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.