UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 10, 2020
Unico American Corporation
(Exact Name of Registrant as Specified in its Charter)
Nevada
(State or Other Jurisdiction of Incorporation)
| 000-03978 | 95-2583928 |
| (Commission File Number) | (IRS Employer Identification No.) |
| 26050 Mureau Road | |
| Calabasas, California | 91302 |
| (Address of Principal Executive Offices) | (Zip Code) |
(818) 591-9800
(Registrant's Telephone Number, Including Area Code)
(Former name or former address, if changed since last Report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| Common Stock, No Par Value | UNAM | Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company |_|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |_|
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Retirement of President, CEO and Chairman of the Board
On August 10, 2020, Unico American Corporation (the “Company”) announced that, effective August 10, 2020, Cary L. Cheldin will be retiring and, in connection therewith, resigning as President and Chief Executive Officer (“CEO”) of the Company and Chairman and member of the board of directors of the Company (the “Board”). Mr. Cheldin’s departure is not a result of any disagreement with the Company relating to the Company’s operations, policies or practices.
On August 10, 2020, Mr. Cheldin and the Company entered into a Letter Agreement setting forth the details of Mr. Cheldin’s retirement and departure from the Company (the “Letter Agreement”). Pursuant to the Letter Agreement, that certain Employment Agreement, dated as of March 17, 2015, by and between the Company and Mr. Cheldin, as amended (the “Employment Agreement”), was terminated and the Company agreed to provide Mr. Cheldin with a retirement package consisting of the following: (i) an amount in cash equal to all accrued and unpaid salary and other compensation, including accrued, but unused vacation, incurred prior to August 10, 2020, and any unreimbursed business expenses, (ii) an aggregate amount of cash equal to $1,261,783.33, plus (iii) an amount in cash equivalent to reimburse Mr. Cheldin for the cost of purchasing health, disability and life insurance, at the same levels as provided by the Company as of August 10, 2020 for the three year and one month period following August 10, 2020. Pursuant to the Letter Agreement, the Company agreed to the continuation of certain indemnification obligations, as provided in the Employment Agreement.
Pursuant to the terms of the Letter Agreement, Mr. Cheldin agreed to certain open market transfer restrictions during the twenty trading-day period ending on and including March 31, 2021 on all shares of the Company’s common stock, no par value (the “Common Stock”) (or securities convertible or exchangeable for Common Stock) held by him as of such date.
Finally, the Letter Agreement also provides Mr. Cheldin the option, exercisable on or before thirty days after August 10, 2020, to require the Company (or a third party, at the Company’s sole discretion) to purchase all shares of Common Stock held by Mr. Cheldin as of August 10, 2020 at a purchase price of $5.00 per share.
Cheldin Advisory Agreement
In connection with Mr. Cheldin’s retirement, on August 10, 2020, the Company and Mr. Cheldin entered into an Advisory Agreement (the “Advisory Agreement”), pursuant to which, Mr. Cheldin agreed to provide certain transitional services to the Company for a period of twelve months. In consideration for Mr. Cheldin’s advisory services, the Company will pay to him a monthly fee of $10,000, as well as reasonable out-of-pocket expenses incurred by Mr. Cheldin in connection with the provision of services pursuant to the Advisory Agreement.
The foregoing summaries of the Letter Agreement and the Advisory Agreement do not purport to be complete and are qualified in their entirety by reference to the full text thereof, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference.
Appointment of Interim CEO, President and Chairman of the Board
In connection with Mr. Cheldin’s retirement, effective as of August 10, 2020, the Board appointed Mr. Ronald Closser to serve as the Company’s President, interim Chief Executive Officer and Chairman of the Board. Mr. Closser previously served an independent director on the Board and as the Chairman of the Compensation Committee of the Board (the “Compensation Committee”) and as the Chairman of the Nominating & Corporate Governance Committee of the Board (the “N&CG Committee”). In connection with Mr. Closser’s appointment, the Company entered into an Interim Employment Agreement with Mr. Closser on August 10, 2020 (the “Interim Employment Agreement”). The term of the Interim Employment Agreement (the “Term”) will commence as of August 10, 2020, and continue on a month-to-month basis until Mr. Closser’s employment with the Company is terminated by the Board with thirty days’ advanced written notice. Mr. Closser may terminate his employment as President and interim CEO upon providing thirty days’ advance written notice; provided, however, that Mr. Closser has agreed to serve as President and interim CEO for a period of not less than six months, to the extent requested by the Company.
