XML 89 R15.htm IDEA: XBRL DOCUMENT v2.4.0.6
Stockholders' Equity
 12 Months Ended
Dec. 31, 2012
Stockholders' Equity [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 8 – STOCKHOLDERS’ EQUITY

Cumulative Convertible Preferred Stock

As of December 31, 2012 and 2011, the Company had shares outstanding of Series A and Series M Cumulative Convertible Preferred Stock (“Preferred Stock”). Each share of Series A and Series M Preferred Stock is convertible by the Company into shares of Common Stock.

 

The following table provides certain information for each series of convertible preferred stock as of the periods presented (in thousands, except conversion factor):

 

                                                 
    As of December 31, 2012     As of December 31, 2011  
    Series A     Series M     Total     Series A     Series M     Total  

Shares issued and outstanding

     20       88       108       20       88       108  

Conversion factor

     2.50       5.00       NM       2.50       5.00       NM  

Common shares resulting if converted

     50       438       488       50       438       488  

NM - Not meaningful.

The Series A Preferred Stock pays a cumulative dividend of $0.25 per share per quarter. During 2012, 2011 and 2010, respectively, the Company declared and paid aggregate dividends of $20 thousand to holders of record of the Company’s Series A Preferred Stock.

During the year ended December 31, 2010, shareholders converted 950 shares of Series M Preferred Stock into shares of Common Stock. The Company erroneously used the wrong conversion factor of 1.25 resulting in an issuance of 1,188 shares during the year ended December 31, 2010. This error was discovered during the year ended December 31, 2011 resulting in an additional issuance of 3,562 shares resulting from the conversion using a factor of 5.00. There were no conversions during the years ended December 31, 2012 and 2011.

During 2012, the Company declared and paid aggregate dividends of $267 thousand to holders of record of the Company’s Series M Preferred Stock.

Common Stock

The following table summarizes the activity relating to shares of the Company’s Common Stock during the periods presented (in thousands):

 

                                 
    Issued
Shares		     Treasury
Shares		     Shares
Held in
Trust		     Outstanding
Shares		  

Balance, as of December 31, 2009

     40,215       (1,809 )      (631 )      37,775  
   

 

 

    

 

 

    

 

 

    

 

 

  

Preferred stock conversion

     1       —         —         1  

Options exercised

     1,995       (1,314 )      631       1,312  

Shares cancelled

     (2,104 )      2,104       —         —    

Restricted stock grant

     300       —         —         300  
   

 

 

    

 

 

    

 

 

    

 

 

  

Balance, as of December 31, 2010

     40,407       (1,019 )      —         39,388  
   

 

 

    

 

 

    

 

 

    

 

 

  

Options exercised

     160       (70 )      —         90  

Shares cancelled

     (70 )      70       —         —    

Restricted stock grant

     600       —         —         600  

Other adjustments

     3       1       —         4  
   

 

 

    

 

 

    

 

 

    

 

 

  

Balance, as of December 31, 2011

     41,100       (1,018 )      —         40,082  
   

 

 

    

 

 

    

 

 

    

 

 

  

Options exercised

     285       (146 )      —         139  

Shares cancelled

     (146 )      146       —         —    

Restricted stock grant

     650       —         —         650  
   

 

 

    

 

 

    

 

 

    

 

 

  

Balance, as of December 31, 2012

     41,889       (1,018 )      —         40,871  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

Dividends Declared

The Company declared dividends on its outstanding shares of common stock to its shareholders of record as follows for the periods presented (in thousands, except per share amounts):

 

                                                 
    For the year ended December 31,  
    2012     2011     2010  
    Per Share
Amount		     Aggregate
Amount		     Per Share
Amount		     Aggregate
Amount		     Per Share
Amount		     Aggregate
Amount		  

First Quarter

   $ 0.10     $ 4,012     $ 0.10     $ 3,939     $ 0.12     $ 4,700  

Second Quarter

   $ 0.08     $ 3,214     $ —       $ —       $ 0.10     $ 3,917  

Third Quarter

   $ 0.08     $ 3,270     $ 0.08     $ 3,199     $ —       $ —    

Fourth Quarter

   $ 0.20     $ 8,174     $ 0.14     $ 5,611     $ 0.10     $ 3,917  

Applicable provisions of the Delaware General Corporation Law may affect the ability of the Company to declare and pay dividends on its Common Stock. In particular, pursuant to the Delaware General Corporation Law, a company may pay dividends out of its surplus, as defined, or out of its net profits, for the fiscal year in which the dividend is declared and/or the preceding year. Surplus is defined in the Delaware General Corporation Law to be the excess of net assets of the company over capital. Capital is defined to be the aggregate par value of shares issued. Moreover, the ability of the Company to pay dividends, if and when declared by its Board of Directors, may be restricted by regulatory limits on the amount of dividends, which the Insurance Entities are permitted to pay the Company.

Restrictions limiting the payment of dividends by UIH

UIH pays dividends to shareholders, which are funded by premiums earned on reinsurance contracts entered into with the Insurance Entities, earnings on investments and distributions from the earnings of its consolidated subsidiaries. Generally there are no restrictions for UIH limiting the payment of dividends. However, UIH’s ability to pay dividends to shareholders may be affected by restrictions on the ability of the Insurance Entities to pay dividends to UIH. See Note 5, INSURANCE OPERATIONS, for a discussion of these restrictions. As of December 31, 2012, 100 percent of the Insurance Entities’ net assets were restricted. There are no such restrictions for UIH’s non-insurance consolidated subsidiaries. Notwithstanding the restriction on the net assets of the Insurance Entities, UIH received distributions from the earnings of its non-insurance consolidated subsidiaries of $40.2 million, $89.3 million and $30.5 million and made capital contributions to the Insurance Entities of $28.6 million, $49.0 million and $30.0 million, during the years ended December 31, 2012, 2011 and 2010, respectively. The Company prepares and files a consolidated federal tax return for UIH and its consolidated subsidiaries with all U.S. GAAP tax related entries recorded on the books of UIH. Since the U.S. GAAP tax related entries are not recorded at the subsidiary level, the Company does not have the ability to produce the amount of net assets for each of its subsidiaries in accordance with U.S. GAAP.