1.06 per share, of which 500,000 options vested immediately, 500,000 options
vested after one year and the remaining options vested after two years. On March
4, 2004, Mr. Meier was granted ten-year stock options to purchase 1,000,000
shares of Common Stock at $0.056 per share, which vested immediately. The
Company issued 2,823,529 and 4,708,332 shares of Common Stock during the
respective years ended December 31, 2004 and 2003 in conjunction with amendments
approved by the Board of Directors to the employment agreement between the
Company and Mr. Meier whereby Mr. Meier converted salary and accrued vacation
into shares of Common Stock. The shares were issued to Mr. Meier in private
transactions performed in accordance with the terms of the amendments and
pursuant to Section 4(2) of the Securities Act of 1933, as amended.
As of January 1, 2005, the Company entered into an employment agreement
with Sean P. Downes, appointing him as Chief Operating Officer and Senior Vice
President of the Company until December 31, 2008 unless the term is extended by
the Company. The agreement provides for an annual base salary of $350,000, which
shall be increased by twenty (20) percent each year beginning with the first
anniversary of the effective date. In addition, Mr. Downes shall receive an
annual bonus of three (3) percent of the pre-tax profits of the Company, and
from time to time the Company may grant Mr. Downes options or warrants to
purchase the Company's Common Stock. Mr. Downes is also eligible for other
benefits customarily provided by the Company to its executive employees. The
employment agreement for Mr. Downes also contains provisions regarding pay and
benefits upon certain termination and Change in Control events (as such term is
defined in the employment agreement) which are normally found in executive
employment agreement, as well as noncompete and nondisclosure provisions. If Mr.
Downes is terminated for "cause" (as such term is defined in the employment
agreement), any accrued but not paid benefits shall no longer be an obligation
of the Company. If a Change of Control occurs, Mr. Downes is entitled to salary
and bonus for one year in a lump sum and all options or warrants granted to Mr.
Downes shall immediately vest and become exercisable.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
All underwriting, rating, policy issuance and administration functions
for UPCIC are performed by UPCIC, Universal Risk Advisors, Inc., a wholly owned
subsidiary of the Company, and unaffiliated third parties. Claims adjusting
functions are performed by Universal Adjusting Corporation, a wholly owned
subsidiary.
Dennis Downes and Associates, a multi-line insurance adjustment
corporation based in Deerfield Beach, Florida performs certain claims adjusting
work for UPCIC. Dennis Downes and Associates is owned by Dennis Downes, who is
the father of Sean P. Downes, COO of UPCIC and the Company. During 2004 and
2003, the Company paid claims adjusting fees of $1,037,151 and $119,471 to
Dennis Downes and Associates.
Since December 1997, as a condition of the licensing of the Company's
subsidiary, the Company's outside counsel held $290,000 in trust for the benefit
of the Company in the counsel's escrow account pending resolution of a claim
- 15 -
against a Company director and an unrelated entity. Such funds were included in
the Company's consolidated financial statements as cash and cash equivalents. In
October 2003, the dispute was resolved and the claim was settled on terms
including a cash payment of $201,000, which the Company paid under an
indemnification arrangement with the director. Legal fees related to the
settlement were $37,036. These amounts were recorded as an expense during 2003.
The remaining funds together with interest earned, net of settlement cost and
attorney fees, were returned to the Company.
AUDIT COMMITTEE REPORT
The following is the report of the Audit Committee with respect to the
Company's audited financial statements for the fiscal year ended December 31,
2004, which include the balance sheet of the Company as of December 31, 2004,
and the related statements of operations, changes in shareholders' equity and
cash flows for the years in the period ended December 31, 2004 and 2003 and the
notes thereto. The information contained in this report shall not be deemed to
be "soliciting material" or to be "filed" with the Securities and Exchange
Commission, nor shall such information be incorporated by reference into any
future filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, except to the extent that the Company
specifically incorporates it by reference in such filing.
REVIEW WITH MANAGEMENT
The Audit Committee has reviewed and discussed the Company's audited
financial statements with management.