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The Interim Employment Agreement provides that Mr. Closser’s will receive as his sole compensation, a monthly salary of $50,000 (prorated, if applicable) during the Term. Mr. Closser also will be entitled to reimbursement of reasonable, documented, out-of-pocket business expenses and to participate in such employee and executive benefit plans and programs as the Company may offer from time to time to its executives, subject to the terms and conditions of such plans.
Until such time as Mr. Closser resigns as interim CEO and President of the Company, he will not receive compensation for his service as a member of the Board. The information with respect to Mr. Closser’s background as required by Items 401(b), (d), (e) and Item 404(a) of Regulation S-K is set forth in the Company’s Definitive Proxy Statement for its Annual Meeting of Stockholders filed with the Securities and Exchange Commission (the “SEC”) on April 27, 2020 and is hereby incorporated by reference herein.
The foregoing summary of the Interim Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Interim Employment Agreement, a copy of which is attached as Exhibit 10.3 and is incorporated herein by reference.
Board Committee Appointments
On August 10, 2020, in connection with Mr. Closser’s appointment as President and interim CEO, he stepped down as a member of the Compensation Committee and the NC&G Committee. In order to maintain the Company’s compliance with the Nasdaq listing standards related to board committee membership, (i) Mr. Gerard Altonji was appointed to the Compensation Committee and Ms. Rhonda Gillenwaters was appointed to serve as Chairperson of the Compensation Committee, and (ii) Mr. John Keefe was appointed to the N&CG Committee and Mr. Altonji was appointed to serve as Chairman of the N&CG Committee. The Board also determined that Messrs. Altonji and Keefe and Ms. Gillenwaters are independent for purposes of the rules and regulations of the SEC and the the Nasdaq listing standards and that they meet the other requirements for service on the Compensation Committee and N&CG Committee, as applicable.
Item 8.01 Other Events.
On August 10, 2020, the Board authorized and approved a share repurchase program for up to $5 million of the currently outstanding shares of the Common Stock. The share repurchase program is effective immediately and replaces the Company’s existing share repurchase program. The purchases under the share repurchase program may be made from time to time in the open market, through block trades, 10b5-1 trading plans, privately negotiated transactions or otherwise, in each case, in accordance with applicable laws, rules and regulations. The timing and actual number of the shares repurchased will depend on a variety of factors including price, market conditions and corporate and regulatory requirements. The Company intends to fund the share repurchases from cash on hand. The share repurchase program does not commit the Company to repurchase shares of its Common Stock and it may be amended, suspended or discontinued at any time.
On August 11, 2020, the Company issued a press release, announcing the entry into the share repurchase program. A copy of such press release is attached to this Current Report on Form 8-K as Exhibit 99.1.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
UNICO AMERICAN CORPORATION
(Registrant)
Date: August 12, 2020 By: /s/ Michael Budnitsky
Name: Michael Budnitsky
Title: Treasurer, Chief Financial Officer and Secretary
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EXHIBIT 10.1
Unico American Corporation
26050 Mureau Road
Calabasas, California 91302
August 10, 2020
Cary L. Cheldin
26050 Mureau Road
Calabasas, CA 91302
Re: Acceptance of Resignation and Award of Retirement Package
Mr. Cheldin:
The board of directors (the “Board”) of Unico American Corporation, a Nevada corporation (the “Company”) understands that should you determine to resign from your positions as Chairman of the Board, member of the Board and President and Chief Executive Officer of the Company and its affiliates and subsidiaries, including leaving in all capacities of employment, agency or obligation in connection with your retirement, this resignation shall be effective as of August 10, 2020 (the “Effective Date”). The Board will accept your resignation as Chairman of the Board, member of the Board and President and Chief Executive Officer of the Company and its affiliates and subsidiaries, including leaving in all capacities of employment, agent or obligation effective as of the Effective Date.
With appreciation for your service to the Board in your role as Chairman for over a decade, in consideration of, and contingent upon, your resignation and in recognition of the additional decades of service to the Company you have provided in various roles, the Board shall provide you with a retirement package, on the terms set forth in Exhibit A hereto (the “Retirement Package”) and you, in consideration of the payments and benefits provided for under the Retirement Package, will agree that the Employment Agreement, dated as of March 17, 2015, by and between Unico American Corporation and Cary L. Cheldin, as amended (the “Employment Agreement”), except as to those provisions which expressly survive termination or expiration will be terminated and you shall not be entitled to receive any compensation or benefits under the Employment Agreement or otherwise, except as provided in the Retirement Package.
You further agree that during the twenty trading day period ending on and including March 31, 2021, you will not offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of, or publicly disclose the intention to make any offer, sale, pledge or disposition of, any shares of the Company’s common stock or securities convertible into or exercisable or exchangeable for the Company’s common stock in an open market transaction.
Should you have any questions or concerns regarding the Retirement Package, please do not hesitate to contact me at (805) 630-1248. The Board wishes you best of luck in your retirement and in connection with your future endeavors.
[Signature page follows]
Sincerely,
Unico American Corporation
By: /s/ Ron Closser_______________________
Name: Ron Closser
Title: Authorized Signatory on behalf of the Board of Directors
AGREED AND ACCEPTED
By: /s/ Cary L. Cheldin
Name: Cary L. Cheldin
EXHIBIT A
Terms of Retirement Package
In connection with Mr. Cheldin’s resignation as Chairman of the Board, member of the Board and President and Chief Executive Officer of the Company and its affiliates and subsidiaries, the Company hereby agrees to and shall provide Mr. Cheldin a retirement package on the terms set forth herein.
| 1. | The Company shall pay to Mr. Cheldin without offset, setoff or deduction (except for tax deductions as required by law) the following: |
| a. | an amount in cash equal to all accrued and unpaid salary and other compensation, including accrued, but unused vacation, incurred prior to the Effective Date and any unreimbursed business expenses; such amounts to be paid within three (3) business days of the Effective Date; and |
| b. | an amount in cash equal to $54,000; such amount to be paid within five (5) business days of the Effective Date. |
| 2. | In addition, provided that Mr. Cheldin executes a general release in the form attached hereto as Schedule A within thirty (30) days of the Effective Date, and does not in the seven (7) days thereafter revoke such general release, the Company shall pay to and provide to Mr. Cheldin, without offset, setoff or deduction (except for tax deductions as required by law) the following payments and benefits: |
| a. | an amount in cash equal to $993,000; payable within forty-five (45) days of the Effective Date; |
| b. | an amount equal to $27,583.33, payable within forty-five (45) days of the Effective Date; |
| c. | an amount in cash equal to $162,000; payable within forty-five days of the Effective Date; |
| d. | an amount in cash equivalent to reimburse Mr. Cheldin for the cost of purchasing health, disability and life insurance, at the same levels as provided by the Company as of the Effective Date for the three year and one month period following the Effective Date; such reimbursements, including any tax costs to Mr. Cheldin associated with the above reimbursements, shall be made to Mr. Cheldin on a monthly basis; and |
| e. | an amount in cash equal to $25,200 for reimbursement of certain pension benefits owed to Mr. Cheldin; payable within forty-five (45) days of the Effective Date. |
| 3. | The Company agrees that Mr. Cheldin has the option, exercisable on or before thirty (30) days after the Effective Date, to require the Company to purchase all shares of common stock of the Company held by Mr. Cheldin, as of the Effective Date, for a purchase price of $5.00 per share. In the event that Mr. Cheldin exercises such option, the Company shall be obligated to purchase all of Mr. Cheldin’s shares within thirty (30) days of receiving notice of his exercise thereof. The Company has the right to substitute a third party purchaser for the Company’s obligation to purchase all or a portion of Mr. Cheldin’s shares, at the sole discretion of the Company. |
| 4. | Mr. Cheldin shall have the right to remove his personal property from the Company’s premises within sixty (60) days from the Effective Date. |
| 5. | The Company following the Board meeting on August 10, 2020, may issue a press release in the form of Schedule B annexed hereto. No press release relating to the resignation of Cary Cheldin shall be issued by the Company without the prior written approval of Mr. Cheldin. |
| 6. | Mr. Cheldin shall have fifteen (15) days following the Effective Date to submit an expense reimbursement claim for payment, which reimbursement will be paid within three (3) business days of receipt of the claim. |
| 7. | To the fullest extent permitted under the law, the Company shall indemnify Mr. Cheldin, if Mr. Cheldin is made a party, or threatened to be made a party, to any threatened, pending, or contemplated action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that Mr. Cheldin is or was an employee, officer or director of the Company or any affiliate of the Company, in which capacity Mr. Cheldin is or was serving the Company, against any and all liabilities, costs, expenses (including reasonable attorneys’ fees and costs), judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding. In the case of any claim, the Company shall advance reasonable costs of defense (including reasonable attorneys’ fees) provided that Mr. Cheldin agrees to repay such advances if it is finally determined that Mr. Cheldin was not entitled to indemnification with respect to such claim. This Section 7 shall not limit in any way Mr. Cheldin’s rights under any agreement relating specifically to indemnification or under applicable law. |
EXHIBIT 10.2
ADVISORY AGREEMENT
This Advisory Agreement (the “Agreement”) is made and entered into as of August 10, 2020 (the “Effective Date”), by and between Unico American Corporation, a Nevada corporation (the “Company”), and Cary L. Cheldin (“Advisor”).