REVIEW AND DISCUSSIONS WITH INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has discussed with Blackman Kallick Bartelstein LLP,
the Company's independent registered public accounting firm for 2004, the
matters required to be discussed in accordance with the standards of the Public
Company Accounting Oversite Board which include, among other items, matters
related to the conduct of the audit of the Company's financial statements.
The Audit Committee has received written disclosures and the letter from
Blackman Kallick Bartelstein LLP required by Independence Standards Board
Standard No. 1 (which relates to the accountant's independence from the Company
and its related entities) and has discussed with Blackman Kallick Bartelstein
LLP its independence from the Company.
The Audit Committee has not adopted a charter for the Committee. Given
the size of the Company and its resources, the Board of Directors believes that
this is appropriate. Only Reed J. Slogoff is independent as defined under the
NASD rules.
- 16 -
CONCLUSION
Based on the review and discussions referred to above, the Audit
Committee recommended to the Company's Board that the Company's audited
financial statements be included in the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 2004.
SUBMITTED BY THE AUDIT COMMITTEE OF
THE BOARD OF DIRECTORS
Bradley I. Meier
Reed J. Slogoff
AMENDMENT OF THE CERTIFICATE OF INCORPORATION
(PROPOSAL 2)
The Company is currently authorized to issue 40,000,000 shares of Common
Stock, par value $0.01 per share, of which, as of November 9, 2005, 36,463,219
shares were issued and outstanding. Thus, as of November 9, 2005, there were
approximately 3,536,781 shares of Common Stock that were unissued. In addition,
the Company is obligated to issue shares of Common Stock upon the exercise of
stock options and warrants granted by the Company and upon the conversion of the
Company's outstanding preferred stock.
In these circumstances, the Board of Directors determined that it would
be advisable and in the best interest of the Company to amend the Company's
Certificate of Incorporation, as amended and restated ("Certificate of
Incorporation"), to increase the number of authorized shares of Common Stock in
order to have additional shares available for issuance to meet various business
needs as they may arise and to enhance the Company's flexibility in connection
with possible future actions. Those business needs and actions may include
additional financing, stock dividends, stock splits, employee benefit programs,
corporate business combinations and other corporate purposes. While the Company
currently has no arrangements, understandings or commitments with respect to the
issuance of any additional shares of Common Stock, it is considered advisable to
have sufficient authorized and unissued shares available to enable the Company,
as the need may arise, to move promptly to take advantage of market conditions
and the availability of other favorable opportunities without the delay and
expense involved in calling a special meeting of shareholders. Unless otherwise
required by applicable law or regulation, the additional shares of Common Stock
will be issuable without further authorization by vote or consent of the
shareholders and on such terms and for such consideration as may be determined
by the Board.
Pursuant to that determination, on October 11, 2005, the Board of
Directors unanimously approved and recommended that the Company's shareholders
consider and approve an amendment to Article IV of the Certificate of
Incorporation of the Company to increase the number of authorized shares of
Common Stock of the Company from 40,000,000 shares to 50,000,000 shares.
The authorization of additional shares of Common Stock pursuant to this
proposal will have no dilutive effect upon proportionate voting power of the
present shareholders of the Company. However, to the extent that shares are
- 17 -
subsequently issued in connection with any corporate action to persons other
than the present shareholders, such issuance could have a dilutive effect on the
earnings per share and voting power of present shareholders.
In addition, although the issuance of additional shares of Common Stock
in certain instances may have the effect of forestalling a hostile takeover, the
Board does not intend nor does it view the increase in authorized shares of
Common Stock as an anti-takeover measure. The Company is not aware of any
proposed or contemplated transaction of this type, and the proposed amendment to
the Certificate of Incorporation is not being recommended in response to any
specific effort of which the Company is aware to obtain control of the Company.
At the Annual Meeting, the shareholders will be asked to consider the
proposal recommended by the Board of Directors to amend Article IV of the
Certificate of Incorporation. As proposed to be amended, paragraph (a) of
Article IV would read as follows:
The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is 51,000,000 shares, of
which:
(i) 50,000,000 shares shall be designated as Common Stock,
having a par value of $.01 per share (the "Common Stock"); and
(ii) 1,000,000 shares shall be designated as Preferred Stock,
having a par value of $.01 per share.