RECITALS
Whereas, the Company desires to engage Advisor, and Advisor desires to accept the engagement by the Company, as an Advisor to the Company on the terms and conditions set forth in this Agreement.
Now, Therefore, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the sufficiency of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. Advisory Services. As a result of Advisor’s role as a former Chief Executive Officer and member of the Board of Directors of the Company (the “Board”), Advisor has institutional and industry knowledge that may be valuable to the Company. Advisor has agreed to work with the Board of Directors of the Company, or such individual(s) as designated by the Board of Directors, to assist the Company in identifying a qualified chief executive officer and in transitioning the Company to a new management team and such other services as are reasonably requested by the Company and agreeable to Advisor (collectively, the “Services”). The manner and means by which Advisor chooses to perform the Services shall be in Advisor’s sole discretion and control; provided, however, that Advisor shall perform all Services in a timely and professional manner, using a degree of skill and care at least consistent with industry standards. If it is necessary for Advisor to be on the premises of the Company, Advisor agrees to comply with the Company’s then-current access rules and procedures, including, without limitation, those procedures pertaining to safety, security and confidentiality.
2. Term; Compensation. The Term of this Agreement shall be for 12 months after the Effective Date. As full and complete consideration for Advisor’s performance of the Services, the Company shall pay to Advisor a cash fee in the amount of $10,000 per month, with the first such payment being made within three (3) business days of the Effective Date. All other payments shall be made on the tenth day of each month thereafter (provided that if such tenth day is a weekend or holiday, then such payment shall be made on the first business day after the tenth day of the month). The total amounts owed to Advisor under this Agreement for the full term shall be $120,000. Advisor shall be obligated to incur no more than 10 hours of time each month in providing the Services. None of the Services shall require Advisor to travel, other than to the headquarters of the Company in Calabasas, CA, when necessary.
3. Expenses. The Company shall reimburse Advisor for any reasonable out-of-pocket expenses, including, without limitation, reasonable travel expenses, to the extent Advisor agrees to any travel, incurred in connection with Advisor’s performance of the Services; provided, however, that Advisor must: (i) obtain the prior written approval of the Company for any such expenses that, individually or in the aggregate, exceed $100; and (ii) submit such written documentation of all such expenses as the Company may reasonably require. The Company will reimburse Advisor for expenses covered by this Section 3 within thirty (30) days of the Company’s receipt of proper written documentation of such expenses.
4. Independent Contractor Relationship. Advisor’s relationship with the Company shall be solely that of an independent contractor, and nothing in this Agreement shall be construed to create a partnership, joint venture or employer-employee relationship. Advisor is not the agent of the Company and is not authorized to make any representation, warranty, agreement, contract or commitment on behalf of the Company. Advisor shall not be entitled to any of the benefits that the Company may, from time to time, make available to its employees, such as group insurance, profit-sharing or retirement benefits. Advisor shall be solely responsible for all tax returns and payments required to be filed with or made to any federal, state or local tax authority with respect to Advisor’s performance of the Services and receipt of the Advisory Fees pursuant to this Agreement. The Company will regularly report amounts paid to Advisor by filing Form 1099-MISC with the Internal Revenue Service as required by law, but given that Advisor is an independent contractor, the Company will not withhold or make payments for social security, make unemployment insurance or disability insurance contributions or obtain worker’s compensation insurance on Advisor’s behalf. Advisor agrees to accept exclusive liability for complying with all applicable federal, state and local laws governing his status as a self-employed individual, including, without limitation, obligations such as the payment of taxes, social security, disability and other contributions based on the Advisory Fees paid to Advisor. Advisor hereby agrees to indemnify, hold harmless and defend the Company from and against any and all such taxes and contributions, as well as any penalties and interest arising therefrom.