If the amendment is approved by the Company's shareholders, it will
become effective upon the filing of a Certificate of Amendment in accordance
with the General Corporation Law of Delaware.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK.
- 18 -
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(PROPOSAL 3)
The Audit Committee recommended and the Board of Directors approved the
appointment of the accounting firm Blackman Kallick Bartelstein LLP as the
Company's independent registered public accounting firm for the fiscal year
2005, subject to shareholder ratification. Blackman Kallick Bartelstein LLP
audited the Company's financial statements for the fiscal years ended December
31, 2002, 2003 and 2004.
AUDIT FEES
Audit fees for the fiscal years ended December 31, 2004 and December 31, 2003
were $132,000 and $115,000, respectively.
AUDIT RELATED FEES
Audit related fees for the fiscal years ended December 31, 2004 and December 31,
2003 were $0.
TAX FEES
Tax fees for the fiscal years ended December 31, 2004 and December 31,
2003 were $31,500 and $25,000, respectively.
ALL OTHER FEES
All other fees for products and services provided by the Company's
principal accountant for the fiscal years ended December 31, 2004 and December
31, 2003 were $0.
POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT
SERVICES OF THE INDEPENDENT AUDITOR
All audit related services were pre-approved by the Audit Committee,
which concluded that the provision of such services by Blackman Kallick
Bartelstein LLP was compatible with the maintenance of that firm's independence
in the conduct of its auditing functions. The Board has appointed Blackman
Kallick Bartelstein LLP to serve as the Company's independent registered public
accounting firm for the fiscal year ending December 31, 2005. Representatives of
Blackman Kallick Bartelstein LLP will be available at the Annual Meeting where
they will have the opportunity to make a statement if they desire to do so and
where they will be available to respond to any appropriate questions.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF BLACKMAN KALLICK BARTELSTEIN LLP AS THE COMPANY'S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2005.
- 19 -
ANNUAL REPORT
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB, WITHOUT EXHIBITS,
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004 ACCOMPANIES THIS PROXY STATEMENT.
UPON WRITTEN REQUEST, THE COMPANY WILL PROVIDE TO ANY SHAREHOLDER, FREE OF
CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM 10-KSB, WITHOUT EXHIBITS, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS FOR COPIES OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB SHOULD BE DIRECTED TO JAMES M. LYNCH,
UNIVERSAL INSURANCE HOLDINGS, INC., 1110 WEST COMMERCIAL BOULEVARD, SUITE 100,
FORT LAUDERDALE, FLORIDA 33309.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers, and persons who own more than 10% of the Company's Common
Stock to file initial reports of ownership and reports of changes in ownership
with the SEC. Directors, executive officers and greater than 10% shareholders
(collectively, "Reporting Persons") are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely on review of the copies of such forms provided to the
Company and written representations by the Reporting Persons, the Company
believes that, for the year ended December 31, 2004, all Section 16(a) filing
requirements applicable to the Reporting Persons were met.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's 2006
annual meeting of Shareholders must be received by the Company no later than
August 9, 2006 to be considered for inclusion in the Company's Proxy Statement
and form of proxy relating to such meeting.
OTHER MATTERS
The Company knows of no business that will be presented for action at the
meeting other than those matters referred to herein. If other matters do come
before the meeting, the persons named as proxies will act and vote according to
their best judgment on behalf of the shareholders they represent.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Norman M. Meier
-------------------
Secretary
Dated: November 14, 2005
- 20 -
Appendix A
REVOCABLE PROXY FOR HOLDERS OF
SERIES M PREFERRED STOCK
UNIVERSAL INSURANCE HOLDINGS, INC.
ANNUAL MEETING OF SHAREHOLDERS ON DECEMBER 7, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James M. Lynch, with full power of
substitution, as the lawful proxy of the undersigned and hereby authorizes him
to represent and to vote as designated below all shares of Series M preferred
stock of Universal Insurance Holdings, Inc. ("Company") that the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Shareholders of the Company to be held on December 7, 2005 at the executive
offices of the Company, 1110 West Commercial Boulevard, Suite 100, Fort
Lauderdale, Florida 33309, and at any adjournment thereof. Holders of Series M
preferred stock are entitled to one vote per share.
1. Proposal 1: Election of five directors for a term ending in 2006. Nominees:
Bradley I. Meier, Norman M. Meier, Sean P. Downes, Reed J. Slogoff and Joel
M. Wilentz.
FOR [ ] WITHHELD [ ]
(all nominees except as marked below)
--------------------------------------------------------------------
(Instruction: To withhold authority to vote for any individual
nominee(s), write the name(s) of the nominee(s) on the line above.)
2. Proposal 2: Approval of an amendment to the Company's Certificate of
Incorporation, as amended and restated, to increase the number of authorized
shares of common stock of the Company from 40,000,000 shares to 50,000,000
shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Proposal 3: Ratification of the appointment of Blackman Kallick Bartelstein
LLP, independent registered public accounting firm, as the auditors of the
Company for the year ending December 31, 2005.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. In the discretion of such proxy, to transact any other business as may
properly come before the annual meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR THE MATTERS LISTED ABOVE.
Whether or not you plan to attend the meeting, you are urged to execute and
return this proxy, which may be revoked at any time prior to its use.
Change of Address or [ ]
Comments Mark Here
Please sign your name exactly as it appears
hereon. When signing as attorney, executor,
administrator, trustee or guardian, please
give full title as such. If a corporation,
please sign in full corporate name by
President or other authorized officer. If a
partnership, please sign in partnership name
by authorized person.
Date: ___________, 2005
---------------------------------------
Signature of Shareholder
--------------------------------------
Signature of Additional Shareholder(s)
Appendix B
REVOCABLE PROXY FOR HOLDERS OF
SERIES A PREFERRED STOCK AND COMMON STOCK
UNIVERSAL INSURANCE HOLDINGS, INC.
ANNUAL MEETING OF SHAREHOLDERS ON DECEMBER 7, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James M. Lynch, with full power of
substitution, as the lawful proxy of the undersigned and hereby authorizes him
to represent and to vote as designated below all shares of Series A preferred
stock and all shares of common stock of Universal Insurance Holdings, Inc.
("Company") that the undersigned would be entitled to vote if personally present
at the Annual Meeting of Shareholders of the Company to be held on December 7,
2005 at the executive offices of the Company, 1110 West Commercial Boulevard,
Suite 100, Fort Lauderdale, Florida 33309, and at any adjournment thereof.
Holders of Series A preferred stock and common stock are entitled to one vote
per share.
1. Proposal 1: Election of three directors for a term ending in 2006. Nominees:
Sean P. Downes, Reed J. Slogoff and Joel M. Wilentz.
FOR [ ] WITHHELD [ ]
(all nominees except as marked below)
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(Instruction: To withhold authority to vote for any individual
nominee(s), write the name(s) of the nominee(s) on the line above.)
2. Proposal 2: Approval of an amendment to the Company's Certificate of
Incorporation, as amended and restated, to increase the number of authorized
shares of common stock of the Company from 40,000,000 shares to 50,000,000
shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Proposal 3: Ratification of the appointment of Blackman Kallick Bartelstein
LLP, independent registered public accounting firm, as the auditors of the
Company for the year ending December 31, 2005.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. In the discretion of such proxy, to transact any other business as may
properly come before the annual meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED FOR THE MATTERS LISTED ABOVE.
Whether or not you plan to attend the meeting, you are urged to execute and
return this proxy, which may be revoked at any time prior to its use.
Change of Address or [ ]
Comments Mark Here
Please sign your name exactly as it appears
hereon. When signing as attorney, executor,
administrator, trustee or guardian, please
give full title as such. If a corporation,
please sign in full corporate name by
President or other authorized officer. If a
partnership, please sign in partnership name
by authorized person.
Date: __________, 2005
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Signature of Shareholder
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Signature of Additional Shareholder(s)