5. No Conflicting Obligation. Advisor represents that Advisor’s entering into this Agreement, performance of all of the terms of this Agreement and performance of the Services pursuant to this Agreement do not and will not breach or conflict with any agreement or other arrangement between Advisor and any third party, including, without limitation, an agreement or other arrangement between Advisor and any third party to keep in confidence any proprietary information of another entity acquired by Advisor in confidence or in trust prior to the date of this Agreement. Advisor agrees not to enter into any agreement that conflicts with this Agreement while this Agreement remains in effect.
6. Miscellaneous.
6.1 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not, then on the next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company or to Advisor, as applicable, at the respective addresses set forth on the signature page to this Agreement or at such other address(es) as the Company or Advisor may designate by ten (10) days advance written notice to the other party hereto.
6.2 Governing Law. This Agreement shall be construed in accordance with, and governed in all respects by, the laws of the State of California, as applied to contracts to be performed entirely within such state.
6.3 Successors and Assigns. The rights and liabilities of the parties hereto shall bind and inure to the benefit of their respective successors, heirs, executors and administrators, as the case may be; provided, however, that, as the Company has specifically contracted for Advisor’s services, which services are unique and personal, Advisor may not assign or delegate Advisor’s obligations under this Agreement either in whole or in part to any party without the prior written consent of the Company. The Company may assign its rights and obligations hereunder to any person or entity which succeeds to all or substantially all of the Company’s business.
6.4 Waiver. No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. No party shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party, and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.
6.5 Amendments. This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of all of the parties hereto.
6.6 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement in writing for such provision, then: (i) such provision shall be excluded from this Agreement; (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded; and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.
6.7 Entire Agreement. This Agreement sets forth the entire understanding of the parties hereto relating to the subject matter hereof and thereof and supersedes all prior agreements and understandings among or between any of the parties relating to the subject matter hereof and thereof.
6.8 Counterparts; Execution by Facsimile. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. The exchange of copies of this Agreement or amendments thereto and of signature pages by facsimile transmission or by e-mail transmission in portable digital format, or similar format, shall constitute effective execution and delivery of such instrument(s) by the parties and may be used in lieu of the original Agreement for all purposes.
6.9 Attorneys’ Fees. The prevailing party in any litigation relating to this Agreement shall be entitled to recover his or its reasonable attorneys’ fees, costs and expenses.
In Witness Whereof, the parties hereto have executed this Advisory Agreement as of the Effective Date.
THE COMPANY:
Unico American Corporation
By: /s/ Ronald A. Closser
Name: Ronald A. Closser
Title: Interim President and Chief Executive Officer
Address: _______
ADVISOR:
Cary L. Cheldin
By: /s/ Cary L. Cheldin
Address: _______
EXHIBIT 10.3
UNICO AMERICAN CORPORATION
INTERIM EMPLOYMENT AGREEMENT
This Interim Employment Agreement (the “Agreement”) is entered into this 10th day of August, 2020 (the “Effective Date”), by and between Unico American Corporation, a Nevada corporation (the “Company”) and Ronald Closser (“Executive” and, together with the Company, the “Parties”).
WHEREAS, the Company desires to retain the services of Executive by engaging Executive to serve as the Company’s interim Chief Executive Officer and President under the terms hereof; and
WHEREAS, Executive desires to provide services to the Company on the terms hereof.
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:
1. Employment.
(a) General. The Company shall employ Executive upon the terms and conditions provided herein effective as of the Effective Date.
(b) Position and Duties. Effective on the Effective Date, Executive shall serve as the Company’s Interim Chief Executive Officer and President (the “ICEO”), with responsibilities, duties, and authority usual and customary for a Chief Executive Officer and President. During Executive’s employment with the Company, Executive shall report directly to the Board of Directors of the Company (the “Board”) and agrees promptly and faithfully to comply with all present and future policies, requirements, rules and regulations, and reasonable directions and requests, of the Company in connection with the Company’s business. Executive will at all times perform all of the duties and obligations required by Executive under this Agreement in a loyal and conscientious manner and to the best of Executive’s ability and experience.
(c) Performance of Executive’s Duties. During the Term of Employment (as defined below) except for periods of illness, Disability, or excused leaves of absence, Executive shall devote Executive’s full time and attention to the business and affairs of the Company pursuant to the direction of the Board; provided that nothing herein shall preclude Executive from, subject to prior written consent of the Board: (i) engaging in additional activities in connection with personal investments and community affairs including service on non-profit boards of directors; (ii) serving as a member of the board of directors for for-profit organizations that are not competitors of the Company; and (iii) serving as an advisor, or as a member of an advisory board of organizations that are not competitors of the Company; provided such activities do not individually or in the aggregate interfere with the performance of Executive’s duties under this Agreement, violate the Company’s standards of conduct then in effect or raise a conflict under the Company’s conflict of interest policies.
(d) Board Membership. Executive is currently a member of the Board and shall continue to serve in that capacity during the term of this Agreement, unless Executive is otherwise removed by the stockholders of the Company in accordance with applicable law and the Company’s charter and bylaws or Executive resigns from membership on the Board.
2. Term. It is understood by Executive that the Company has or will as soon as reasonably practicable engage in an executive search process to identify an individual who will serve as the Company’s Chief Executive Officer and will replace Executive. Accordingly, the period of Executive’s employment under this Agreement shall commence on the Effective Date and shall continue on a month-to-month basis until Executive’s employment with the Company is terminated by the Board with 30 days advance written notice, which shall be at the Board’s sole discretion at any time and whether or not a Chief Executive Officer is identified. Notwithstanding the foregoing, Executive has committed to serve as the Company’s ICEO for a period of not less than six (6) months after the Effective Date if so requested by the Company. Any termination of employment by Executive shall require Executive to provide the Company with 30 days advance written notice. The phrase “Term of Employment” as used in this Agreement shall refer to the entire period of employment of Executive by the Company as an employee, but does not refer to any additional period of time Executive serves as a member of the Board.
3. Transitional Consulting Agreement. In the event the Company identifies a Chief Executive Officer for the Company and Executive’s employment hereunder is terminated, Executive agrees, at the request of the Company, to enter into a mutually acceptable consulting arrangement for a to-be-agreed-upon period of time to facilitate the transition of Executive’s role to the new Chief Executive Officer of the Company.
4. Compensation and Related Matters. During the Term of Employment, Executive shall be entitled to the following:
(a) Monthly Salary. Executive shall receive a monthly salary of $50,000.00 (the “Monthly Salary”) (with such amount being prorated for any portion of a month during the Term of Employment), subject to withholdings and deductions, which shall be paid to Executive in accordance with the customary payroll practices and procedures of the Company.
(b) Benefits. Executive shall be entitled to participate in such employee and executive benefit plans and programs as the Company may offer from time to time to provide to its executives, subject to the terms and conditions of such plans. Notwithstanding the foregoing, nothing herein shall require the Company to institute or continue any particular, plan, or benefits.
(c) Business Expenses. The Company shall reimburse Executive for all reasonable, documented, out-of-pocket travel and other business expenses incurred by Executive in the performance of Executive’s duties to the Company in accordance with the Company’s applicable expense reimbursement policies and procedures as are in effect from time to time.
(d) Vacation. As the employment of Executive under this Agreement is for a short term basis, Executive will not be entitled to paid vacation during the Term of Employment.
(e) Equity Awards. Executive shall not be entitled to nor shall be granted any equity awards in connection with Executive’s employment hereunder. The Monthly Salary shall be Executive’s sole compensation under the terms of this Agreement.
5. Termination.
(a) At-Will Employment. The Company and Executive acknowledge that Executive’s employment shall be at-will, as defined under applicable law. This means that it is not for any specified period of time and can be terminated by Executive or by the Company at any time, with advance written notice as set forth above, and for any or no particular reason or cause. This “at-will” nature of Executive’s employment shall remain unchanged during Executive’s tenure as an employee and may not be changed, except in an express writing signed by Executive and the Board. If Executive’s employment terminates for any lawful reason, Executive shall not be entitled to any payments, benefits, equity awards or other compensation other than any compensation that may have been earned as expressly set forth herein prior to the date of any such termination.
6. Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local, or foreign withholding or other taxes or charges or amounts which the Company is required or entitled to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.
7. Miscellaneous Provisions.
(a) Assignment and Successors. The Company may assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise). This Agreement shall be binding upon and inure to the benefit of the Company, Executive, and their respective successors, assigns, personnel, and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executive’s rights or obligations may be assigned or transferred by Executive, other than Executive’s rights to payments hereunder, which may be transferred only by will, operation of law, or as otherwise provided herein.
(b) Governing Law. This Agreement shall be governed, construed, interpreted, and enforced in accordance with its express terms, and otherwise in accordance with the substantive laws of the State of California, without giving effect to any principles of conflicts of law, whether of the State of California or any other jurisdiction, and where applicable, the laws of the United States, that would result in the application of the laws of any other jurisdiction.
(c) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
(d) Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing signed by Executive and a duly authorized representative of the Company. By an instrument in writing similarly executed, Executive or a duly authorized officer of the Company, as applicable, may waive compliance by the other Party with any specifically identified provision of this Agreement that such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.
(e) Enforcement. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.
(f) Entire Agreement. The terms of this Agreement are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral, regarding Executive’s employment with the Company. The Parties further intend that this Agreement shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.
(g) Employee Acknowledgement. Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executive’s own judgment.
(h) Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. Signatures delivered by facsimile shall be deemed effective for all purposes.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date and year first above written.
UNICO AMERICAN CORPORATION
By: /s/ Gerard J. Altonji
Name: Gerard J. Altonji
Title: Independent Director
EXECUTIVE
By: /s/ Ronald Closser
Name: Ronald Closser
Address:
__________
__________
EXHIBIT 99.1
NEWS RELEASE
CONTACT: Michael Budnitsky
Chief Financial Officer
818-591-9800
UNICO AMERICAN CORPORATION ANNOUNCES
$5 MILLION SHARE REPURCHASE PROGRAM
CALABASAS, CA, August 11, 2020 – Unico American Corporation (NASDAQ:UNAM) ("Unico," or the "Company"), announced today that, its Board of Directors authorized a share repurchase program for up to $5 million of its outstanding common stock.
The share repurchase program is effective immediately and replaces the Company’s existing share repurchase program. The purchases under the share repurchase program may be made from time to time in the open market, through block trades, 10b5-1 trading plans, privately negotiated transactions or otherwise and in accordance with applicable laws, rules and regulations. The timing and actual number of the shares repurchased will depend on a variety of factors including price, market conditions and corporate and regulatory requirements. The company intends to fund the share repurchases from cash on hand. The share repurchase program does not commit the company to repurchase shares of its common stock and it may be amended, suspended or discontinued at any time.
About Unico:
Headquartered in Calabasas, California, Unico is an insurance holding company whose subsidiaries underwrite and market property and casualty insurance, and transact health insurance, insurance premium financing and membership association services. Unico is publicly owned and traded on the Nasdaq Global Market under the symbol UNAM.
Notice Regarding Forward-Looking Statements. Certain statements in this press release are forward looking statements as defined under the Private Securities Litigation Reform Act of 1995 and the Company intends that such forward-looking statements are subject to safe harbors created thereby. These statements, which may be identified by words or phrases such as “anticipate,” “appear,” “believe,” “estimate,” ‘expect,” ‘intend,” “plan,” “predict,” “will,” “may,” “likely,” “future,” “should,” “could,” and “would” and similar words, are intended to identify forward-looking statements. In addition, any statements that refer to projections of the Company’s future financial performance, trends in its business, or other characterizations of future events or circumstances are forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, risks related to changes in price and volume and the volatility of the Company’s common stock; adverse developments affecting either or both of prices and trading of exchange-traded securities, including securities listed on the NASDAQ Stock Exchange; and unexpected or otherwise unplanned or alternative requirements with respect to capital investments of the Company. Additional risks and uncertainties faced by the Company are contained from time to time in the Company’s filings with the U.S. Securities and Exchange Commission (SEC), including, but not limited to, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and its quarterly reports on Form 10-Q and current reports on Form 8-K, which you may obtain for free on the SEC’s website at www.sec.gov. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company disclaims any intention or obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.